SYDNEY (REUTERS) - Australian shares were set to open higher on Tuesday (Feb 23) as sentiment brightened from recent extreme levels of risk aversion, lifting equities globally and boosting commodity prices.

The local share price index futures rose 0.8 per cent, following a 1.05 per cent rally on the underlying S&P/ASX 200 index. The benchmark ended at 5,004 on Monday, with the next big chart barrier around 5,073.

Iron ore, oil and copper all enjoyed substantial gains overnight, lifting shares of BHP Billiton and Rio Tinto traded in London.

However, early on Tuesday, BHP reported a large loss for the half year and slashed its dividend.

New Zealand's benchmark S&P/NZX 50 index rose 0.24 per cent in early trade.