Among the main moves across markets, Topix gained 0.6% and S&P/ASX 200 added 0.9%

Asian stocks gained and oil dropped on Monday as Iran and the US refrained from retaliatory strikes, easing concerns over potential disruptions to Middle East energy supplies after a recent escalation in the war.

Brent crude dropped 7.4% to below $90 a barrel, before paring losses as Iran and US paused attacks on each other.

MSCI’s Asia-Pacific equities gauge added 0.4%.

Among the main moves across markets, Topix gained 0.6% and S&P/ASX 200 added 0.9%.

Treasuries gained along with government bonds in Australia and New Zealand as inflation concerns receded. Gold led precious metals higher.

A resolution to the conflict would be a positive development, said Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab. The pause in attacks raises hopes that the two sides will enter negotiations.

Investors are also awaiting earnings from megacap technology companies after a recent backlash against heavy spending on AI.

Tensions in the Middle East had sent oil prices soaring in July, overshadowing a lower-than-expected reading on June consumer prices that seemed to offer officials breathing room to keep rates stable.

The Singapore dollar firmed against the US currency after officials further tightened monetary policy.

The Monetary Authority of Singapore, which uses the exchange rate as its main policy tool rather than interest rates, raised the rate of appreciation of its policy band very slightly, it said. It left the width and centre unchanged.

The yield on the Treasury 10-year dropped five basis points to 4.63%. Non-interest-bearing gold jumped over 1% to $4,100 an ounce. The yen firmed to around 163.60 per US dollar.

Another key focus for markets will be earnings from megacap technology companies after a recent round of sell-offs in AI stocks rekindled doubts over whether billions of dollars being poured into infrastructure will generate commensurate returns.

The sell-off showed how much the narrative around AI and the technology companies has shifted.