Asian stocks were poised to follow the global rally on Wednesday as hopes of more government stimulus bolstered riskier assets and overshadowed a host of other worries from the coronavirus to Hong Kong and growing US civil unrest.

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E-mini futures for the S&P 500 were up 0.3 percent and Japan's Nikkei 225 futures were 1.6 percent higher in Asia on Wednesday morning, while Australian futures rose 0.58 percent in early trading.

That comes after stocks in the United States, Europe and emerging markets hit their highest levels on Tuesday since early March and as bidding for riskier currencies pushed the dollar toward three-month lows and oil neared three-week highs.

From its March 23 low, MSCI's gauge of stocks across the globe was up 35 percent. Despite lockdowns to control the COVID-19 pandemic, the global index is down year-to-date only about 8 percent.

US stocks indexes rose about 1 percent even as the worst civil unrest in decades left dozens of cities under curfews following protests over the death of an unarmed black man in police custody.

With its gains, the US tech-heavy Nasdaq Composite is down less than 3 percent from its pre-pandemic record highs.

"The good times continue to roll in risk markets," Mazen Issa, senior FX strategist at TD Securities, said in a report. "As intense as the rally has been, this is likely set to continue as the breadth of the equity rally has now spread outside the US"

The US Treasury yield curve steepened, reflecting the sale of more government debt to finance massive stimulus efforts. The gap between yields on 5- and 30-year Treasuries reached 116 basis points on Tuesday, its highest since early 2017.

"A steepening curve does give equities a bit of a kick," said Kim Rupert, senior economist for Action Economics.

Expectations for additional support from the European Central Bank and the German government boosted European stocks and the euro on Tuesday.

Volkswagen, Daimler and BMW, for example, gained more than 5 percent on confidence that Germany's proposed 5 billion euro stimulus package will boost car sales.

The ECB is expected to ramp up stimulative bond purchases when it meets on Thursday.

Oil prices climbed more than 3 percent, or $1 a barrel, on Tuesday on renewed US demand for gasoline and hopes that major crude producers will agree this week to extend output cuts. US West Texas Intermediate crude (WTI) settled at $36.81 and Brent crude settled at $39.57 a barrel.

Gold retreated 1 percent on Tuesday amid the broader optimism.

US gold futures settled down 0.9 percent at $1,734.

Gold is still up more than 18 percent from a low of $1,450.98 in March because of the economic damage from the pandemic and the massive amounts of money coming from central banks.

First Published:Jun 3, 2020 7:51 AM IST