Asian shares led a global rally on Tuesday on optimism about an easing of China's crackdowns on tech and COVID-19, but concerns about rising prices worldwide set a nervy tone in markets as investors wait for more signals from policymakers.

European shares followed the positive start in Asia, with the STOXX index of Europe's 600 biggest stocks up 0.62% and U.S. stock futures, S&P 500 e-minis, suggesting Wall Street would follow suit.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 1.5% on Tuesday, but the index is still down 6.4% so far this month.

"There was a good session in Asia and, taking the S&P 500 as a guide, the U.S. looks set to be up around 1%...but looking ahead markets remain fixated on inflation and rate hikes," said Philip Shaw, Chief Economist at Investec in London.

"Headlines are focused on higher inflation pressures either directly stemming from the Ukraine conflict, or supply chain shortages partly coming out of the lockdowns in China," he said.

Hopes that the latter might ease had set the positive mood in shares early on Tuesday.

Shanghai achieved the long-awaited milestone of three straight days with no new COVID-19 cases outside quarantine zones, which could lead to the beginning of the lifting of restrictions.

Meanwhile Chinese Vice-Premier Liu He is scheduled to speak at a Tuesday meeting with tech executives aiming to promote the development of the digital economy, people familiar with the matter told Reuters.

The meeting is being closely watched for remarks by Liu and others for clues as to how far Chinese authorities will go in easing a regulatory crackdown since late 2020 on the previously high-flying tech sector.

In Tokyo, the Nikkei rose 0.33% in afternoon trade, while in Australia the S&P/ASX200 index gained 0.25%.

Mainland China's CSI300 Index gained 0.95% while Hong Kong's Hang Seng Index was 2.35% higher, as tech firms listed in the city jumped more than 4% on hopes of Beijing's crackdown on the sector being relaxed.

GROWTH FEARS

Despite the mild recovery in stocks, however, there were nervy signs elsewhere as economic growth fears in the world's two largest economies have re-emerged following weak retail sales and factory production figures in China and disappointing U.S. manufacturing data..

The New York Fed's Empire State manufacturing index published on Monday showed an abrupt fall during May and shipments fell at their fastest pace since the beginning of the pandemic.

The yield on benchmark 10-year Treasury notes rose to 2.9203% compared with its Monday U.S. close of 2.879%, while two-year yields, which rise with traders' expectations of higher Fed fund rates, edged up to 2.6153%.

Investors will look to a slew of central bank policymakers speaking on Tuesday for further signs of the timing of rate hikes to combat inflation.

Those slated to speak include U.S. Federal Reserve chair Jerome Powell at 1800 GMT, European Central Bank President Christine Lagarde, and Bank of England Deputy Governor Jon Cunliffe.

Futures markets are pricing consecutive 50 basis point hikes in June and July and for the benchmark U.S. interest rate to reach 2.75% by year end. However there are growing expectations that other central banks will catch up.

The U.S. dollar index, which tracks the greenback against a basket of currencies, fell 0.23% to 103.9 as investors cashed out and trimmed bets on U.S. rate hikes driving further gains.

The European single currency was up 0.3% on the day at $1.046, having lost 0.96% in a month.

Investors likewise took profits from a recent rally in oil, sending prices lower on Tuesday after Hungary resisted a European Union push for a ban on Russian oil imports, a move that would tighten global supply.

U.S. crude dipped 0.36% to $113.79 a barrel. Brent crude fell to $114.12.

Gold prices firmed, as the pullback in the dollar supported demand for greenback-priced bullion and countered pressure from the recovery in U.S. Treasury yields. Spot gold traded up 0.1% at $1,825.44 per ounce.

(Additional reporting by Scott Murdoch in Hong Kong; Editing by Lincoln Feast, Kirsten Donovan)