* Dollar at one-year highs, keeps yen near intervention zone

* Oil prices rise on peace deal uncertainty

* U.S. rate-hike odds keep dollar supported

* Tech valuation worries linger

(Updates to Asia late morning)

By Ankur Banerjee

SINGAPORE, June 29 (Reuters) - Asian stocks wobbled on

Monday after Iran and the United States agreed to halt renewed

hostilities that had cast a shadow over an interim peace deal

and kept oil prices supported, while the dollar stood tall near

a one-year high on rate-hike bets.

A return to diplomacy in the Middle East would follow

several days of tit-for-tat strikes since an Iranian projectile

hit a cargo vessel in the Strait of Hormuz last week, with both

sides accusing each other of breaking an interim ceasefire.

Futures for S&P 500 and Nasdaq gained 0.4%

while European futures rose 0.2%. South Korea's KOSPI

fell nearly 2%, while Japan's Nikkei slipped 1%,

leaving MSCI's broadest index of Asia-Pacific shares

down 0.4%.

"It feels like we are lacking a bit of direction," said

Nick Twidale, chief market strategist at ATFX Global in Sydney.

"We may get a shot in the arm later today from more positive

news out of the Middle East... but at the moment I think it's

going to be a bit of a flow-driven day without major moves to

either side," Twidale said.

Worries over the future of the peace deal lifted oil prices,

which have given up almost all of their war-driven gains as

markets quickly reprice the prospect of easing supply.

On Monday, Brent crude futures climbed 0.85% to

$72.6 a barrel while U.S. West Texas Intermediate crude

rose over 1% to $70.01 a barrel.

The 14-point interim peace accord agreed on June 17 was

meant to halt the fighting, which the U.S. and Israel started on

February 28, and reopen the critical strait while talks

proceeded on issues such as Iran's nuclear programme.

"Markets enter July with a ceasefire that nobody quite

trusts," said Marc Chandler, chief market strategist at

Bannockburn Capital Markets.

TECH WORRIES LINGER

Investors have also been battling concerns that valuations

for AI-related firms have become stretched following years of

gains, with Micron's strong earnings forecast and Apple's price

hikes last week underscoring the contrasting challenges.

Markets are undergoing a tactical rotation away from

mega-cap AI into smaller, more cyclical segments, marking early

signs of broadening after extreme concentration, strategists at

BofA Global Research said in a note.

The Bank for International ‌Settlements cautioned over the

durability of the current AI investment surge, noting supply

bottlenecks and intense competition could spur the kind of

overinvestment seen in previous boom-and-bust cycles.

Jose Torres, senior economist at Interactive Brokers, said

the rising costs tied to modern infrastructure have firms

scrambling for cash on their balance sheets and adding to risks

if those investments fail to deliver.

"For this reason, traders have gravitated toward the

defensive and cyclically oriented areas of the equity space in

recent weeks," Torres said.

RISING RATE HIKE WAGERS

Easing oil prices may help reduce some inflation pressure

but elevated prices are likely to keep the U.S. Federal Reserve

under pressure to raise rates. Investors are pricing in at least

one hike this year, a sharp reversal from expectations of two

rate cuts before the conflict began.

BofA strategists anticipate three hikes, a more hawkish view

that reflects a firmer labour backdrop, the new Fed Chair Kevin

Warsh and a persistent inflation problem.

Rising odds of a rate hike have lifted the dollar. The

dollar index, which measures the U.S. currency against

six other units, was at 101.33, just below the one-year high it

touched last week.

The Japanese yen was languishing at 161.77 per U.S.

dollar as fears of another bout of intervention from Tokyo kept

the fragile currency from breaking through its lowest in 40

years.

The rising dollar has weighed on gold, which was down

0.4% at $4,072 per ounce. The yellow metal is set for a 13%

decline in the second quarter, its biggest quarterly drop since

2013.