The US said it would extend a reprieve that permits China's Huawei Technologies to buy components from US companies, in a sign of a slight softening of the trade war between both countries.
A rally in equity markets worldwide from growing expectations that global economies would take action to counteract slowing growth also supported oil prices, which often follow stocks, Reuters reported, adding, traders were also watching for signs of tension in the Middle East after the US called the release of an Iranian tanker unfortunate and warned Greece and Mediterranean ports against helping the vessel.
Middle East stocks
Saudi Arabian banking shares rose on Monday amid rising oil prices and lifted its stock market. Other Middle Eastern bourses in the region were mixed.
Saudi Arabia's index rose 0.5 percent with Al Rajhi Bank adding 0.8 percent and Saudi Telecom increasing 2.4 percent.
In Abu Dhabi, the index fell for the second consecutive day to close 0.2 percent down as First Abu Dhabi Bank declined 0.4 percent and Emirates Telecommunications Group lost 0.5 percent.
Dubai's index reversed course to close 0.2 percent down as Emaar Properties and its unit Emaar Malls dropped 0.8 percent and 2.1 percent respectively.
Qatar's index closed 0.2 percent up extending gains in the previous session when it ended a three-day losing streak.
In Egypt, the blue-chip index fell 0.7 percent with Commercial International Bank losing 0.5 percent.
Asian shares extended their gains on Tuesday as hopes for stimulus in major economies eased fears about a global recession, boosting riskier assets and drawing money from safe-havens such as bonds and gold.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.31 percent, while Japan's Nikkei rose 0.45 percent. The improved mood was helped by a rally on Wall Street overnight, with the S&P 500 gaining 1.21 percent.
US stock futures were a shade lower in Asian trading, down 0.14 percent. Elsewhere, Australia's S&P/ASX 200 rose 0.69 percent, while South Korea's KOSPI index rose 0.24 percent.
Shares in China and Hong Kong opened lower and swung in and out of negative territory after China lowered its lending reference rate only slightly.
Gold prices were steady on Tuesday after posting their biggest daily decline in a month in the previous session, plummeting below $1,500 an ounce.
Spot gold edged up 0.1 percent at $1,496.80 per ounce at 0050 GMT. On Monday, gold skidded 1.2 percent to reach $1,495 an ounce, below the key level of $1,500. This marked its biggest daily decline since July 19.
Elsewhere, silver dipped 1 percent to $16.91 per ounce. Platinum rose 1 percent to $852.61 an ounce, while palladium gained 2.2 percent to $1,479.86.
The dollar held near a three-week high on Tuesday on stimulus hopes from global economies and as an improvement in appetite for riskier assets lifted yields on US government bonds.
Yields on benchmark US Treasuries pulled away from three-year lows as investors moved back into riskier assets, mainly due to hopes for stimulus in major economies such as Germany and China, which eased more recent global recession fears.
"The dollar is higher across the board, tracking the rebound in yields. The prospect of Germany embarking on stimulus was the turning point and the dollar has regained momentum since," Reuters quoted Yukio Ishizuki, senior currency strategist at Daiwa Securities as saying.
The euro was flat at $1.1081, caught near a two-week trough of $1.1066 set on Friday.
The Australian dollar dipped 0.1 percent to $0.6757 against the broadly higher dollar.
(Writing by Seban Scaria; editing by Mily Chakrabarty)
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