Hong Kong, China: Asian markets fluctuated Monday as investors struggled to maintain last week's late tech recovery, with traders turning their focus to the upcoming earnings season, while oil prices fell on further supplies passing through the Strait of Hormuz.

After a tough end to June -- fueled by worries that valuations linked to the AI boom may have been overdone -- the mood was lifted on Thursday by data showing fewer US jobs than expected were created last month.

That soothed fears the Federal Reserve could hike interest rates soon to bring down inflation, and fueled a healthy bounce across Asia, led by Seoul.

However, traders remain edgy and tech firms once again saw big moves in early trade Monday, with Seoul swinging from a near two percent gain to a more than 2% loss.

Tokyo was also in the red with Singapore and Sydney, while Hong Kong, Shanghai, Wellington and Taipei edged up.

Dominant force

The AI theme remains the dominant force in markets, with talk now centered on when firms will see returns on the trillions of dollars invested in the sector and whether valuations have run ahead of themselves.

Alphabet, Amazon, Meta and Microsoft have said they would put aside more than $725 billion for the industry this year alone.

Sentiment was given a lift by Taipei-listed Hon Hai, which announced a forecast-beating jump in April-June sales and predicted more growth to come.

The firm, also known as Foxconn, has gone beyond assembling low-margin iPhones to making AI servers for Nvidia, along with electric vehicles and robots.

The firm's shares rose more than 6% in Taipei.

The report comes at the start of an earnings season that will be pored over for an idea about companies' plans for AI and their outlook in light of the huge sums stumped up so far.

Also in view is the Wall Street debut of South Korean chip titan SK hynix, which sees its $29 billion listing on Friday.

Crude prices extended losses as tankers continued to pass through the Strait of Hormuz and on optimism over US-Iran peace talks.

However, SPI Asset Management's Stephen Innes warned the benefits could take some time to feed through the economy.

"Energy knock-on effects rarely arrive all at once," he wrote.

"First crude moves, then freight, transport, consumer confidence, corporate margins, inflation expectations, and eventually the questions central bankers would rather avoid.

"A few more tankers moving safely through Hormuz may take the edge off the immediate panic premium, but it does not undo the cost pressures already working their way through the global economy."

And Dr Karsten Junius, chief economist at Bank J Safra Sarasin, added: "Oil exports remain well below pre-war levels and bottlenecks are likely to persist.

"Meanwhile, efforts to re-build strategic and commercial reserves should support demand. As a result, oil prices are likely to settle around $75-$80 a barrel over the coming year, keeping the inflation trajectory more elevated this year."

Key figures around 0230 GMT

Tokyo - Nikkei 225: DOWN 1.2% at 68,919.14 (break)

Seoul - Kospi: DOWN 2.4% at 7,894.58

Hong Kong - Hang Seng Index: UP 0.4% at 23,440.64

Shanghai - Composite: UP 0.3% at 4,055.47

Dollar/yen: UP at 161.79 yen from 161.29 yen on Friday

Euro/dollar: DOWN at $1.1430 from $1.1442

Pound/dollar: DOWN at $1.3341 from $1.3355

Euro/pound: DOWN at 85.65 pence from 85.68 pence

West Texas Intermediate: DOWN 0.1% at $68.64 a barrel

Brent North Sea Crude: DOWN 0.3% at $71.93 a barrel

London - FTSE 100: UP 0.3% at 10,679.03 (close)

New York - Dow: Closed for public holiday

Alphabet

Asian markets mixed as tech recovery stutters, oil slips

Google says hackers are sending extortion emails to executives