In US economic data, wholesale inventories rose by 0.4 per cent after an upwardly revised 0.4 per cent gain in September (previously reported as a 0.3 per cent rise). Wholesale sales lifted by 0.2 per cent in September. An ISM industry report on the US manufacturing sector expected revenue to rise by 5.6 per cent in 2015, with capital investment expected to lift by 3.7 per cent.
European shares fell to a two-week low on Tuesday, led down by a slump in Greek stocks after an unexpected decision to bring forward the country's presidential election. Concerns centred on the strength of the anti-bailout Syriza party. The Greek ATG stock index fell 12.8 per cent -- posting the biggest one-day fall since November 1987. The banking sector bore the brunt of the weakness. Peripheral economies also fell with Spain's IBEX down 3.2 per cent and Italy's FTSE MIB down 2.8 per cent. The FTSEurofirst 300 index was down by 2.3 per cent with the German Dax also lower by 2.2 per cent while the UK lost 2.1 per cent. In London trade shares in BHP Billiton fell by 1.6 per cent while Rio Tinto eased 1.2 per cent.
US sharemarkets fell on Tuesday but were well off the session lows supported by gains in tech and energy shares. The S&P energy sector gained 0.3 per cent after losing 3.9 per cent in the prior session. However political and growth concerns in Greece and the broader Euro zone dominated sentiment. At the close of trade, the Dow Jones was lower by 51 points or 0.3 per cent, after being down by almost 220 points. The S&P 500 index closed flat while the Nasdaq gained 26 points or 0.5 per cent.
US treasuries rose on Tuesday (yields lower). The slide in global equities increased the demand for safe haven US debt. US two-year yields fell 1 point to 0.619 per cent while US 10-year yields fell by 4 points to 2.222 per cent.
Major currencies were generally firmer against the greenback in European and US trade on Tuesday. The Euro lifted from lows near $US1.2310 to around $US1.2450 and was near $US1.2380 in late US trade. The Aussie dollar rose from lows near US82.30c to around US83.65c and was around US83.10c in late US trade. And the Japanese yen strengthened from 120.25 yen per US dollar to ¥118.05 and was near ¥119.35 in late US trade.
World oil prices rose for the first time in five sessions as traders speculated on a sustainable oil price. A weaker US dollar helped support the bid for oil. Brent crude rose by US53c or 0.8 per cent to $US66.72 a barrel. The US Nymex crude price rose by US77c or 1.2 per cent to $US63.82 a barrel.
Base metal prices were mostly higher on the London Metal Exchange on Tuesday with the exception of nickel (down 0.8 per cent) and lead (down 0.7 per cent). Copper led the gains up 1.2 per cent. Gold rose on Tuesday in response to a weaker greenback and safe-haven buying. The Comex gold futures price was up by $US37.10 an ounce or 3.1 per cent to $US1,232.00 per ounce. Iron ore fell by US30c to $US69.40 a tonne on Tuesday.
Ahead: In Australia housing finance and consumer sentiment figures are released. In the US, no economic data is released. Chinese inflation data is expected.
Savanth Sebastian is an economist with CommSec.