Most Asian stock markets ended higher on Monday, but South Korea's benchmark Kospi index plunged nearly 5% as investors sold off artificial intelligence (AI)-related stocks.
Japanese markets remained closed for a public holiday, while US stock futures showed mixed trends.
Oil prices continued to rise, gaining more than 2%, as tensions between the United States and Iran intensified, raising fears of supply disruptions. Brent crude climbed 2.6% to $90.40 a barrel, while US benchmark crude rose 2.2% to $83.58 a barrel.
The latest gains came after the US carried out attacks for a ninth consecutive night, with Iran continuing retaliatory strikes against US allies across the Middle East.
Analysts at ING said the ongoing exchange of attacks could lead to wider conflict across the Persian Gulf if the situation continues to escalate. They also noted that tanker traffic through the Strait of Hormuz, a key route for global oil shipments, has slowed sharply, adding pressure to oil supplies.
In stock markets, South Korea's Kospi fell 4.9% to 6,490.97, dragged down by losses in major technology shares. Samsung Electronics dropped 4.4%, while memory chipmaker SK Hynix declined 3.3%.
Taiwan's Taiex index slipped less than 0.1%. However, Taiwan Semiconductor Manufacturing Co. (TSMC), the island's largest chipmaker, rose 2% after tumbling 7.3% on Friday. Investors had reacted negatively to the company's announcement that it would invest an additional $100 billion to expand chip production in the United States.
Elsewhere in the region, Hong Kong's Hang Seng Index advanced 2.1% to 25,105.78, the Shanghai Composite Index gained 1.2% to 3,808.39, and Australia's S&P/ASX 200 edged up 0.2% to 8,815.30. India's Sensex, however, fell 0.9%.
AI-related technology shares remained under pressure after heavy losses on Friday, reflecting growing concerns that the sector may be overvalued following months of strong gains. Many investors chose to book profits by selling their holdings.
Market sentiment was also affected by the launch of a new open-source AI model, Kimi K3, developed by Beijing-based Moonshot AI. The release drew comparisons with the "DeepSeek moment" in early 2025, when a Chinese AI model unsettled global markets by demonstrating that lower-cost Chinese AI systems could compete with leading products from companies such as Anthropic and OpenAI.
On Wall Street on Friday, the S&P 500 fell 1% to 7,457.69, the Dow Jones Industrial Average lost 0.8% to 52,146.42, and the Nasdaq Composite dropped 1.4% to 25,520.24.
Chipmakers also posted losses, with Nvidia falling 2.2%, while Broadcom and Advanced Micro Devices (AMD) each declined about 1%.
SpaceX shares dropped 5.4%, falling below their initial public offering price of $135 and hitting their lowest level since the company's Nasdaq debut last month.
In currency trading, the US dollar slipped to 162.37 Japanese yen from 162.43 yen, while the euro rose slightly to $1.1446 from $1.1438.