Technology firms rallied on stock markets Monday, with traders gearing up for key US inflation data this week that could lock in a September interest rate rise from the Federal Reserve.
The share price gains -- led by chipmakers in Seoul and Tokyo -- came even after a forecast-busting reading on US jobs Friday that ramped up bets that the Fed will tighten monetary policy on September 16.
A fresh bout of tit-for-tat US-Iran strikes at the weekend pushed oil prices higher and added upward pressure to inflation expectations.
Average diesel prices in the United States climbed to a new record Monday, the motorists' association AAA said, as damage to Gulf refineries during the war against Iran disrupted supplies.
For stock markets, "many of the headlines from the dominant AI theme remain positive", noted Dan Coatsworth, head of markets at AJ Bell.
"But investors are having to contend with the potential for an interest rate hike at the US Federal Reserve's meeting later this month."
US consumer prices for August will be released on Friday, with a worsening of core inflation likely to cement investor expectations that the Fed will hike interest rates.
After July's rout of AI-linked firms, dealers have been edging back into the sector, confident that the vast sums invested in recent years will pay off -- despite concerns about elevated valuations.
Wall Street was closed for trading on Monday for the US Labor day holiday.
Investors are looking ahead to earnings from tech titan Oracle on Thursday. The release will be pored over for a fresh idea about the outlook for the AI boom.
South Korea's Samsung added 5.7 percent to its share price Monday and SK hynix jumped 8.3 percent.
Tech investment giant SoftBank soared more than 11 percent.
On broader markets, Seoul ended more than four percent higher and Tokyo added more than two percent, with Taipei up 1.7 percent thanks to a spike in chipmaker TSMC.
However, Hong Kong, Singapore, Wellington, Manila, Jakarta and Mumbai fell.
The eurozone economy grew more than expected in the second quarter according to official data Monday.
The Paris stock market ended the day with a slight gain in early afternoon deals, while Frankfurt dipped.
Separate data showed Germany factory output fell more than expected in July, underscoring the economy's fragility as Chancellor Friedrich Merz comes under mounting pressure to boost growth.
Outside the eurozone, London's stock market also dipped.
"Markets may look calm on the surface, but the combination of central-bank meetings, US inflation, Oracle earnings and flows in China tech suggests the conditions for a more meaningful expansion in volatility are building," said analyst Chris Weston at Pepperstone.
The absence of US investors and traders impacted the currency markets.
"There was a lot going on in FX today, despite, or maybe because of, the US holiday," said Trade Nation analyst David Morrison.
"The yen made significant gains versus all the majors, raising speculation that perhaps Japan was intervening once again," added Morrison, who noted that the yen was trading at its highest level against the dollar since February.
While there has been no official confirmation, Morrison said that any intervention Monday would have an outsize impact with less liquidity in the markets due to US traders being off.
Copper prices set a fresh record high of $14,533 a tonne on worries about production.
London - FTSE 100: DOWN less than 0.1 percent at 10,822.13 points (close)
Paris - CAC 40: UP 0.3 percent at 8,306.15 (close)
Frankfurt - DAX: DOWN 0.2 percent at 26,006.53 (close)
Tokyo - Nikkei 225: UP 2.1 percent at 66,399.84 (close)
Hong Kong - Hang Seng Index: DOWN 0.9 percent at 25,413.12 (close)
Shanghai - Composite: UP 0.1 percent at 3,932.70 (close)
New York - Dow: Closed for a public holiday
Dollar/yen: DOWN at 154.24 yen from 156.26 yen on Friday
Euro/dollar: UP at $1.1632 from $1.1613
Pound/dollar: UP at $1.3544 from $1.3516
Euro/pound: DOWN at 85.90 pence from 85.92 pence
Brent North Sea Crude: UP 1.4 percent at $97.64 per barrel
West Texas Intermediate: UP 1.6 percent at $92.90 per barrel
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