Asia markets mostly fell on Monday following heightened geopolitical tensions in the Middle East.
Japanese shares returned for their first day of trade with the benchmark Nikkei 225 declining 1.91% to close at 23,204.86 while the Topix index fell 1.39% to 1,697.49. In South Korea, the Kospi index fell 0.98% to 2,155.07.
Hong Kong's Hang Seng index was down 1.11% in afternoon trade. Chinese mainland markets mostly bucked the downward trend by the close: The Shanghai composite eased morning gains to trade near flat at 3,083.41. The Shenzhen composite rose 0.44% to 1,768.68 and the Shenzhen component was up 0.39% to 10,698.27.
In Australia, the ASX 200 finished near flat, with the heavily weighted financials subindex retracing some of its earlier losses to trade down 0.58% as shares of major banks in the country declined. But, the energy sector rose 1.27%.
Global tensions elevated late last week after Iran's top military commander was killed in a U.S. airstrike in Baghdad, which raised concerns of retaliation from Iranian forces. The Iranian regime said Sunday that it would no longer abide by uranium enrichment limits established in the 2015 nuclear deal, which the U.S. unilaterally withdrew from in 2018.
On Sunday, Trump threatened to slap sanctions on Iraq after its parliament passed a resolution calling for the government to expel foreign troops from the country, following the U.S. airstrike carried out on its soil.
Futures pointed to a lower open in the U.S. — the implied open for the Dow Jones Industrial Average was down 130.88 points as of 2:00 a.m. ET.
Oil prices surged 3% on Friday on worries that potential conflict between the U.S. and Iran could disrupt energy production in the region.
"Geopolitical tensions look like remaining elevated in coming days, so lending support to oil prices and keeping risk asset markets on the defensive, including 'growth' currencies," Ray Attrill, head of foreign-exchange strategy at the National Australia Bank, wrote in a morning note.
Elsewhere, Australia has been grappling with a devastating fire season that's expected to worsen as the summer months continue. Wildfires have killed at least 18 people so far, destroyed more than 1,000 homes and nine million acres. Nearly half a billion animals in the state of New South Wales are said to have been killed by the blazes in the last few months and the death toll is expected to rise.
One expert predicted that the bushfires could be a 'big drag' on Australia's growth.
In the currency market, the U.S. dollar traded near flat against a basket of currencies. The dollar index was around 96.869, dipping from an earlier high of 96.897.
Gold prices also jumped, with spot gold trading up 1.47% to $1,574.18 an ounce.