Seoul's stock market led a collapse for technology stocks Tuesday after a sell-off on Wall Street over renewed concern over companies' huge AI spending.
Oil prices fell after strong losses Monday when the US said it was temporarily lifting oil sanctions on Iran, amid increased cargo traffic in the Strait of Hormuz.
Investors are once more questioning the long-running AI-fuelled boom.
Share prices of South Korean chip giants SK hynix and Samsung tumbled more than 12% to drag the Kospi index down 10%, having finished Monday at a record high.
While Washington and Tehran flagged progress at negotiations in Switzerland, traders are struggling to build on last week's stocks rally sparked by news of a deal to end the Middle East conflict.
Joo Won, head of the economic research division at Hyundai Research Institute, said that while this week's share price declines appear to be "excessive... there may still be considerable selling pressure waiting in the wings".
For South Korea, the sharp downward movement reflects "semiconductor stocks having risen too far, too fast, prompting aggressive selling by both foreign investors and domestic institutions", he told AFP.
The Tokyo stock market also took a beating, shedding 3.6%, with tech investment titan SoftBank down more than 10%, Tokyo Electron 6.2% lower and Advantest off more than 2%.
Investors were also keeping an eye on the yen as it came close to a 40-year low against the dollar, making exports including oil more expensive for Japan.
Speculation is mounting that Japanese officials could intervene again in the currency markets to support the yen, having spent over $70bn to do so already last month.
The selling spilled over into Europe, where Frankfurt was down 1.1% as the German semiconductor maker Infineon dropped more than 5% in early trade.
The rout followed heavy selling Monday on Wall Street, where the Nasdaq sank more than 1% as market giants Amazon, Nvidia and Microsoft fell sharply.
But the main victim was Elon Musk's recently listed SpaceX, which plunged more than 16% — wiping hundreds of billions off its valuation.
The fall came as the rocket and satellite company disclosed plans for an "inaugural" bond offering of unspecified quantity, but reportedly seeking to raise billions of dollars.
SpaceX "jumping on the bond train to fund excessive AI and infrastructure spending revives earlier concerns that Big Tech may be spending too much on AI infrastructure and increasingly financing that spending through debt", said Ipek Ozkardeskaya, senior analyst at Swissquote bank.
Elsewhere, oil prices extended Monday's sharp drop that came after the US Treasury said it was temporarily lifting sanctions on Iran to allow it to produce, sell and deliver crude.
Maritime tracking firm Kpler meanwhile said that at least 36 commodity carriers transited the Strait of Hormuz on Monday, a record level since the start of the Middle East war in late February.
That represented nearly one-third of normal peacetime traffic through the strait, which normally sees around a fifth of the world's oil and gas exports.
