Tech stocks plunge in Asia after record rally and renewed Middle East attacks

South Korea's stock market was forced to halt trading for 20 minutes after the Kospi index plunged by nearly 9% within minutes of Monday's opening.

The halt is part of a circuit breaker mechanism designed to prevent panic trading and was triggered for the third time this year after a sharp sell-off in technology stocks.

Japan's Nikkei 225 index slid by around 4.5% - the most in three months - as shares of major tech companies fell.

Oil prices also rose on Monday, fuelling concerns of inflation, after Iran and Israel exchanged strikes for the first time since a ceasefire was agreed between the sides and the US in April.

Traders are nervously watching a "messy mix" of several shocks to the market mainly tied to the tech sector and accelerated by rising energy prices, said chief investment strategist Charu Chanana from Saxo.

Tech stocks have seen a strong run in recent weeks, but investors are "repositioning" over fears the investments into artificial intelligence may be overvalued, she said.

Markets like the Kospi and Nikkei are particularly exposed to such shocks given their exchanges are dominated by tech stocks.

The losses follow a sharp drop on Wall Street on Friday, where a sell-off in tech stocks saw shares on the Nasdaq lose about 4% - its biggest drop in more than a year.

Part of the decline on Friday followed fears of a hike in US interest rates, due to a lower-than-expected US unemployment rate in April as well as persistently high inflation linked to the war in the Middle East.

Trading in South Korea has resumed since the circuit breaker was triggered, with the Kospi index down by about 7.9% in the early afternoon.

The share prices of major South Korean tech companies were sharply lower, including those of chipmakers Samsung and SK Hynix.

South Korean President Lee Jae-myung said on Monday that the stock market was expected to experience volatility but he believed domestic shares were still "slightly undervalued".