Stocks in Asia climb after US markets rally on strong earnings
Markets in Asia traded mostly higher on Wednesday, as investor confidence stayed firm on the back of Wall Street’s advance following strong earnings.
In Japan, the Nikkei 225 rose by 1.16 percent and the broader Topix added 0.83 percent. Gains were broad-based, with retailers, utilities and technology among the rising sectors.
Across the Korean Strait, the benchmark Kospi advanced 1.23 percent, driven by gains seen in manufacturing stocks and brokerages, among others. The technology space was mixed, although index heavyweight Samsung Electronics soared 2.56 percent.
Hong Kong’s Hang Seng Index pared some of the prior session’s declines, last trading higher by by 1.07 percent.
Mainland markets tracked lower, with the Shanghai composite off by 0.03 percent and the Shenzhen composite slipping 0.37 percent.
Despite the broader decline, bank stocks rose after China’s central bank said Tuesday it was cutting the reserve requirement ratio by 100 basis points for some banks. “China’s reserve requirement ratio cut is supportive of risk sentiment as banks’ profit is expected to improve with lower funding costs,” OCBC Bank analysts said in a note.
Elsewhere, Australia’s S&P/ASX 200 edged up by 0.22 percent as a decline in the heavily weighted financials subindex was offset by gains seen in materials and energy.
Investors in the region also digested overnight developments on the trade front after China said on Tuesday it would impose deposits on U.S. sorghum imports: Several U.S. companies will be asked to put up a deposit of up to 178.6 percent on sorghum imports, Reuters said, adding that China said the move was temporary.
Trade developments also reflected “a bit of give and take,” ANZ analysts said, as Beijing also announced plans to relax foreign ownership rules in the car market.
Gains in Asia tracked the move higher on Wall Street on Tuesday, with U.S. stocks extending the previous day’s gains as investors cheered the release of strong earnings.
Netflix, Goldman Sachs and UnitedHealth were among the U.S. corporates announcing robust first-quarter earnings earlier amid upbeat investor expectations. S&P 500 earnings are expected to increase 18.6 percent in the quarter compared to one year ago, according to Thomson Reuters I/B/E/S.
Markets in the region had drifted lower on Tuesday as investors digested the release of China growth data for the first quarter, which came in at 6.8 percent — slightly above estimates.
In corporate news, miner Rio Tinto announced Pilbara iron ore shipments rose to 80.3 million tons in the first quarter, a 5 percent increase from one year ago. Pilbara shipments this year are expected to remain between 330 and 340 million tons, the company said. Rio Tinto shares were up 1.96 percent.
The dollar index, which tracks the greenback against a basket of currencies, edged higher to 89.539 after previously tumbling to a three-week low earlier in the week.
Against the yen, the dollar firmed to trade at 107.26 at 9:34 a.m. HK/SIN after slipping in the last session.
Oil prices extended slight gains seen in the last session. U.S. West Texas Intermediate rose 0.42 percent to trade at $66.80 per barrel and Brent crude futures gained 0.41 percent to trade at $71.87.
Source: CNBC
