By Chibuike Oguh
NEW YORK (Reuters) - Asian stocks were set for gains on Tuesday after a strong Wall Street session as easing lockdown restrictions by some countries and U.S. 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 <NKc1> were up 3.05% from the cash contract's close on Monday. The Nikkei 225 index <.N225> closed down 0.86% at 19,262 in the previous session.
Australian S&P/ASX 200 futures <YAPcm1> were up 0.09% and Hong Kong's Hang Seng index futures <.HSI> <.HSIc1> were up 0.54%.
All three major U.S. stock averages advanced, and are all now within 20% 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 U.S. 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 U.S. 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 <.DJI> rose 1.51%, the S&P 500 <.SPX> gained 1.47% and the Nasdaq Composite <.IXIC> added 1.11%.
The pan-European STOXX 600 index <.STOXX> rose 1.77% and MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 1.76%.
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.
U.S. crude <CLc1> fell 23.55% to $12.95 per barrel and Brent <LCOc1> was at $20.07, down 6.39% on the day.
The U.S. dollar dropped as the broader upbeat mood encouraged investors to move into other currencies.
The dollar index <=USD> fell 0.17%, with the euro <EUR=> up 0.05% to $1.0825.
The Japanese yen strengthened 0.26% versus the greenback at 107.30 per dollar, while sterling <GBP=> was last trading at $1.2421, up 0.44% on the day.
Bucking the trend, the Brazilian real <BRL=> was on track to close at a record low against the greenback.
(Reporting by Chibuike Oguh; Editing by Sam Holmes)