(Bloomberg) -- A rally in shares tied to artificial intelligence helped Asia’s stock benchmark wipe out losses sparked by the Iran war and climb back to an all-time high.

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The MSCI Asia Pacific Index jumped as much as 2.3% on Monday, the most since April 8. Tech-heavy benchmarks in South Korea and Taiwan surged more than 4% each. The moves came after the S&P 500 Index extended a record-breaking streak Friday to mark a fifth week of gains, following solid earnings from tech mega caps.

The AI theme — a dominant feature of markets before the outbreak of the Middle East conflict — has returned to the forefront as last month’s ceasefire agreement between the US and Iran calmed investor nerves. Asia’s stock benchmark surged more than 13% in April, erasing almost all of the declines suffered in March. President Donald Trump said over the weekend that the US will begin guiding some neutral ships trapped in the Persian Gulf out through the Strait of Hormuz starting Monday.

Asia has emerged as a key pillar of the AI boom, combining its dominance in semiconductor manufacturing with rapidly scaling data infrastructure. At the heart of it are three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co., the world’s largest chip foundry, and South Korea’s leading memory makers Samsung Electronics Co. and SK Hynix Inc.

Shares of SK Hynix soared nearly 13% on Monday while TSMC’s jumped 6.6%. Samsung’s stock jumped more than 5%. A gauge of Chinese tech shares listed in Hong Kong climbed as much as 3.7%.

Markets like South Korea are currently performing well because of this AI-driven trade or hype, Dilin Wu, a research strategist at Pepperstone Group, said in a Bloomberg TV interview. “I would be cautiously optimistic on the Asian market in general,” as the geopolitical uncertainty and high oil prices may be a constraint to equities, she said.

Meanwhile, the MSCI Asia Pacific excluding Japan Index already hit a record, rising as much as 3.1% on Monday. Markets in mainland China and Japan were among those shut for holidays.

Sectors to Watch

Chinese property developers jumped in Hong Kong on optimism that home sales are recovering on the back of local government incentives. Shares of Henderson Land and Link REIT gain as much as 6% and 2.7%, respectively, after Morgan Stanley upgrades them to overweight from equal-weight on Hong Kong’s property market recovery broadening beyond the residential sector. China’s electric vehicle makers rise after reporting robust wholesales data in April thanks to resilient overseas demand. BYD’s domestic and export volumes topped consensus projections, according to analysts.

Story Continues

Markets at a Glance

MSCI Asia Pacific Index rose 2.3% Hong Kong’s Hang Seng Index rose 1.5%; Hong Kong’s Hang Seng China Enterprises Index rose 1.4% Taiwan’s Taiex Index rose 4.6% South Korea’s Kospi Index rose 5.1%; South Korea’s Kospi 200 Index rose 5.8% Australia’s S&P/ASX 200 Index fell 0.4%; New Zealand’s S&P/NZX 50 Gross Index rose 0.4% India’s NSE Nifty 50 Index rose 0.9% Singapore’s Straits Times Index rose 0.7%; Malaysia’s KLCI Index rose 0.5%; Philippines’s PSEi Index rose 1.5%; Indonesia’s JCI Index was little changed; Vietnam’s VN Index was little changed Bloomberg Dollar Index fell 0.1% West Texas Intermediate crude fell 0.3% to $102 a barrel Euro rose 0.1%

Here Are the Most Notable Movers

Shares of MiniMax jumps after Goldman upgrades the stock to buy from neutral, citing stronger revenue prospects driven by an expected new model launch, and recommends investors buy the latest pullback. MediaTek shares soar to a record in Taipei trading after the chipmaker posted first-quarter net income that beat the average analyst estimate, with its AI ASIC revenue guidance lifting optimism. National Australia Bank shares drop as much as 4% to the lowest since Aug. 13, after the Australian lender reported cash profit for the first half-year that missed the average analyst estimate.

Related Market News

Taking Stock: The list of Asian stocks that benefit from business partnership with Nvidia Corp. is getting longer, as the region further integrates into the AI chip giant’s business ecosystem. Global Wrap: Asian shares rallied to near a record as optimism around the artificial intelligence trade and stronger-than-expected earnings from megacap tech companies propelled benchmarks in South Korea and Taiwan to all-time highs. The yen gained.

This story was produced with the assistance of Bloomberg Automation.

(Updates to add MSCI Asia Pacific Index hit record high.)

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