© Reuters. Pedestrians are reflected in an electronic board displaying various stock prices at a brokerage in Tokyo

By Julie Zhu and Koh Gui Qing

HONG KONG/NEW YORK (Reuters) – Asia extended the global rally in stocks on Tuesday as a halt in a recent bond markets sell-off eased investor nerves and lifted riskier assets, although oil prices were on the defensive on fears of slowing Chinese energy consumption.

MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.97% while was slightly down 0.12%.

Australian shares continued their climb on Tuesday, with rising as much as 1.05%, its highest since Feb. 19, as a rollout of another vaccine in the United States and optimism over a coronavirus relief package boosted hopes of a quicker global economic recovery.

Chinese blue-chips gained 0.58% in early trade while Hong Kong’s advanced 0.9%, helped by steady and robust demand from investors in mainland China for shares in the Asian financial hub.

China will begins its annual session of parliament on Friday in Beijing, which is expected to chart a course for economic recovery and unveil a five-year plan to fend off stagnation.

U.S. stocks () rallied overnight, with the posting its best day in nearly nine months, as bond markets calmed after a month-long selloff.

For now, all eyes will be on Australia’s central bank, which holds its monthly policy meeting on Tuesday. Analysts expect the Reserve Bank of Australia to hold key rates at a historic low but focus will shift to commentary about its quantitative easing programme.

“There’s everything to like about the rally in EU and U.S. equity markets,” said Chris Weston, the head of research at Pepperstone Group Ltd in Australia.

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“Financials outperformed, with 95% of stocks in the S&P 500 gaining on the day,” he said, adding that “clearly investors are seeing the world in a new light”.

U.S. stocks were roiled last week when a sell-off in Treasuries pushed the 10-year Treasury yield to a one-year high of 1.614%. The 10-year yield was edging lower in early trade at 1.4204%. [US/]

However, demand for riskier assets did not slug the dollar, usually regarded as a safe-haven currency, as investors bet on fast growth and inflation in the United States. The gained 0.14% in early trade against a basket of currencies to stand at 91.142, within sight of a three-week high hit overnight. [USD/]

The Australian dollar was down 0.25% at $0.77510 ahead of the RBA meeting.

A stronger greenback weighed on gold, and the precious metal was on the defensive at $1,711.4100 an ounce early Tuesday. [GOL/]

The exuberance in risk assets did not help energy markets. Oil prices fell more than 1% overnight after data showed China’s factory activity growth slipped to a nine-month low in February, owing in part to disruptions over the Lunar New Year holiday. There were also fears among energy investors that OPEC may increase global supply following a meeting this week. [O/R]

fell 1.27% to $62.88 a barrel, while U.S. West Texas Intermediate crude lost 1.3% to $59.85.

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