ASX futures had dipped 12 points or 0.1% to 7271 at 8.00 am on Tuesday, indicating a slight dip at the opening.

Futures on the S&P 500 rose 0.6 percent at noon New York time (2am AEST). The US stock market is set to reopen Tuesday.

World markets rallied on the prospect of some easing of Covid-19 restrictions in China.

Japan’s Nikkei 225 jumped 2.2 percent, the Shanghai Composite Index gained 0.6 percent, European stocks added 0.6 percent and London’s FTSE inched up 0.2 percent.

On Saturday, Wu Qing, one of Shanghai’s vice mayors, said that this week authorities will relax the conditions under which companies can resume work, and the city’s government has released a 50-point plan for speeding up the economic recovery. Among them are business tax cuts and subsidies for electric vehicle purchases, the official Xinhua News Agency said.

Locally, the S&P/ASX 200 finished 1.4% higher at 7286.6, its biggest gain in more than two weeks on near universal gains.

The benchmark extended the momentum laid down on Friday from US stocks, jumping at the open and then grinding higher to close at its session high. It’s the first time in a month that the ASX 200 has rallied more than 1 per cent in back-to-back sessions.

Xero, Megaport and Block jumped between 5.2% and 11% to top the advances in tech stocks.

The materials sector gained 2.2% on the back of advances in iron-ore, gold and lithium miners. Energy faced the biggest loss on the ASX 200, down 1.8% to its lowest close since Feb. 17, while the only sector to drop was utilities, which fell 0.7% as AGL canceled its planned demerger and lost 1.7%.

Commodity markets climbed with China loosening lockdowns, with Brent crude oil up 1.9 per cent at US$121.67 a barrel. Iron ore rose 1.6% to US$136.60. Gold rose 0.1% to US$1859.30.

Shifting to local bond markets, Australian 2 Year government bond yields fell 2.35% and the 10 Year was flat at 3.25%. US bonds markets were closed due to a public holiday.

The Australian dollar was up 0.3% at 71.95 US cents at 7.00 am on Tuesday, from previous close of 71.58 US cents. The Wall Street Journal Dollar Index, which measures the US dollar against 16 other currencies was lower at 94.10.

Asia

Chinese stocks gained, buoyed by better sentiment after Shanghai authorities announced plans to relax some Covid restrictions, along with measures to aid an economic recovery. Recent positive earnings from big Chinese tech names also partly lifted sentiment, as they helped alleviate concerns over the economic toll of lockdowns, said UOB analysts in a note. Focus will be on China’s official May PMI surveys later in the week, UOB added. The Shanghai Composite Index added 0.6% to 3149.06, the Shenzhen Composite Index gained 1.1% to 1975.89 and the ChiNext Price Index climbed 1.2% to 2350.38. Aviation stocks jumped, with China Southern Airlines (601111.SS) up 2.4% and Air China (601111.SS) up 1.6%.

Hong Kong shares up; benchmark Hang Seng Index up 1.2% to 20951.86, helped by fresh stimulus from Beijing. Consumer stocks are also higher, and financial assistance for companies like tax relates and rent reductions are expected to help ease concerns around Covid-19, according to IG market strategist Yeap Jun Rong, who noted that daily Covid-19 infection numbers in Shanghai and Beijing were lower over the weekend. As it is, Yeap points out that the HSI has been trading within a range since April, with resistance for the index at 21200. Li Ning rises 8.2%, while Haidilao and China Resources Beer add 6.1% and 5.3%, respectively.

Japanese shares finished higher, spearheaded by gains in electronics shares as US inflation and higher borrowing costs fears abated. Medical-equipment manufacturer Sysmex rose 9.1% and air-conditioner maker Daikin Industries gained 6.5%. The Nikkei Stock Average added 2.2% to 27369.43.

Europe

European markets advanced as investors looked to economic events later in the week. The pan-European Stoxx Europe 600 added 0.6 percent, the French CAC 40 and the German DAX gained 0.8 percent.

“Early morning gains have faded as the day goes on, with investors unable to find a reason to move equities higher,” IG analyst Chris Beauchamp says in a note. “Tomorrow all eyes will be on the US to see if Wall Street can inject some fresh impetus into the bounce, or if the pre-non farm payroll jitters will arrive early.”

London’s FTSE 100 rose 0.2 percent on Monday but losses for some of its biggest companies weighed on gains in the rest of the index, which ended the day lagging behind markets in mainland Europe.

Pharma heavyweights AstraZeneca and GSK shed 1.1% and 0.3% respectively, British American Tobacco dropped 2.7% and lender HSBC ended 0.7% lower.

On the plus side, the biggest winners were engineering group Melrose, fashion retailer JD Sports and copper producer Antofagasta.

“European markets have got off to a positive start this week, aided by a strong Asia session after the Shanghai authorities said that businesses could begin to reopen from June 1, as Omicron case numbers continue to decline,” Michael Hewson of CMC Markets UK said in a note.

North America

US stock markets were closed for a public holiday.