Major investment funds are rapidly shifting capital away from Asian markets and pausing engagements in artificial intelligence deals, driven by anxieties stemming from escalating oil prices due to the heightened instability in the Middle East, according to a report by Bloomberg.
The publication states that over a single week, foreign investors divested approximately $3.1 billion worth of South Korean equities. Taiwan experienced an even larger outflow, totaling $3.6 billion, marking its most significant weekly reduction since the close of December 2025.
Bloomberg has observed that the downturn has primarily impacted firms focused on semiconductor production. In South Korea, shares of Samsung Electronics Co. and SK Hynix Inc. saw declines approaching 20%, while Taiwan Semiconductor Manufacturing Co. dropped by 7%.
“There has been an aggressive unloading of positions in AI-linked shares and other sectors, as managers seek to pare down exposure in markets where the situation in Iran appears to have worsened,” commented Matthew Haupt, a portfolio manager at Wilson Asset Management. He added that AI stocks are vulnerable because uncertainties persist regarding whether the substantial capital expenditure plans within that sector will yield adequate returns.
Bloomberg has also learned of the White House’s intentions not to deploy strategic reserves to suppress energy prices.
Following the commencement of strikes by the US and Israel against Iran, Tehran declared a halt to maritime trade passing through the Strait of Hormuz. Reuters, citing analysis from RBC’s Helima Croft, reported that regional leaders in the Middle East have cautioned Washington about a potential surge in oil prices exceeding $100 per barrel as a consequence of the US-Iran conflict. According to the agency’s information, prices have already climbed to around $80 per barrel.
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