Asian stocks were set for gains on Tuesday after a strong Wall Street session as easing lockdown restrictions by some countries and US states buoyed sentiment, despite another decline in oil prices.

While some investors believe the worst may soon be over for the world economy, Commonwealth Bank of Australia said there were still plenty of reasons to be cautious.

“We are less optimistic and expect a slower recovery in the world economy,” the bank said.

“The risk of reintroducing restrictions is a risk to market participants’ optimistic outlook for a quick resumption of normal economic activity.”

The Nikkei 225 futures were up 3.05 per cent from the cash contract’s close on Monday. The Nikkei 225 index closed down 0.86 per cent at 19,262 in the pre0vious session.

Australian S&P/ASX 200 futures were up 0.09 per cent and Hong Kong’s Hang Seng index futures were up 0.54 per cent.

All three major US stock averages advanced, and are all now within 20 per cent of their record closing highs reached in February.

The benchmark S&P 500 is on track for its best month since 1987, after trillions of stimulus dollars helped US equities claw back much of the ground lost since the coronavirus crisis brought the economy to a grinding halt.

But some analysts believe gains may be limited unless there is progress in finding treatments for the disease.

The US dollar slipped as risk-prone traders cheered lockdown news even as health experts warned that not enough coronavirus testing was in place in the United States.

From Italy to New Zealand, governments announced the easing of restrictions, while Britain said it was too early to relax them there. New York state will not reopen for weeks, at the soonest..

On Wall Street, the Dow Jones Industrial Average rose 1.51 per cent, the S&P 500 gained 1.47 per cent and the Nasdaq Composite added 1.11 per cent.

The pan-European STOXX 600 index rose 1.77 per cent and MSCI’s gauge of stocks across the globe gained 1.76 per cent.

Oil prices weakened sharply on continued concerns about oversupply and a lack of storage space. The front-month contract was trading at lower-than-usual volumes on Monday as traders moved to later months in futures contracts.

US crude fell 23.55 per cent to $12.95 per barrel and Brent was at $20.07, down 6.39 per cent on the day.

The US dollar dropped as the broader upbeat mood encouraged investors to move into other currencies.

The dollar index fell 0.17 per cent, with the euro up 0.05 per cent to $1.0825.

The Japanese yen strengthened 0.26 per cent versus the greenback at 107.30 per dollar, while sterling was last trading at $1.2421, up 0.44 per cent on the day.

Bucking the trend, the Brazilian real was on track to close at a record low against the greenback.

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