Asian shares gains ahead of US midterm elections

Asian shares inched up on Tuesday, supported by Wall Street gains although momentum was tempered ahead of the U.S. midterm elections, the first major electoral test of President Donald Trump's big tax cuts and hostile trade policies.

Ahead of Tuesday's U.S. midterm elections, investors generally expect opposition Democrats to take over the House of Representatives while Trump's Republican Party is tipped to retain the Senate.

While political gridlock between the White House and Congress could hinder Trump's pro-business agenda and raise concerns about political instability, some analysts say such an outcome may have already been priced in by investors.

Japan's Nikkei average climbed 1.1 percent. The Shanghai Composite and blue-chip CSI 300 eased 0.2 percent and 0.6 percent, respectively. Both mainland benchmarks were able to recover some of their earlier losses.

The Cboe Skew index, also known as the "black swan" index,

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.4 percent on a positive lead from Wall Street, but the gains were capped by falls in Chinese markets and regional technology shares.

On Wall Street, the S&P 500 gained 0.56 percent, with financials such as Berkshire Hathaway supported by strong earnings.

Taking the lead from U.S. and Asian peers, European futures pointed to a higher opening, with financial spreadbetters showing London's FTSE, Frankfurt's DAX, and Paris's CAC expected to rise between 0.2 and 0.4 percent.

A higher skew typically indicates investors are buying more protection on heightened anxiety.

If the Republicans retain their House majority, global stocks are likely to rally on hopes of more tax cuts.

Many investors also expect Trump to continue to take a hard line on trade, regardless of the outcome of the elections.

In oil markets, crude prices wobbled near multi-month lows after the United States allowed eight countries to temporarily continue buying oil from Iran, addressing supply concerns as Washington formally imposed punitive sanctions on the Islamic republic.

Moves in major currencies were modest ahead of the U.S. election. The dollar rose 0.2 percent against the yen to 113.44 yen, its highest level in four weeks.

The euro traded at $1.1409, about one cent above this year's low of $1.1301 touched on August 15.