Washington has rekindled trade talks with Beijing, boosting sentiment along with growing investors confidence that the Federal Reserve will cut interest rates this year.
The flow-on effects have been felt worldwide, with most of the major markets experiencing growth.
US President Donald Trump on Tuesday said he would meet with Chinese President Xi Jinping at the G20 summit later this month and said talks between the two countries would restart after a recent lull.
Off Trump’s statement, trade-sensitive industrials were up by 1.9 per cent and technology stocks gained 1.7 per cent — combining for the biggest boost in the S&P 500 stocks.
The US–China trade war and its impact on economic growth have investors increasingly expecting the Federal Reserve will cut rates to preserve the US economic expansion.
Chinese stocks inch higher on Tuesday in thin trade as markets were cautious ahead of the US Federal Reserve’s two-day policy meeting.
Hong Kong stocks closed higher on Tuesday, extending a rally from the previous session, aided by strong inflows from the mainland as the protests subsided.
The Japanese Nikkei index closed down 0.72 of a percentage point to 20,972.71, its lowest close since 7 June.
European stocks hit six-week highs on Tuesday, driven by dovish remarks from European Central Bank chief Mario Draghi along with the news that the US and China would resume trade talks at the G20 summit.
Eurozone stocks jumped most markedly, up by 2 per cent, as the lower currency benefited exporters in economic zone.
Ahead of the local open, the SPI futures were 39 points higher at 6,614.
On Tuesday, the Australian share market has closed broadly higher following the release of board meeting minutes indicating the Reserve Bank is likely to cut interest rates again in the months ahead.
The benchmark S&P/ASX 200 index finished up 39.1 points, or 0.6 of a percentage point, to 6,570 points at 4.15pm on Tuesday.
The big four banks were mostly up, with only ANZ remaining flat. Westpac and NAB were up by 0.2 of a percentage point, with Commonwealth Bank gaining 1.6 per cent.
The mining sector was subdued, up by 0.1 of a percentage point, with BHP flat at $40.16, Rio Tinto down by 0.2 of a percentage point to $103.70 and Fortescue Metals up by 0.6 of a percentage point to $8.52.