Asian shares were mostly higher on Monday as oil prices fell more than 4 per cent after the US and Iran refrained from further fighting while discussing a possible resumption of negotiations on an interim ceasefire deal.

Markets reacted with relief to the pause after nearly two weeks of escalating fighting triggered by Iran's firing at ships trying to transit the Strait of Hormuz. Early on Monday, US futures rose and the price of Brent crude, the international standard, dropped 4.6 per cent to USD 87.46 a barrel. US benchmark crude fell 5.1 per cent to USD 84.79 per barrel.

In Asia, Japan's Nikkei 225 rose 0.2 per cent to 64,771.02, while South Korea's Kospi was up 0.3 per cent at 6,708.87. Hong Kong's Hang Seng advanced 0.8 per cent to 25,164.81 and the Shanghai Composite index gained 0.4 per cent to 3,827.96. In Australia, the S&P/ASX 200 surged 1.3 per cent to 8,883.00. Taiwan's Taiex slipped 0.3 per cent and India's Sensex added 0.7 per cent.

Shares in Chinese memory chipmaker CXMT soared about 470 per cent as they began trading on Shanghai's technology board. The jump made it China's most valuable listed company, with an estimated market capitalisation of 3.3 trillion yuan, nearly USD 490 billion.

The Pentagon did not respond to questions about the pause in attacks on Iranian coastal areas and infrastructure after the recent fighting. On Friday, the S&P 500 was little changed, edging up by less than 0.1 per cent to 7,411.98. The index recorded its second straight losing week, something that had not happened since March. The Dow Jones Industrial Average rose 0.5 per cent to 51,947.25, while the Nasdaq composite slipped 0.6 per cent to 24,975.82 as losses in major technology stocks weighed on the index.

Micron Technology fell 7 per cent and Broadcom dropped 2.7 per cent, both contributing to the Nasdaq's decline. Recent rises in energy prices and fresh tariffs announced last week by the administration of US President Donald Trump could lead to higher inflation, which has been straining consumers and affecting expectations around the Federal Reserve's interest rate policy. The Fed meets this week, but rising inflation has weakened hopes of an interest rate cut any time soon. Wall Street has been leaning towards a possible rate hike to contain higher prices.

Higher energy costs are taking up a larger share of household budgets, which have shifted more towards essentials such as petrol. Nationally, petrol costs USD 4.11 a gallon, according to AAA. That is still lower than this spring, when the conflict in Iran widened, but almost a dollar higher than a year ago. At the same time, corporate earnings reports are drawing attention to whether broader profits from heavy spending on artificial intelligence can be sustained, with companies such as Alphabet and Nvidia investing heavily even as investors question whether the returns will justify the high market valuations that have lifted stocks this year.

Overall, Asian markets moved higher as easing tensions between the US and Iran pushed oil prices lower, while investors also tracked Wall Street's mixed finish, inflation concerns, the Federal Reserve's upcoming meeting and questions over profits from the artificial intelligence spending boom.