Asia shares track Wall Street gains amid easing inflation fears

Asian shares climbed in early trade on Tuesday, tracking a Wall Street rally overnight, while the dollar held near a fourth-month low as investors tempered fears about inflation-driven rate hikes.

In early trade, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.81 per cent at a two-week high, after US stocks ended the previous session with mild gains.

Australian shares were up 0.76 per cent, while Japan's Nikkei stock index rose 0.63 per cent. China's blue-chip CSI300 index jumped 0.22 per cent in morning trade, while Hong Kong's Hang Seng index opened up 0.41 per cent.

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"Markets were buoyed as data flow didn't live up to the strong-inflation narrative, and amid repeated guidance from senior central bank figures that the current rise in inflation is temporary," ANZ analysts wrote in a note.

The US national activity index reading of 0.24 against expectations above 1, along with dovish comments from Federal Reserve speakers, helped support the view that policy will remain on hold for some time.

Still, after global service sector surveys showed strong growth last Friday, all eyes will be on the release of US personal consumption data on Thursday, the Fed's preferred inflation measure.

Overnight, Wall Street closed higher, spurred by gains in tech stocks, with the sector's majors Apple up 1.33 per cent and Microsoft up 2.29 per cent.

The Dow Jones Industrial Average rose 0.54 per cent while the S&P 500 and the tech-heavy Nasdaq Composite gained 0.99 per cent and 1.41 per cent, respectively.

Treasury yields, which fell on Monday after a few Fed officials affirmed their support to keep monetary policy accommodative for some time, were little changed. The yield on benchmark 10-year Treasury notes was at 1.6046 per cent, near a two-week low.

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Digital currencies bounced back following last week's crypto rout, regaining ground lost during a weekend selloff on news of China's clamp-down on mining and trading of cryptocurrencies.

After shedding 13 per cent on Sunday, Bitcoin, the world's largest cryptocurrency, was last up 1 per cent on Tuesday at approximately $39,230.

By early Tuesday, the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, edged down to 89.779, just above a four-month low. The European single currency was up 0.1 per cent on the day at $1.2222, having gained 1.7 per cent in a month.

US crude ticked up 0.02 per cent to $66.06 a barrel. Brent crude rose to $68.54 per barrel.

Gold was slightly lower. Spot gold was traded at $1,876.66 per ounce.