Prices are primed to rebound from a sharp sell-off when the Australian sharemarket reopens on Tuesday, with futures trading pointing to a 2.14% increase in the benchmark index.
This is based on the March contract of the ASX 200 index, trading 184 points over the previous settlement at 8,751 points at the time of writing.
The pre-conditions for a strong start were set in the United States overnight when the three main Wall Street benchmarks rebounded from earlier losses in a volatile session as oil prices fell after U.S. President Donald Trump claimed the conflict with Iran may be ending.
The Dow Jones Industrial Average added 0.5%, the S&P 500 rose 0.8%, and the Nasdaq Composite soared 1.4% in a late rebound on Monday (Tuesday AEDT) after Trump said the 10-day war was "very far ahead" of his initial four-to-five-week estimated time frame.
Crude prices fell after sources said the Trump administration was considering easing oil sanctions against Russia.
CFRA Research Chief Investment Strategist Sam Stovall said the length of the war and the closure of the Strait of Hormuz, an important oil transport route, were unclear.
"Again today, seeing such a relative reversal in price movements indicates that investors are looking for any opportunity to jump back into the equity markets," he was quoted in a Reuters story as saying.
The ASX 200 had closed sharply lower on Monday, diving 2.85% to a 50-day low of 8,599.00 points and bringing the losses over the last five days to 6.54%, as rising oil prices and the escalating Middle East conflict triggered a broad sell-off.
In fixed interest markets, Australian Government bond yields fell, with two-year rates down 0.61% to 4.370% and 10 year rates off by 0.31% to 4.84%.
