In commodity markets, oil prices rose on hopes that stimulus efforts will help revitalise the US economy, but rising coronavirus cases and tensions between Washington and Beijing capped the gains.

A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange Monday, July 27, 2020.
A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange Monday, July 27, 2020. (Vincent Yu / AP)

Asian equities were set for a modest rise on Tuesday as investors weighed progress in US government stimulus efforts against rising tensions with China and the growing coronavirus pandemic, while gold hit a record high.

Gold jumped more than 1% to surpass its 2011 peaks, and put $2,000 per ounce in sight, as investors expected the US Federal Reserve to reaffirm its dovish message this week.

"I think we're going to have a fairly modest start to trade," said Commsec Senior Economist Ryan Felsman in Sydney, pointing to Asian futures rising overnight.

"Certainly, there was a positive lead in from the United States," Felsman said.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 4.64 points or 0.86 percent, to 546.81.

Hong Kong's Hang Seng index futures were up 0.54%, Japan's Nikkei 225 futures rose 0.11% and Australian S&P/ASX 200 futures were up 0.43%.

Australia, on Tuesday, is set to release consumer confidence and payroll data.

On Wall Street, the Dow Jones Industrial Average rose 114.88 points, or 0.43%, to 26,584.77, the S&P 500 gained 23.78 points, or 0.74%, to 3,239.41 and the Nasdaq Composite added 173.09 points, or 1.67%, to 10,536.27.

Investors eyed a $1 trillion coronavirus aid package announced by US Senate Republicans, hammered out with the White House, as expanded unemployment benefits for millions expire this week, although Democrats urged more support.

"The Republican plan is weak tea, when our problems need a much stronger brew," Senate Democratic leader Chuck Schumer said.

Concerns about the US economic outlook have started to weigh on the dollar. The dollar index USD=, which measures the greenback against six other major currencies, dropped 0.5% to its lowest level in nearly two years, supporting the rise in gold.

President Donald Trump, wearing a mask again, talked up the possibility of a coronavirus vaccine by the end of the year.

Moderna Inc's vaccine against Covid-19 could be ready for widespread use by the end of this year, US and company officials said, after the drugmaker announced the start of a 30,000-subject trial.

US investors, also on Monday, bet on some of the market's most high-profile stocks ahead of earnings reports.

Apple Inc, Amazon.com Inc, Facebook Inc and Alphabet Inc, all due to report earnings this week, were among the top boosters of the S&P 500.

But the moves could backfire, said CommSec's Felsman. "There's a lot of risk for investors that those earnings results may not be as good as expected," said Felsman.

China took over the premises of the US consulate in the southwestern city of Chengdu on Monday, after ordering that the facility be vacated in retaliation after the US ordered the shutdown of China's consulate in Houston amid accusations of spying.

In commodity markets, oil prices rose on hopes that stimulus efforts will help revitalise the US economy, but rising coronavirus cases and tensions between Washington and Beijing capped the gains.

Brent crude LCOc1 rose 7 cents to settle at $43.41 a barrel, while US West Texas Intermediate (WTI) crude CLc1 rose 31 cents to settle at $41.60 a barrel.

Source: Reuters