Emerging-market equities surged to a two-month high Monday as a technology rally offset concerns over rising oil prices. MSCI's gauge for developing-nation equities climbed as much as 1.4% to its highest level since June 26. South Korea's benchmark Kospi index jumped more than 3%, leading gains across the region. An index for EM currencies rose 0.1%, extending advances to 12 of the last 13 sessions.

Technology was the top-performing sector, tracking Friday's gains in US chip stocks after Open AI announced the release of GPT-6, positioned as a milestone toward artificial general intelligence. The sector strength overshadowed a drag from higher crude prices, which rose after the US and Iran exchanged attacks involving tankers in the Strait of Hormuz. Strong US jobs data also raised bets on Federal Reserve rate hikes.

"The strong Friday rally of tech sectors lifted the regional mood led by the Kospi, the Taiwan Stock Exchange and the Nikkei," said Wee Khoon Chong, senior market strategist for Asia Pacific at BNY in Hong Kong. Meanwhile, trading desks at Barclays Plc and UBS Group AG report rising client demand for bullish options and swap contracts tied to China's CSI indexes as investors diversify beyond crowded AI trades in Korea and Japan. South Korea's won advanced to its strongest level in nearly two years, while currencies of oil importers Indonesia and the Philippines weakened.