Investing.com - Asian-Pacific shares are expected to open with gains on Tuesday, following a positive performance from Wall Street where all three major indices closed higher.
By 10:00am AEST (12:00am GMT) the S&P/ASX 200 added 1% while Nikkei 225 Futures were up 0.4%, reflecting investor optimism that the Israel-Hamas conflict will not significantly impact the global economy.
Despite tensions in the Middle East, investors are showing relief that the situation hasn't escalated into a more severe geopolitical crisis. This sentiment is a shift from last Friday when investors sought safety in certain assets to hedge against potential shocks over the weekend.
The Nasdaq Composite, heavily loaded with tech stocks, recovered from a 1.2% fall on Friday, gaining the same percentage back. The S&P 500 and the Dow Jones Industrial Average also saw increases of 1.1% and 0.9% respectively.
In contrast, Monday was more challenging for assets such as gold and US Treasury bonds, which had rallied on Friday. Brent crude oil dropped by 0.8% to US$90.13 a barrel, and gold prices also fell to US$1,920.20.
In the bond markets, the yield on Australian 2-year government bonds rose to 4.097%, while the 10-year yield remained lifted to 4.522%. US Treasury notes saw an increase, with the 2-year yield at 5.10% and the 10-year yield at 4.714%.
The Australian dollar and Korean Won remained steady while the Thai Baht, Vietnamese Dong and Indonesian Rupiah experienced slight declines. The US Dollar Index was stable at 106.04.
In China, stocks closed lower as semiconductor shares took a hit following a Bloomberg report suggesting the US could further restrict China's access to advanced chip technology. Concerns about the economy also lingered, with a lack of a convincing plan to offset the persistent drag from the property sector and facing mounting challenges from credit constraints, falling confidence, and capital outflows.
Hong Kong shares also closed lower, primarily pulled down by consumer and tech stocks. Investors are cautiously awaiting key China economic data due on Wednesday, including GDP and industrial output.
Japanese stocks ended lower, primarily due to declines in electronics and tech stocks, amid concerns about a potential escalation of the conflict in the Middle East. Indian shares also closed slightly lower, primarily dragged down by bank stocks.
In Europe, the Stoxx Europe 600, DAX, and CAC 40 all advanced, and most other European indices also saw an uptick. The FTSE 100 index closed up 0.4%, with the absence of an escalation of tensions in the Middle East leaving investors cautiously optimistic.