Asian stocks rose to three-month highs on Tuesday in the face of fresh evidence suggesting China could be emerging from an economic slowdown while receding fears of a U.S. military strike against Syria kept oil prices under pressure.
European stocks were seen tracking gains in Asia with financial spreadbetters expecting Germany's DAX to open up as much as 0.5%.
Russia's proposal to work with Damascus to put its chemical weapons under international control could avert planned U.S. action. It prompted President Barack Obama to say he saw a possible breakthrough in the crisis.
Benchmark Brent oil prices fell 0.8% to $112.85 a barrel, extending Monday's 2.1% slide. U.S. crude slipped 1.0% to $108.44.
Lower oil prices are usually a positive development for Asia, a region that relies heavily on imports for its energy needs.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2%, extending Monday's 1.3% gain to reach highs not seen since early June.
Tokyo's Nikkei closed 1.5% higher, adding to Monday's 2.5% rally as news that Tokyo had won the right to host the 2020 Olympic Games bolstered optimism for a lasting economic recovery.
MORE CHINA DATA
Upbeat Chinese industrial output and retail sales data on Tuesday added to growing evidence that China's economic slowdown may have bottomed out.
A recent run of encouraging factory activity data from China, Europe and the U.S. suggested the global economy as a whole was on a firmer footing.
In a slight twist to this narrative, sentiment for emerging markets also found support in disappointing U.S. jobs data for August because it raised doubts about whether the Federal Reserve can scale back stimulus in any significant way next week.
Such an outcome should be good news for emerging markets, which have suffered from an outflow of funds as investors positioned for a world with less easy money from major central banks.
The MSCI emerging equities index advanced 1.1% to three-month highs and has rallied nearly 5% in the last five trading sessions.
The disappointing U.S. jobs data has cast a long shadow on the dollar, which was subdued after two straight days of declines. It wallowed at a 1-1/2 week low against a basket of major currencies, having fallen 1% since Friday.
Adding to the uncertainty, San Francisco Federal Reserve Bank President John Williams said on Monday he hasn't made up his mind yet over whether to support a reduction in Fed bond purchases.
The weakened dollar helped the euro recover from last week's selloff sparked by dovish comments from the European Central Bank. The common currency was steady at $1.3271, keeping close to a 1-1/2 week peak of $1.3281 scaled on Monday.
The greenback fared better against the yen, which sagged on Monday as the Nikkei rallied. The Japanese currency has tended to move inversely to the Nikkei this year.
Copper was a touch softer at $7,178.00 a tonne, having climbed from last week's trough of $7,082 on optimism about China.
Spot gold was slightly weaker on the day at $1,377.61 an ounce, still in consolidating after its late-June to late-August rebound from $1,180.71 to $1,433.31 fizzled out.
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