Volkswacht Bodensee - Seoul, Taipei hit records on tech rally

Despite the Middle East crisis continuing to rumble along, investors have also focused on the corporate world where stellar first quarter earnings have prompted a return to the AI trade that has propelled several markets to record highs.

Forecast-beating reports from Apple, Google, Microsoft and Samsung have reawakened interest in the artificial intelligence sector after the market tumult caused by the US-Israeli strikes on Iran at the end of February.

There's "optimism that AI continues to mask the pain elsewhere", said Swissquote analyst Ipek Ozkardeskaya.

Companies in the S&P 500 are on track to report earnings growth of 27.1 percent, the highest rate in more than four years, according to FactSet.

But there are further tech firms to report earnings, including Palantir later on Monday followed by Advanced Micro Devices and Arm Holdings later this week.

"Given the recent tech rally, particularly in chips, investor expectations are high, and therefore, the potential for a 'sell on the news' reaction to results is elevated," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR).

The tech-heavy Nasdaq edged higher from a record close as trading got underway in New York, while the S&P 500 dipped.

Briefing.com analyst Patrick O'Hare said that while the stock market may be overstretched, many investors who missed the rally may be looking for a pullback to buy into it.

"That is perhaps why the indices just aren't selling off to any large degree," he said.

Seoul surged more than five percent and Taipei jumped more than four percent to hit fresh records.

South Korean chip giant SK hynix was the standout, piling on 12.5 percent, while rival Samsung was up more than five percent. Taiwanese counterpart TSMC was 6.6 percent up.

Paris and Frankfurt were lower in afternoon trading.

Tokyo, Shanghai and London were closed for holidays.

Oil prices rebounded Monday as the US Navy said destroyers entered the strait as part of a new ship escort mission announced by President Donald Trump over the weekend.

Iran's state TV said the Iranian navy fired a cruise missile "warning shot", while the United Arab Emirates reported earlier that Iran had fired drones at one of its oil tankers.

Tehran's forces effectively closed the strait -- a key route for oil and gas shipments -- in response to the US-Israeli military campaign that began on February 28, while Washington is maintaining a blockade of Iranian ports.

Trump has indefinitely extended an initial two-week ceasefire that brought a halt to the fighting, but the conflict -- and its widespread economic fallout -- remains unresolved.

The yen spiked earlier Monday against the dollar, prompting speculation of another intervention. The currency moved sharply higher against the greenback on Friday, with media reports saying that Tokyo had spent $31 billion propping up the beleaguered currency.

- Key figures at around 1330 GMT -

West Texas Intermediate (June): UP 0.2 percent at $102.11 a barrel

Brent North Sea Crude (July): UP 1.8 percent to $110.06 a barrel

New York - Dow: DOWN 0.4 percent at 49,318.06 points

New York - S&P 500: DOWN 0.1 percent at 7,222.76

New York - Nasdaq Composite: UP less than 0.1 percent at 25,126.77

London - FTSE 100: Closed for a holiday

Frankfurt - DAX 40: DOWN 0.4 percent at 24,269.10

Paris - CAC 40: DOWN 1.0 percent at 8,031.07

Hong Kong - Hang Seng Index: UP 1.2 percent at 26,095.88 (close)

Tokyo - Nikkei 225: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Dollar/yen: UP at 157.10 yen from 157.06 yen on Friday

Euro/dollar: DOWN at $1.1707 from $1.1720

Pound/dollar: DOWN at $1.3552 from $1.3578

Euro/pound: UP at 86.41 pence from 86.32 pence

S.Gantenbein--VB