Chip stocks in Asia came under renewed pressure on Monday, with South Korea's KOSPI .KS11 retreating from Friday's record gains and falling 5.1%.
The move underscores the fragile sentiment surrounding semiconductor shares, which have driven wild swings on the South Korean benchmark and broader Asian equity markets.
Chinese equities .CSI300 slipped 1%, while Taiwan's tech-heavy bourse .TWII edged 0.6% higher. A spate of manufacturing data across Asia reassured investors, but risks from the U.S.-Iran war, now in its sixth month, persist.
"The early July data for Asia were generally encouraging. Most of the region has shrugged off the effects of higher energy prices and Middle East-related uncertainty," said Gareth Leather, a senior Asia economist at Capital Economics.
India was the main exception, however, Leather said. The country's manufacturing sector expanded at its slowest pace in nearly five years in July.
Equities in emerging Europe .MIME00000PUS outperformed broader EM stocks in the previous month despite the uncertainty in the Middle East, and rose 0.9% on Monday, as Polish blue-chip stocks .WIG20 gained 0.9%, and reached an all-time high in early trading.
Data showed Poland's manufacturing downturn in July eased sharply, and jobs rose for the first time since April 2025.
Hungarian benchmark .BUX edged 0.2% higher. Manufacturing activity in the country expanded at a slower pace in July than in the previous month.
The Hungarian forint EURHUF= advanced 0.3% against the euro, while the Polish zloty EURPLN= gained 0.1%.
Elsewhere, Indonesia's economic growth likely slowed in the second quarter on lower consumer demand, a Reuters poll of economists showed. The Indonesian rupiah IDR= traded marginally higher against the dollar.
Asian currencies were range-bound against the dollar, while South Africa's rand ZAR= firmed 0.5% ahead of July's manufacturing activity data.
South African equities .JTOPI rose 0.8%, tracking precious metal prices.
Turkey's month-on-month inflation in July rose just below expectations, data showed on Monday. The Turkish lira TRYTOM=D3 was muted.
Separately, rating agency Fitch affirmed Romania's rating at "Bbb'-", with a negative outlook on Friday.
Emerging market stocks and currencies mixed
Emerging-market stocks were mixed on Monday, as weakness in Asian chipmakers offset support from a sharp decline in oil prices, while currencies traded in a narrow range against a stable dollar.
MSCI's index tracking global EM equities .MSCIEF fell 1%, starting the month on a weaker footing following losses in the previous month, while the equivalent currencies gauge .MIEM00000CUS edged 0.1% lower.
Investors also kept a close watch on developments in the Middle East after U.S. President Donald Trump held off fresh attacks on Iran and said that talks would happen on Monday, though declining to set a deadline.
Oil prices dropped 4.3% after more than a 20% surge in the last month following renewed hostilities in the Gulf region. O/R
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