Hong Kong: Asian shares were mostly higher on Monday, but South Korea's Kospi fell nearly 5 per cent as investors unloaded more stocks linked to artificial intelligence.
Japan's markets were closed on Monday for a holiday, while US futures were mixed.
Oil prices jumped more than 2 per cent, with Brent crude rising above $90 a barrel as the US and Iran moved closer to resuming an all-out war. Early on Monday, the US announced more attacks for a ninth straight night. Iran has responded to US strikes by targeting US allies across West Asia.
Brent crude, the international benchmark, rose 2.6 per cent to $90.40 a barrel, while US benchmark crude climbed 2.2 per cent to $83.58 a barrel.
"The US and Iran continue to exchange strikes, which are proving to be deadly for both sides," ING commodities strategists Warren Patterson and Ewa Manthey wrote in a commentary on Monday. "If this escalation goes unchecked, we could return to an environment of wide-scale attacks across the Persian Gulf."
Tanker traffic through the Strait of Hormuz, a crucial waterway for global oil transport, has nearly ground to a halt, adding pressure to supplies, they noted.
In Asian trading, the Kospi, which has benefited substantially from the global AI frenzy, sank 4.9 per cent to 6,490.97. Two of its most valuable stocks posted losses. Samsung Electronics fell 4.4 per cent, while memory chipmaker SK Hynix declined 3.3 per cent.
Taiwan's Taiex, also heavily weighted towards AI-related stocks, edged down less than 0.1 per cent as its leading chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), climbed 2 per cent. It had fallen 7.3 per cent on Friday after announcing plans to invest an additional $100 billion to expand its chipmaking capacity in the US.
Hong Kong's Hang Seng rose 2.1 per cent to 25,105.78, while the Shanghai Composite Index gained 1.2 per cent to 3,808.39.
Australia's S&P/ASX 200 edged 0.2 per cent higher to 8,815.30.
India's Sensex slipped 0.9 per cent.
AI-related shares, including chipmakers, declined on Friday, dragging global markets lower. Pledges of huge spending on AI have fuelled concerns that the sector may be in a bubble, prompting many investors to lock in profits after recent gains.
Markets were also unsettled by the rollout of another powerful Chinese AI model, this time by Beijing-based Moonshot AI.
The impact of the new Kimi K3 open-source AI model was similar to China's "DeepSeek moment", which rattled global markets in early 2025. It was seen as another sign that lower-cost, capable Chinese AI models are increasingly challenging rivals such as Anthropic's Claude and OpenAI's GPT.
On Wall Street, the benchmark S&P 500 ended the week down 1 per cent at 7,457.69. The Dow Jones Industrial Average fell 0.8 per cent to 52,146.42, while the technology-heavy Nasdaq Composite lost 1.4 per cent to 25,520.24.
Chipmakers also came under pressure, with Nvidia falling 2.2 per cent, while Broadcom and Advanced Micro Devices (AMD) each declined 1 per cent.
SpaceX, Elon Musk's rocket company, dropped 5.4 per cent after falling below its initial public offering price of $135 a share, reaching its lowest level since it began trading on the Nasdaq last month.
In currency trading, the US dollar slipped to 162.37 Japanese yen from 162.43 yen. The euro traded at $1.1446, up from $1.1438.
