KOSPI plunged 5.6% after surging a record 18% on Friday, as investors resumed selling the market’s heavyweight artificial intelligence stocks

Asian stocks extended losses on Monday, with KOSPI tumbling more than 5% as another wave of selling in artificial intelligence-linked technology shares overshadowed easing Middle East tensions and lower oil prices.

KOSPI plunged 5.6% after surging a record 18% on Friday, as investors resumed selling the market’s heavyweight artificial intelligence stocks.

The benchmark had already suffered a 22% plunge in July – its steepest monthly decline since the 2008 financial crisis – as concerns over AI valuations triggered a broad correction.

Samsung Electronics dropped 7.2% despite reporting a more than 250-fold jump in semiconductor profit last week and announcing multi-year supply agreements with major data-centre operators.  SK Hynix also declined 7% after investors continued reassessing its record quarterly earnings, which failed to match higher market expectations.

The two chipmakers together account for more than half of the KOSPI’s market capitalization.

Japan also traded lower after the Bank of Japan last week reinforced expectations for gradual policy normalization while keeping rates unchanged. The Nikkei 225 shed 1%, while the broader TOPIX slipped 1.2%.

Sony Group declined almost 6% and Murata Manufacturing and Renesas Electronics also dropped, offsetting gains of around 7% in Kioxia Holdings and more than 4% in TDK Corp.

Chinese markets were comparatively resilient despite weakness in technology shares. The Shanghai Shenzhen CSI 300 slid 0.6%, while the Shanghai Composite slipped 0.5%. STI index shed 0.5%.

Hang Seng edged 0.1% higher as Alibaba surged more than 5% after unveiling a new flagship AI model, while Tencent add more than 2%.

Among the biggest movers, Australia’s Woodside Energy dropped nearly 3%, Santos shed more than 2%, while Japan’s INPEX Corp dropped nearly 2%, tracking weaker oil prices.

S&P/ASX 200 outperformed the region, rising around 0.5% as gains in financials and industrials offset weakness in energy stocks.

Separately, Cotality data showed Australian home prices declined for a second straight month in July as higher borrowing costs and uncertainty surrounding proposed tax changes accelerated the housing downturn.

Attention now turns to the Reserve Bank of India later this week, with Nifty 50 rising almost 1%.

DBS economists expect the RBI to leave interest rates unchanged while maintaining a balanced stance, arguing that easing food inflation gives policymakers room to wait.

Markets will also monitor China’s July trade data and South Korea’s inflation report.