Asian shares lifted by AI as Gulf strains lift oil prices

Asian shares rose Monday as AI-driven chip demand supported equities, while stalled Gulf diplomacy kept Strait of Hormuz in focus and lifted Brent and WTI.

AI trade steadies regional equities

Semiconductor and AI hardware demand underpinned gains across the region. Japan's Nikkei (.N225) added 0.5% after rallying nearly 5% last week to record highs.

South Korea's KOSPI (.KS11) climbed 1.3%, following an 8% surge last week, and Taiwan's Taiex (.TWII) also booked almost 6% weekly gains. MSCI's Asia ex-Japan index (.MIAPJ0000PUS) inched up 0.2%.

Nvidia (NVDA.O) chief Jensen Huang opens Taiwan's Computex on Monday, with an address centered on AI and the company's latest product push. The event also spotlights Taiwan's strategic role in the supply chain.

Gulf impasse lifts crude benchmarks

Energy markets firmed as hopes for a rapid reopening of the Strait of Hormuz faded. Brent crude rose 1.9% to $92.89 a barrel, while U.S. crude gained 2.4% to $89.46.

Negotiators from Washington and Tehran are working toward a deal, but President Donald Trump has remained silent on their progress. On Saturday, Defense Secretary Pete Hegseth said the United States was ready to restart attacks on Iran if talks fail.

Regional tensions were compounded by an Israeli push deeper into Lebanon against Iranian-backed Hezbollah. The escalation added to concerns over supply risks and shipping disruptions in a key energy corridor.

JPMorgan's Michael Feroli said the most acute macro risk could ease if tanker traffic resumes, though not all conditions would snap back quickly. He noted oil prices may stay elevated as inventories are rebuilt and damaged infrastructure is repaired.

What investors are tracking next

Equity traders will parse Huang's Computex remarks for product cadence and capex signals that could sustain AI hardware orders. Index moves tied to chipmakers suggest positioning remains skewed to the theme despite volatility risk.

On the macro side, updates on Gulf negotiations and any change in shipping flows through the Strait of Hormuz are pivotal for crude. Sustained oil gains at current levels could test risk appetite across rate-sensitive sectors in Asia.

In the near term, watch whether last week's outsized equity advances in Korea and Taiwan consolidate or extend, and whether oil's bid abates if diplomacy gains traction. Headline risk around the region remains the swing factor.