Markets in Asia closed mostly lower on Monday following an attack in central London over the weekend and as oil prices gained sharply after four countries snapped diplomatic ties with Qatar.
Oil prices rose on the back of news that Saudi Arabia, Bahrain, the United Arab Emirates and Egypt had severed diplomatic ties with Qatar. Saudi Arabia said it had cut ties with Qatar due to reasons related to terrorism, Reuters reported.
Natural gas futures for July also rose by 1.13 percent to $3.032 per million British thermal units. Qatar is one of the world's largest producers of natural gas.
In the weekend incident in London, attackers first drove into pedestrians on London Bridge, then headed to Borough Market before being shot by police. At least seven were killed following the attack. Twelve individuals have already been arrested, the Metropolitan Police said.
The impact of the most recent London attack, however, is likely to have a "very limited" on the markets, JPMorgan Asset Management's Chief Asia Market Strategist Tai Hui told CNBC.
"If you look at various attacks in the past six to nine months in Europe or other parts of the world, their impact or the impression on the market tends to be very limited, if at all," Tai said.
"Obviously, if that does steer towards a change in the political landscape in the U.K. for the election this week ... (in the) next several quarters, obviously that might have a marginal market impact," he added.
The British pound traded as low as $1.2845 compared to levels around $1.2879 seen before the weekend. Cable traded at $1.2874 at 2:25 p.m. HK/SIN.
The attack over the weekend would mostly have a "minimal" impact on the pound's trajectory, Nomura G10 FX Strategist Peter Dragicevich told CNBC.
"I think the bigger focus is obviously the election on Thursday in the U.K. There is still a lot of uncertainty around which party will win. The polls do still suggest a majority for the Conservatives, but clearly the probability has declined with the narrowing in the polls," Dragicevich said.
In Asia, the Nikkei 225 was marginally lower, closing down 0.03 percent or 6.46 points at 20,170.82. South Korea's benchmark Kospi index finished the session 0.13 percent or 3.1 points down at 2,368.62.
The ASX 200 shed 0.57 percent or 33.214 points to close at 5,754.9, driven largely by weakness in major financial stocks.
Markets in China were mixed despite the positive read from the May Caixin services PMI, with the Hang Seng Index down 0.41 percent at 3:00 p.m. HK/SIN. The Shanghai Composite closed 0.45 percent or 14.0138 points down at 3,091.5262 while the Shenzhen Composite finished higher by 0.689 percent or 12.3292 points at 1,800.9325.
The Caixin services PMI came in at 52.8, compared to the 51.5 figure seen last month. This month's services PMI reflected that growth in the sector grew the quickest in four months.
New Zealand markets are closed for a holiday.
Shares of Japanese automakers were mostly lower on the strength of the yen, with Toyota falling 2.04 percent to close at 5,968 yen a stock. The company had announced over the weekend it had sold its shares in Tesla after the end of a partnership to develop electric cars.
The dollar index, which measures the dollar against a basket of currencies, ticked slightly higher after falling to a seven-month low last Friday. The dollar index was at 96.792 at 2:25 p.m. HK/SIN.
"The dollar remains weak, and there will be few catalysts to reverse this until the Federal Open Market Committee (FOMC) meeting next week," Jo Masters, an economist at ANZ, said in a Monday morning note.
The greenback gained slightly against the yen after falling last Friday, with dollar/yen trading at 110.60 yen.
Meanwhile, demand for safe-haven assets rose. Gold traded at its highest levels in around six weeks earlier in the session. Spot gold prices stood at $1,279.22 at 2:30 p.m. HK/SIN.