Asian markets tumbled Monday, July 13, led by a plunge in South Korean shares, after U.S. Central Command carried out a fresh wave of strikes on Iran over the weekend and Tehran’s Revolutionary Guard again declared the Strait of Hormuz closed, according to closing levels from the region’s exchanges. The escalation drove oil sharply higher, revived inflation fears days before a key U.S. inflation report, and sent investors out of the chip stocks that had powered the region’s rally.

South Korea took the hardest hit. The Kospi sank about 5.6 percent to 7,060.69, its lowest level since May 4, after falling as much as 7 percent intraday. The rout centered on memory-chip makers: SK Hynix dropped 10.6 percent in Seoul, unwinding part of the euphoria from its Nasdaq debut Friday, when its American depositary shares jumped 13 percent after the company raised roughly $26.5 billion at $149 each. Larger rival Samsung Electronics fell 6.7 percent, as profit-taking deepened worries about how durable the artificial-intelligence memory boom really is. Bucking the slide, LG Electronics rose more than 5 percent on a Seoul Economic Daily report that it will build AI server racks for Nvidia.

Japan followed the risk-off tone. The Nikkei 225 lost 1.1 percent to 67,786.86 as rising energy costs clouded the outlook just as earnings season opened, while the broader Topix slipped 0.52 percent. Australia’s S&P/ASX 200 eased 0.3 percent to 8,777.00.

Greater China split from the region. Mainland shares fell, with the Shanghai Composite down about 1.2 percent to 3,947.34 and the CSI 300 off 0.64 percent, dragged by consumer and tech names including BYD, which lost 3.2 percent. Energy producers went the other way as crude climbed: PetroChina rose 0.9 percent and CNOOC gained 2.2 percent, after Beijing reportedly urged major refiners to keep fuel output high to protect energy security against any disruption to Persian Gulf shipments. Hong Kong’s Hang Seng Index was the region’s outlier, edging higher to around 24,202, extending a recent run of outperformance by Chinese equities.

The driver was the weekend’s sharp military escalation. U.S. Central Command struck dozens of Iranian targets across several waves after an Iranian attack on a container ship in the strait, and Tehran retaliated against U.S. facilities in multiple Gulf states, hitting Qatar and the United Arab Emirates for the first time in months and firing ballistic missiles at Jordan. President Donald Trump disputed Iran’s closure claim on Sunday, saying the waterway remained open to commercial traffic even as roughly 20 vessels were reported to have transited under U.S. coordination.

Oil surged on the uncertainty. Brent crude gained 3.9 percent to $78.96 a barrel and U.S. West Texas Intermediate added 4 percent to $74.26, unwinding the drop that had followed last month’s interim truce. Gold slid more than 1 percent and the dollar firmed as traders priced in a firmer rate path, the same mechanism pressuring metals all year: higher oil feeds inflation, which lifts real yields and pushes the Federal Reserve toward keeping policy tight.

Strategists framed the selloff as risk-off but contained. Ben Emons, founder of Fed Watch Advisors, wrote that the strait closure would hang over the market with a cautious tone, but said the week’s focus would also turn to inflation data, Fed testimony and bank earnings. Goldman Sachs economists expect U.S. core consumer prices to ease to 2.8 percent year-over-year in June, while Standard Chartered reiterated that gold remains its preferred hedge against geopolitical risk, noting U.S. real yields near their highest since 2008 and forecasting the Fed to hold rates through 2026.

The week ahead sets up as pivotal. U.S. June CPI lands Tuesday at 8:30 a.m. Eastern, the last major inflation read before the July 29 Fed decision, followed 90 minutes later by Chair Kevin Warsh’s first congressional testimony since taking office. Earnings season also opens in force, with JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and Wells Fargo among 28 S&P 500 companies reporting. U.S. futures pointed lower as Asia closed, with Dow Jones Industrial Average futures down 229 points, or 0.43 percent, S&P 500 futures off 0.58 percent and Nasdaq-100 futures down 1.37 percent.

For Asian investors, the message from Monday’s tape was that the market’s assumption the Gulf skirmishes would stay contained is being tested, and that the chip trade underpinning the region’s gains is the first thing sold when that assumption wobbles.

JBizNews Desk | Hong Kong © JBizNews.com All Rights Reserved. Reproduction or distribution without written permission is prohibited.