Australian shares are expected to open higher on Wednesday as optimism around renewed United States-Iran diplomacy supported investor sentiment, despite reports of fresh strikes, while markets turned their attention to the latest domestic inflation figures.
S&P/ASX 200 futures were up 74 points, or 0.8%, to 8,980 ahead of the open.
Oil prices extended their recent decline amid hopes that the United States and Iran are making progress towards a renewed peace agreement, despite reports of continued strikes in the region.
Overnight, U.S. markets finished mixed as investors prepared for a key week of technology earnings and the Federal Reserve's latest interest rate decision.
The Dow Jones Industrial Average gained 1%, the S&P 500 advanced 0.2%, while the Nasdaq Composite slipped 0.2%.
Apple reached another milestone on Wall Street, becoming the second publicly traded company to surpass a US$5 trillion intraday market capitalisation.
Domestically, the Australian sharemarket recovered from early losses on Tuesday to finish higher, supported by gains across consumer discretionary, communication services and energy stocks.
The S&P/ASX 200 Index rose 53.8 points, or 0.6%, to close at 8,947.8, with nine of the benchmark's 11 sectors ending in positive territory.
Investors will focus on a busy corporate earnings calendar during Wednesday's session, with results due from Rio Tinto, Atlas Arteria, Mineral Resources, Northern Star Resources and Nickel Industries.
The market's main domestic focus will be the release of June consumer price index (CPI) data at 11:30 am AEST, with headline inflation expected to remain steady at 4%.
On the bond markets, Australia's 10-year government yield increased 0.1% to 4.972%, while the 2-year yield declined 0.1% to 4.605%.
