Most stock markets extended gains Tuesday on further signs that China-US trade tensions were easing and as investors looked to corporate earnings.

Tokyo hit another record as Japan swore in new prime minister Sanae Takaichi and brought an end to a period of political uncertainty.

European equities were mostly higher, tracking gains in Asia where Hong Kong and Shanghai closed up more than one percent.

"Wall Street enjoyed a particularly strong session on Monday, and that optimism has extended to Asia and Europe," said Russ Mould, investment director at AJ Bell.

"The focus is now on US interest rate cuts, the new corporate reporting season, and US-China trade talks," he added.

Investors will look to US inflation figures due Friday for further signals about the pace of the rate cuts.

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