Seoul Gazette - Oil extends gains after latest US strikes, tech suffers more losses

Tech firms were once again in the crosshairs, with South Korea's Kospi extending a painful selloff as chip titan SK hynix continued to be routed amid growing fears about the AI boom.

The latest attacks came after Iranian forces struck a commercial ship in the Strait of Hormuz -- through which a fifth of global oil passes -- early Sunday, before announcing the closure of the waterway.

That led to a series of US strikes on sites in the Islamic republic, which replied by hitting targets in Bahrain, Jordan, Kuwait and Oman.

Before the latest US attacks, President Donald Trump told conservative radio host Hugh Hewitt on Monday that "we're going to hit them very hard tonight, and we're going to hit them hard tomorrow".

He later declared on Truth Social that the United States would be "known as 'THE GUARDIAN OF THE HORMUZ STRAIT'" and levy a 20 percent fee on all cargo shipped through the waterway.

While Iran's ports would again be blockaded, Trump said "all other countries will have fair and open use of the strait".

However, he also said a deal with Tehran to end the crisis was still possible.

"Yeah, I think a deal is possible. Sure, I do," he told reporters in the Oval Office. "We had a deal with them two days ago and then they said 'Oh we can't make that deal. We have to negotiate it further.'"

Oil prices shot up more than nine percent Monday over fears of renewed conflict and the possibility that a fresh surge in inflation could force the Federal Reserve and other central banks to hike interest rates soon.

And they continued to rise Tuesday, piling on more than one percent.

"With Trump, one never quite knows how seriously to take such pronouncements, but Gulf allies would not be pleased with this plan, and it almost certainly violates international law," said BNZ's Jason Wong.

"The 20 percent levy would add about $16 to the cost of every barrel of oil passing through the strait on a typical supertanker.

"It remains to be seen whether the plan will stick -- probably not -- and whether it is merely a negotiating tactic aimed at getting Iran to pause its military strikes on shipping in the area."

The renewed hostilities once again dragged on equities, compounding the flight from tech firms that has characterised markets in recent weeks as traders worry that the sector's AI-led rally has gone too far.

Seoul again suffered heavy selling, with SK hynix shedding more than three percent, the day after a 15 percent collapse. Its New York-listed shares -- which soared more than 13 percent on their debut Friday -- plunged more than nine percent Monday.

Tokyo, Hong Kong, Sydney, Singapore, Taipei, Wellington, Manila and Jakarta were also sharply down.

The losses came at the start of a big week for traders, with earnings season about to kick off, Fed boss Kevin Warsh due to testify in Congress and US inflation data set to be released.

Meanwhile, Fed governor Christopher Waller stoked concerns over an early interest rate hike as inflation continues to remain elevated.

"If we get another hot reading on core inflation this week, then the (rate-setting committee) will need to consider tightening monetary policy in the near term," he said Monday.

- Key figures around 0230 GMT -

West Texas Intermediate: UP 1.3 percent at $79.15 a barrel

Brent North Sea Crude: UP 0.7 percent at $83.91 a barrel

Tokyo - Nikkei 225: DOWN 0.8 percent at 66,678.36 (break)

Seoul - Kospi: DOWN 2.6 percent at 6,631.83

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 24,166.38

Shanghai - Composite: FLAT percent at 3,912.31

Euro/dollar: UP at $1.1394 from $1.1384 on Monday

Pound/dollar: UP at $1.3358 from $1.3353

Dollar/yen: DOWN at 162.35 yen from 162.43 yen

Euro/pound: UP at 85.30 pence from 85.25 pence

New York - Dow: DOWN 0.3 percent at 52,498.64 (close)

London - FTSE 100: FLAT at 10,498.29 (close)

X.Eom--SG