- Asian stocks mostly rose, led by Japan's Nikkei and South Korea's Kospi gains
- Wall Street closed at record highs, boosting regional market sentiment for the week
- Oil prices climbed due to doubts over US-Iran Strait of Hormuz shipping talks
Asian stock markets traded mostly higher on Monday, taking their cue from a strong finish on Wall Street last week, where the S&P 500 closed at a record high. Investors, however, remained cautious as uncertainty over US-Iran negotiations and elevated crude prices kept geopolitical risks in focus.
Japan's Nikkei 225 climbed 1.62% and South Korea's Kospi advanced 1%, while Australia's ASX 200 slipped 0.25%.
The positive lead from US equities supported sentiment across the region. The S&P 500 ended Friday at an all-time closing high, while the Dow Jones Industrial Average and Nasdaq Composite also finished higher, giving Asian markets a stronger starting point for the week.
Oil prices, meanwhile, extended their advance as expectations of a near-term agreement between Washington and Tehran to restore shipping through the Strait of Hormuz weakened. Brent crude rose 0.8% to above $84 a barrel in early Asian trading after gaining more than 5% over the previous three sessions.
The outlook for the Strait remains a key market focus. Iran denied engaging in direct negotiations with the US over reopening the waterway, weakening optimism that shipping disruptions could ease quickly. Last week, US Treasury Secretary Scott Bessent had suggested that an agreement could be close, but President Donald Trump later said Washington was only "semi-negotiating" with Tehran and wanted to maintain economic pressure.
Higher oil prices remain a potential risk for markets because a prolonged rise in energy costs could add to inflationary pressure and complicate the outlook for interest rates.
The Japanese yen was also in focus, trading slightly weaker at around 157.90 per US dollar. The currency had strengthened sharply on Friday after the release of US labour-market data.
US equity futures pointed to a cautious start after Wall Street's major benchmarks posted their strongest weekly performance since April. S&P 500 futures fell about 0.2%, Nasdaq-100 futures gained 0.1% and Dow futures declined 99 points, or 0.2%.
Investors will now track developments around the Strait of Hormuz, movements in crude prices and the durability of Wall Street's record-setting rally for cues on the direction of Asian markets.
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