Asian Markets Plummet Following Iran's Attack on Israel, Kospi Drops 8%

Asia-Pacific stock markets opened weaker in trading on Monday after rising geopolitical tensions in the Middle East triggered global investor sell-offs. Market sentiment deteriorated following reports that Iran launched missiles towards Israel, heightening concerns regarding regional stability and prompting a risk-off move across financial markets.

The South Korean market led the regional decline, with the Kospi index falling by 8.4%. Meanwhile, Japan’s Nikkei 225 index also slumped by 3.4% in early trading, as investors reduced exposure to risky assets amidst increasing geopolitical uncertainty.

Negative sentiment from Wall Street also weighed on Asian market movements. US stock futures moved lower on Sunday night, with Dow Jones futures declining by approximately 80 points or 0.2%, while S&P 500 and Nasdaq 100 futures also fell by 0.2% each.

Previously, US stock markets experienced sharp pressure at the end of last week. The Nasdaq Composite plunged 4.18%, marking its largest daily decline since April 2025, while the S&P 500 dropped 2.64% and the Dow Jones lost nearly 700 points.

Investor anxiety has been heightened after stronger-than-expected US employment data triggered a surge in bond yields, raising fears that high interest rates may persist for longer. In addition to the Middle East conflict, Asian investors are also awaiting US inflation data this week, including the release of the Consumer Price Index (CPI) and Producer Price Index (PPI), which are expected to show persistent inflationary pressures and could influence future interest rate policies.