Tech rally boosts Asian stocks, dollar firms

Technology stocks have powered Asian markets higher as lower oil prices lifted sentiment and investors pinned their hopes on US-Iran talks, while the dollar stood tall on bets that more hikes are needed to rein in inflation.

Attention is also turning to a high-stakes meeting between Donald Trump and Xi Jinping later this week, with investors watching for signs the leaders of the world's two largest economies can prevent a further deterioration in relations.

Xi arrives in Washington on Wednesday for the first time in more than a decade amid growing optimism that a trade truce deal between the two nations will be extended and potential cooperation over artificial intelligence.

Brent crude futures steadied at $US100.22 ($A140.68) per barrel after dropping over three per cent in the previous session, moving below the key $US100 level briefly.

President Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the UN General Assembly, helping lift sentiment and pushing bond yields lower.

"The drop in oil is a big factor," said Nick Twidale, chief market strategist at ATFX Global.

"Oil is the main driver and investors are jumping back into AI as has been the pattern this year."

MSCI's broadest index of Asia-Pacific shares outside Japan rose over 1 per cent in early trading. Tech-heavy South Korean stocks jumped nearly two per cent while Taiwan shares were 1.3 per cent higher. Japan markets are closed on Tuesday.

Nasdaq futures rose 0.37 per cent while European futures were 0.3 per cent higher. Much of the AI enthusiasm has been centred on the strong reception to the launch of Meta's Muse AI assistant.

China's blue-chip stock index rose 0.75 per cent, while Hong Kong's Hang Seng index gained 0.4 per cent. AI stocks in China and Hong Kong also surged.

"The excitement around Meta Muse is adding weight to the idea that millions of people could eventually use persistent AI agents," said Chris Weston, head of research at Pepperstone.

"The combination of Meta Muse injecting a new shot of confidence in the CPU demand profile, lower crude prices, falling Treasury yields and optimism towards the US-China summit have supported the move."

Investors are also contending with a fresh wave of rate hikes and hawkish signals from major central banks, reinforcing expectations of further tightening later this year. The shift has underpinned the dollar and piled pressure on the yen.

The yen was at 157.39 per US dollar, hovering near a three-week low after surrendering early-month gains driven by bets on a faster pace of Bank of Japan rate hikes.