Asian stocks attempt a rebound with central banks in spotlight

Stocks climbed in Asian trading on Tuesday, pressing for a second day of gains as investors confronted a crowded central bank calendar and an unrelenting Middle East conflict.

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Markets are on edge, trying to price in the economic damage from US President Donald Trump's war with Iran and the policy reaction it could trigger.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.18, led by a 2.38 gain for South Korea's Kospi, while Japan's Nikkei 225 was flat. S&P 500 e-mini futures slipped 0.58.

On Wall Street on Monday, the S&P 500 rose 1.0% to snap a four-day losing streak on gains for AI stocks, though the index remains 38 below its level before the conflict began.

“The rally still has the feel of a positioning squeeze rather than the start of a new directional trend,” said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne. “I remain reluctant to buy dips at this stage.” Brent crude rose 3.4% to $103.58 a barrel after several US allies rebuffed Trump's call on Monday to send warships to escort tankers through the Strait of Hormuz, a vital artery for a fifth of global energy shipments. Iran's Revolutionary Guards also arrested 10 foreign individuals accused of spying in the country's northeast, the semiofficial Tasnim news agency reported on Tuesday.

Elsewhere, the Reserve Bank of Australia voted to hike interest rates for a second time this year, taking its benchmark rate to 4.1%, but the 5-4 vote was enough of a close call to put its next move in doubt. The Australian dollar gave up gains after the decision and was recently trading flat at $0.7073.