Hopes of an easing in global trade tensions are set to propel shares higher when trading resumes on the Australian Securities Exchange (ASX) on Tuesday.
Stocks in New York surged on Monday night (Tuesday AEST) after the United States and China agreed to temporarily slash tariffs, reinvigorating an Australian share market that had closed virtually flat on Monday.
Washington said it would cut tariffs on Chinese imports to 30% from 145%, while Beijing said it would reduce duties on U.S. imports to 10% from 125%.
At 8:30 am AEST (10:30 pm GMT Monday) the S&P/ASX 200 June share price index contract was quoted 97 points (1.17%) higher than the previous settlement close of 8,364 points.
Optimism about a potential de-escalation of the international tariff war ignited a rally on Wall Street that pushed up the Dow Jones Industrial Average by 2.8%, the S&P 500 by 3.3% and the Nasdaq Composite by 4.4%.
“It's a relief rally because there was a lot of anxiety and angst about tariffs between the U.S. and China," Paleo Leon Managing Director John Praveen was quoted by Reuters as saying.
The Australian sharemarket ended virtually flat on Monday with the S&P/ASX 200 index adding only 2.30 points to 8,233.5 with energy stocks performing well.
However those gains may be reversed today as crude oil prices fell overnight.
In Australia today, consumer and business confidence survey results will be published, Life360 (ASX: 360) releases its earnings and ANZ Group (ASX: ANZ) shares will trade ex-dividend, CommSec said.
Other stocks to watch are gold companies which may come under pressure due to a drop in the precious metal price overnight.
On fixed interest markets, Australian government bond yields followed U.S. bond yields higher, with 10-year rates adding 0.81% to 4.461% and two-year rates adding 1.14% to 3.558%.
