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Asia stocks steady, rate cut awaited in Australia

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Pan European stock index breaks all-time high

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Crude rises after reports of Opec+ delays to supply

increase

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Investors wary of Russia-Ukraine talks, tariff news

(Changes dateline, recasts with Asia open)

By Nell Mackenzie and Tom Westbrook

LONDON/SINGAPORE, Feb 18 (Reuters) - Asian shares and

the dollar steadied on Tuesday, as traders waited on a rate cut

in Australia and company earnings in China, while European

shares marked record highs on the prospect of ramping up defence

spending to back up any Ukraine peace deal.

The Australian dollar stood near a two-month high

ahead of a central bank rate decision due at 0330 GMT. Markets

have priced about an 89% chance of a 25 basis point rate cut.

S&P 500 futures were up 0.2% and European futures

were flat in Asia morning trade. Japan's Nikkei

rose 0.3%.

Overnight, the pan-European STOXX 600 index closed

0.5% higher as a gauge of defence and aerospace stocks

surged 4.6% to lifetime peaks, having already more than doubled

in value since Russia invaded Ukraine three years ago.

Investors expect earnings in the industry to continue to

rise strongly, driven by a significant surge in defence budgets

to meet new security needs - which analysts have dubbed a

"supercycle" for the sector.

"A resolution to the conflict in Ukraine could deliver

positive growth impulses for Europe, including improved consumer

confidence, lower energy prices, and easier financial

conditions," Bruno Schneller, managing director at Erlen Capital

Management.

U.S. markets were closed overnight for a public holiday.

Europe's banks were also in demand, up 1% and flying

to 17-year highs, helped by a rise in bond yields.

French President Emmanuel Macron on Monday hosted an

emergency summit on Ukraine after U.S. officials suggested

Europe would have no role in any talks this week in Saudi Arabia

aimed at ending the conflict.

Britain said it was ready to send peacekeeping troops to

back up any deal, while Russian and U.S. officials prepared to

meet for their own competing talks on Tuesday in Saudi Arabia.

Ukraine's President Volodymyr Zelenskiy said on Monday that

the country would not recognise any decisions made in

deliberations where they were not present.

DELAYED THREATS

In China, markets have been buoyed by Monday's rare meeting

between President Xi Jinping and business leaders. Hong Kong's

Hang Seng rose slightly at the open.

Shares in Baidu ( BIDU ) steadied following their slide on

Monday after the founder of the search engine giant was not

spotted at the meeting. The company reports earnings later in

the day. Alibaba ( BABA ) is due to report later in the week.

BHP shares ticked 0.6% higher after the global

miner logged its lowest first-half profit in six years, but said

it saw signs of economic recovery in China.

The imminent threat of reciprocal U.S. tariffs has receded

until April, but the risk that they might include levies based

on value-added taxes in other countries was a major worry.

The Financial Times reported on Sunday that the European

Commission would explore tough import limits on certain foods

made to different standards in an effort to protect its farmers,

echoing U.S. President Donald Trump's reciprocal trade policy.

The rest of the week is filled with key data releases,

including February flash business activity data across the globe

while in Europe, markets also have their eye on German elections

this weekend.

The euro hovered just below $1.05, while the yen

was firm at 151.74 after solid growth data bolstered

chances of a rate hike in Japan in coming months.

The pound traded at around $1.26033, just below its

highest level in two months, as investors looked towards

employment and inflation data later in the week.

In commodity markets, gold came off Friday's record highs at

$2,895 an ounce having rallied for seven weeks straight.

Oil producer group OPEC+ is considering pushing back a

series of monthly supply increases due to begin in April despite

calls from Trump to lower prices, Bloomberg News reported on

Monday, citing delegates.

Brent held overnight gains at $75.16 an ounce.