Asia shares choppy as South Korea chip push steadies sentiment; Iran truce in focus

South Korea's KOSPI pares losses to end 0.2 percent lower

FILE PHOTO: A currency dealer walks past an electronic board displaying the Korea Composite Stock Price Index (KOSPI), at the dealing room of a bank in Seoul, South Korea, Jun 18, 2026. Yonhap via REUTERS

Asian markets were choppy on Monday as investors weighed AI-driven growth against rising cost pressures, while South Korea's sweeping investment push into chips and AI steadied ‌sentiment after recent losses and a fragile US-Iran ceasefire.

The MSCI EM Asia gauge inched higher and the index tracking ASEAN stocks advanced 0.6 percent . Both indexes hit a two-week low in the previous session.

Equity markets moved unevenly, reflecting investor caution over stretched AI-driven rallies, particularly in South Korea and Taiwan, and lingering uncertainty about how rising costs could filter through the sector.

South Korea's KOSPI, which lost 7 percent last week, shed as much as 3.4 percent earlier in the session on Monday,

However, it pared much of its losses, ending 0.2 percent lower, after South Korea rolled out sweeping chip and ⁠AI mega-projects, with investments worth more than $576 billion over several years.

With the AI investment cycle becoming increasingly capital intensive, "investors are likely to question whether demand for AI chips and data centre capacity can continue growing fast enough to justify such aggressive spending," said Lukman Leong, an analyst at Doo Financial Futures, a brokerage.

Stocks in Taiwan gained as much as 2.1 percent . The index has risen about 56 percent so far this year and is the second-best-performing market in the region behind the KOSPI's nearly 100 percent rally.

In Southeast Asia, Thailand's stock index rose 1.7percent, driven mainly by electronic products manufacturer Delta Electronics Thailand's 5 percent gains on Monday. The firm, which counts Nvidia as a client, has surged 84 percent this year.

Globally, the US and Iran traded fresh strikes over the weekend before they agreed to stop their tit-for-tat attacks and meet in Qatar on Tuesday, leaving investors nervous about a fragile ceasefire.

Malaysian shares shed 0.4percent . Equities in Jakarta, ‌slid 1percent and were set for their worst June since 2015. The index was also tracking its sixth consecutive month of declines, with losses of about 4.7 percent in June.

The dollar index was steady around 101.34, supported by lingering geopolitical uncertainty and rising prospects of a Federal Reserve rate hike this year.

"Across EM Asia, regional currencies are broadly stable, with the lack of a sustained spike in oil prices easing pressure on net energy importers such as India, Thailand, and the Philippines," added Leong.

"The relatively muted market reaction also reflects expectations that any Middle East conflict will remain contained, allowing investors to refocus on domestic fundamentals."

The Malaysian ringgit led gains, rising more than 0.6 percent to 4.057 per dollar, touching its highest point in nearly two weeks. The Indonesian rupiah advanced to 17,850 per dollar.

The Philippine peso and the Thai baht were largely flat. The South Korean won fell 0.4 percent, the Taiwanese dollar inched 0.2 percent lower.

Elsewhere, the Bolivian government said on Friday that the country would adopt a flexible exchange-rate system, effectively devaluing its currency by ending a 15-year dollar peg, in a major policy shift aimed at restoring economic stability.