(Bloomberg) — Asian stocks tumbled at first of a contemporary week as fears of a deeper US economic slowdown and rising tensions throughout the Middle East prompted investors to shun risk assets.

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Equity gauges across the region stared at bleak milestones early on Monday, with Japan and the tech-heavy markets of Taiwan and Korea bearing the brunt of the selloff. The MSCI Asia Pacific Index plunged as much as 3.8% following the identical decline on Friday, with financial shares one other major drag.

Monday’s rout brought the regional equity benchmark a whisker away from erasing it gain for the 12 months, while its slide from a July 11 peak approached the ten% mark — which could signal a technical correction.

The flight to safety has intensified after weak US economic data spurred concern that the Federal Reserve might have been behind the curve in cutting rates and might now likely should ease monetary policy aggressively to maneuver off a recession. Meanwhile, geopolitical tensions throughout the Middle East also sapped risk appetite as Israel braced for a possible attack from Iran and regional militias in retaliation for assassinations of Hezbollah and Hamas officials.

This “feels more like a world equities risk off normally and the profit taking is being done in sectors or geographies which have done well,” said Vey-Sern Ling, managing director at Union Bancaire Privee.

In Japan, the Topix and Nikkei 225 gauges slid greater than 7% each in early trading as investor confidence crumbled on a surge throughout the yen, tighter monetary policy and broader concern with regard to the US economy. The declines drove recent losses for the two indexes to greater than 20% each, putting them heading in the proper direction for bear markets.

Taiwan Semiconductor Manufacturing Co., a very powerful stock on the MSCI Asia gauge by market value, lost greater than 7%, dragging the Taiex lower with it. South Korea’s benchmark Kospi Index slid over 5% since the rotation away from tech-heavy markets intensified. The Kospi also took its losses from a July 11 peak to greater than 10% to maneuver for a technical correction, with data showing that foreign investors led Monday’s selloff.

A circuit breaker halted trading of Topix futures for about 10 minutes, while Korea’s stock bourse also temporarily halted sell orders for program trading throughout the Kospi after futures on the Kospi 200 Index plunged greater than 5%.

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“Sentiment toward stocks will likely remain fragile for now since the market debate will likely remain on US soft-landing versus a recession, with the next major labor market report a month out,” said Chetan Seth, an Asia-Pacific equity strategist at Nomura Holdings Inc.

Sectors to Watch

Markets at a Glance

• MSCI Asia Pacific Index falls 3%

• Japan’s Topix Index falls 5.7%; Japan’s Nikkei Index declines 4.6%

• China’s CSI 300 Index was little modified; Hong Kong’s Hang Seng Index declines 0.5%; Hong Kong’s Hang Seng China Enterprises Index falls 0.7%

• Taiwan’s Taiex Index falls 6.7%

• South Korea’s Kospi Index declines 5.4%; South Korea’s Kospi 200 Index falls 5.8%

• Australia’s S&P/ASX 200 Index falls 2.7%; Latest Zealand’s S&P/NZX 50 Gross Index declines 1.7%

• Singapore’s Straits Times Index falls 2.8%; Malaysia’s KLCI Index declines 2.4%; Philippines’s PSEi Index falls 2.1%; Indonesia’s JCI Index falls 2.1%; Vietnam’s VN Index falls 1.5%

• 10-year Treasury yield declines 0.8 basis points

• Bloomberg Dollar Index falls 0.1%

• West Texas Intermediate crude rises 0.6% to $74 a barrel

• Euro rises 0.1%

Here Are the Most Notable Movers

• LY Corp. shares jump as much as 9.5% after the operator of Japan’s biggest messaging app said it plans to buy back as much as ¥150 billion ($1 billion) value of its own shares.

• Nintendo shares plunge as much as 13%, essentially essentially the most since July 2016, after the company reported operating income for the first quarter that missed the everyday analyst estimate, with some looking further ahead for demand to decide on back up starting from the second quarter.

• Mitsubishi UFJ Financial Group shares fall as much as 21% in Mon. morning trading, its biggest intraday decline on record.

Related Market News

• Taking Stock: Last week’s rate hike in Japan hammered the benchmark index essentially essentially the most in eight years. Despite the turmoil, some investors still place confidence within the long-term outlook for the country’s stocks.

• Global Wrap: A worldwide stocks selloff deepened on Monday as concerns grew that the Federal Reserve is behind the curve with policy support for a slowing US economy, sending investors into the safety of bonds. Japanese shares plunged as traders priced in additional domestic rate hikes.

OPTIONS

• Trip.com, Sinopharm, Sands China, CCB: Hong Kong Options Wrap

• Posco Holdings, Hyundai Motor: South Korea Options Wrap

This story was produced with the assistance of Bloomberg Automation.

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