Australian shares are set to rise on Tuesday as investor optimism over trade that has helped support equities extends to perceptions about the latest Middle East conflict.
A tiny gain is in prospect, based on futures trading on the Australian Securities Exchange (ASX), following a rally on Wall Street overnight.
The S&P/ASX 200 share price index June contract last traded five points above the previous settlement at 8,565 points, at the time of writing.
United States stocks benefitted from a fall in oil prices which helped to allay worries that more expensive energy would rekindle inflation.
The oil market assessed that Israel and Iran's attacks had not affected crude production and exports.
The Dow Jones Industrial Average finished 0.8% higher, the S&P 500 put up 0.9% and the Nasdaq Composite climbed 1.5% on Monday (Tuesday AEST).
Oil prices surged more than 7%, the largest increase in three years, on Friday after Israel bombed Iran. However, it pulled back on hopes of a truce between the two nations.
The Australian market closed flat on Monday pending developments in the Middle East. The S&P/ASX 200 Index adding just one point to 8,548.4.
Energy led the six ASX sectors that gained. Santos (ASX: STO) soared after it received and agreed to an A$29 billion bid from a consortium led by Abu Dhabi’s state-owned ADNOC and private equity firm Carlyle Group.
In fixed interest, Australian bond yields reversed their previous spike with 10-year rates easing 0.23% to 4.248% and two-year rates falling 0.631% to 3.311%.
