Asian markets plunged on Wednesday, led by a dramatic selloff in South Korea, as investors rushed to unwind chipmaker bets amid rising fears that a prolonged Middle East war could trigger a sustained energy shock. South Korea Triggers Circuit Breaker KOSPI Index slumped more than 11%, prompting a circuit breaker. Two-day losses widened to 17% — the steepest since 2009 . The Korean won dropped to a 17-year low , compounding market stress. Elsewhere: Nikkei 225 fell 4.3% Taiwan stocks dropped 3.6% S&P 500 futures slipped 0.6% Key Point: Heavy profit-taking in semiconductor stocks amplified the regional selloff. Chipmakers had been among the hottest trades in recent months, driven by AI demand. Investors are now cashing out of crowded positions. Oil Surge Drives Inflation Fears Brent crude rose more than 13% this week to US$82.08 per barrel. Prices retreated slightly after Donald Trump ordered insurance guarantees for Gulf shipping and signalle...
Malaysia’s benchmark index tumbled sharply on Monday as escalating tensions in the Middle East and renewed US tariff concerns triggered a regional sell-off.
Market Snapshot
FTSE Bursa Malaysia KLCI fell as much as 32.33 points, or nearly 2%, before trimming losses to close down 0.96% at 1,700.21 points.
In the broader market:
Losers outnumbered gainers four to one
3.9 billion shares traded, valued at nearly RM4 billion
The ringgit weakened in line with regional currencies as the US dollar strengthened following the US-Israel strike on Iran.
Key Point: Geopolitical tensions and higher US tariffs triggered broad-based selling pressure on Bursa Malaysia.
Tariff Pressure Builds
The US implemented a new 10% global tariff last week, with President Donald Trump reportedly pushing to raise it to 15%.
The combined impact of tariff uncertainty and geopolitical risks dampened investor sentiment across Asia.
Hong Leong Investment Bank noted that the conflict may provide temporary strength to the US dollar while weakening the ringgit, potentially reverberating across local equities.
Oil Prices Surge, Energy Stocks Buck Trend
Oil prices spiked after reports of attacks on ships near the Strait of Hormuz, a key chokepoint that handles about 20% of global oil supply.
Brent crude jumped more than 5% to US$76.61 per barrel.
Energy counters on Bursa Malaysia rose in response, providing limited support to the broader market.
Heavyweights Drag Index Lower
Among major decliners:
MR D.I.Y. Group (M) Bhd fell 7.26% to RM1.66
Malayan Banking Bhd dropped 2% to RM11.72
As the largest component on the index, Maybank’s decline weighed significantly on the benchmark.
Shock Likely Temporary
According to UOB Kay Hian’s head of research Vincent Khoo, the current episode appears to be a volatility shock rather than a structural macro disruption.
Key Point: Analysts expect the market impact to be short-lived rather than a long-term economic dislocation.
Companies with Middle East Exposure
While initial assessments suggest minimal overall impact on Malaysian equities, several companies have meaningful exposure to the region:
DXN Holdings Bhd — 10% revenue from the Middle East, with a plant in Dubai
MNRB Holdings Bhd — 10% of reinsurance gross written premiums from MENA
Wasco Bhd — fabrication yard in Dubai and pipe coating facility in Qatar
Malakoff Corporation Bhd — 25%-30% of earnings from utilities concessions in Saudi Arabia, Oman and Bahrain
Investors are likely to monitor developments closely for any escalation that could disrupt trade routes or energy supply chains.
Outlook
The sharp sell-off underscores market sensitivity to geopolitical risk and trade policy uncertainty. However, with oil prices providing some sectoral support and analysts characterising the event as a short-term volatility spike, attention will now shift to:
Further developments in the Middle East
US tariff policy direction
Currency movements and capital flows
Overall theme: Heightened geopolitical tension triggered a risk-off move, but structural fundamentals remain intact.
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