|
 European shares were also expected to build on Monday's strong
start, with spreadbetters seeing both Germany's and France's <.FCHI>
rising up to 0.7 percent and Britain's FTSE <.FTSE> 0.4 percent.
S&P futures <ESc1> rose 1.7 percent, pointing to a firmer opening as
well for U.S. markets, which were shut on Monday for a holiday.
MSCI's broadest index of Asia-Pacific shares outside Japan gained
1.1 percent, with mainland China shares advancing 2.7 percent to
three-week highs, helped by a surge in China's bank lending to a
record high..
"Before the start of the Lunar New Year, there were worries about
Chinese shares and a possible further fall in the yuan. But since
the resumption of trading on Monday, Chinese markets have been
surprisingly steady," said Koichi Yoshikawa, executive director of
financial markets at Standard Chartered Bank.
Japan's Nikkei <.N225> rose 0.2 percent after a 7.2 percent climb on
Monday, recovering a sizable part of its 11 percent slump last week
- its biggest since 2008.
 "It is partly a reaction after such big falls last week. Solid U.S.
data is also improving investor sentiment given that they are
counting on U.S. growth to lead the global economy," said Hirokazu
Kabeya, chief global strategist at Daiwa Securities.
Concerns over the health of European banks, the pain of cheap oil
prices on energy producers and worries about slowdowns in the U.S.
and Chinese economies pushed the world's share prices to 2-1/2-year
lows last week.
But U.S. retail sales data on Friday showing firm growth allayed
some fears - at least for now - that the U.S. economy could be
dragged into recession as growth stumbles in many parts of the
world.
Sentiment on the U.S. currency also improved, with the dollar rising
to 114.65 yen <JPY=>, recovering further from a 15-month low of
110.985 touched on Thursday.
The euro also eased to as low as $1.1128 on Monday <EUR=>,
retreating from Thursday's 3 1/2-month high of $1.1377, and last
stood at $1.1173.
The common currency was also driven lower by remarks from European
Central Bank President Mario Draghi that the bank is ready to ease
policy further in March.
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Gold <XAU=> extended fall from Thursday's one-year peak of $1,262.90
per ounce as safe-haven buying in the precious metal in recent weeks
was rolled back.
It fell 0.6 percent to $1,203.90, unable to find a floor after 2.2
percent on Monday, which was its biggest fall in almost seven
months.
Oil prices soared as news that top officials from the world's
biggest oil producers --Saudi Arabia, Russia, Venezuela and Qatar --
spurred speculation of an eventual deal to tackle a massive supply
glut.
"As much as we continue to believe that this is yet another meeting
that would yield nothing, the markets remain wary of any sudden
agreement that major oil producers could come to," said Daniel Ang,
an analyst at Phillip Futures in Singapore.
Global benchmark Brent futures <LCOc1> rose 4.1 percent to $34.76 a
barrel, their highest level in a week. U.S. crude futures <CLc1>
gained 4.4 percent to $30.72.
As risk sentiment improved, yields on top-rated government bond
rose, with the 10-year U.S. Treasuries yield rising 3.5 basis points
to 1.781 percent from 1.746 percent at the end of last week.
Japanese bond yields fell, however, as the Bank of Japan started
implementing negative interest rates on Tuesday, with the 10-year
yield dropping 4.5 basis points to 0.040 percent.
The benchmark overnight interbank lending rate fell to zero percent
but not to negative levels partly because some banks have not fixed
their system to deal with negative rates.
(Reporting by Hideyuki Sano; Additional reporting by Aaron
Sheldrick; Editing by Sam Holmes and Kim Coghill)
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