Seoul and Taipei hit record highs Monday as tech firms led a rally across most Asian markets, tracking a healthy day on Wall Street fuelled by more strong earnings.
But oil prices rose as tensions mounted in the crucial Strait of Hormuz, with the United Arab Emirates reporting Iran fired drones at one of its oil tankers.
Meanwhile, Iran's Fars news agency said Monday that Iranian forces struck a US Navy frigate in a missile attack in the Strait of Hormuz, but the US military quickly denied the claim.
The incidents follow President Donald Trump announcing Sunday that US forces would soon start escorting ships out of the Strait of Hormuz in a "humanitarian gesture" dubbed "Project Freedom".
US Central Command said on X that its forces would begin supporting Project Freedom with guided-missile destroyers, more than 100 land and sea-based aircraft, multi-domain unmanned platforms and 15,000 service members.
However, a senior Iranian official warned Monday that Tehran would consider any US attempt to interfere in the Strait of Hormuz a breach of the ongoing ceasefire.
Oil prices climbed two percent Monday after dropping as much as three percent Friday.
Investors have been playing a waiting game since a US-Iran ceasefire was agreed at the start of April, with just one round of talks taking place that came to nothing.
In the meantime, the United States maintains a blockade of Iranian ports and Tehran is keeping the strait -- through which a fifth of global oil and gas usually passes -- closed.
Optimism was given a boost Friday after an Iranian report that Tehran had delivered the text of a new proposal to mediator Pakistan the night before.
- AI enthusiasm -
Despite the Middle East crisis continuing to rumble along, investors have turned their focus on the corporate world as they jumped back into the AI trade that has propelled several markets to record highs.
Forecast-beating reports from Apple, Google, Microsoft and Samsung have reawakened interest in the artificial intelligence sector after the market tumult caused by the US-Israeli strikes on Iran at the end of February.
"Optimism that AI continues to mask the pain elsewhere," said Swissquote analyst Ipek Ozkardeskaya.
Companies in the S&P 500 are on track to report earnings growth of 27.1 percent, the highest rate in more than four years, according to Factset.
Equities started the month on a broadly positive note, following all-time highs for the S&P 500 and Nasdaq in New York on Friday.
Seoul surged more than five percent and Taipei jumped more than four percent to hit fresh records.
South Korean chip giant SK hynix was the standout, piling on 12.5 percent, while rival Samsung was up more than five percent. Taiwanese counterpart TSMC was 6.6 percent up.
Hong Kong was lifted by a surge in Chinese tech firms including Alibaba, while Mumbai, Singapore, Manila, Wellington and Jakarta were also up.
Paris and Frankfurt were lower in afternoon trading.
Tokyo, Shanghai and London were closed for holidays.
The yen spiked earlier Monday against the dollar, prompting speculation of another intervention. The currency moved sharply higher against the greenback on Friday, with media reports saying that Tokyo had spent $31 billion propping up the beleaguered currency.Â
Finance Minister Satsuki Katayama declined to comment on Monday.
- Key figures at around 1200Â GMT -
West Texas Intermediate (June): UP 2.0Â percent at $103.95 a barrel
Brent North Sea Crude (July): UP 2.7Â percent to $111.12 a barrel
London - FTSE 100: Closed for a holiday
Frankfurt - DAX 40:Â DOWN 0.1 percent at 24,269.10 points
Parus - CAC 40:Â DOWN 0.9 percent at 8,045.58
New York - Dow: DOWN 0.3 percent at 49,499.27 (close)
Hong Kong - Hang Seng Index: UP 1.2 percent at 26,095.88 (close)
Tokyo - Nikkei 225: Closed for a holiday
Shanghai - Composite: Closed for a holiday
Dollar/yen: UP at 157.14 yen from 157.06 yen on Friday
Euro/dollar: DOWN at $1.1698 from $1.1720
Pound/dollar: DOWN at $1.3542 from $1.3578
Euro/pound: UP at 86.38 pence from 86.32 pence
dan-rl/cw
Commented