Asian shares advanced to one-week highs on Wednesday, led largely by strong U.S. corporate earnings, although the mood remained cautious as the rapidly spreading Delta variant of the coronavirus clouds the global economic outlook.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.1% to the highest since July 26.
Stronger-than-expected profits from U.S. companies in recent weeks have ratcheted up already high Wall Street forecasts on how second-quarter earnings growth will look versus last year.
Close to 90% of companies listed on the S&P500 have reported positive earnings surprises for the second quarter, according to National Australia Bank economist Tapas Strickland.
Analysts, however, cautioned about the rise in Delta infections of the coronavirus in Asia, with Chinese media reporting 31 provincial regions have warned residents against unnecessary travel in light of recent outbreaks.
China on Wednesday reported 96 new confirmed coronavirus cases for Aug. 3, of which 71 were locally transmitted.
· Hong Kong shares lead gains in Asia-Pacific; private survey shows Chinese services activity growth accelerating
Shares in Hong Kong led gains among the major Asia-Pacific markets in Wednesday trade, as a private survey showed accelerating Chinese services activity growth in July.
By Wednesday afternoon in Hong Kong, the city’s Hang Seng index jumped 1.57%, with shares of Chinese tech giant Tencent surging nearly 5% after seeing heavy losses yesterday.
The Caixin/Markit services Purchasing Managers’ Index for July came in at 54.9 on Wednesday, up from June’s reading of 50.3.
PMI readings above 50 represent expansion, while those below that level signal contraction. PMI readings are sequential and represent month-on-month expansion or contractions.
South Korea’s Kospi advanced 1.16%. In Australia, the S&P/ASX 200 gained 0.34%.
· China shares rise on tech sector bounce
A bounce in tech shares helped to lift China’s main stock indexes higher on Wednesday, a day after concerns over tightening oversight of online games wiped nearly $60 billion off the market capitalisation of Chinese tech giant Tencent.
At the midday break, the Shanghai Composite index was up 0.56% at 3,467.30.
China’s blue-chip CSI300 index was up 0.54%, with the CSI Info Tech index gaining 1.03%.
· Nikkei dips on Delta variant anxiety, Toyota slips after earnings
Japanese shares dipped on Wednesday as concerns about the rapid spread of the Delta coronavirus variant kept investors on edge, while Toyota Motor succumbed to profit-taking after upbeat earnings.
The Nikkei share average dipped 0.21% to 27,584.08, while the broader Topix fell 0.50% to 1,921.43.
Concerns about surging COVID-19 cases are mounting as the head of the Japan Medical Association called for a nationwide state of emergency.
· Toyota posts record profit but cautious on outlook as chip crunch weighs
· Indian shares hit all-time highs on financial, metals boost
Indian shares hit record highs on Wednesday, led by financial and metals sectors, as June-quarter corporate earnings momentum boosted investor sentiment.
By 0347 GMT, the blue-chip NSE Nifty 50 index climbed 0.6% to 16,235 and the benchmark S&P BSE Sensex rose 0.7% to 54,187.97.
The Nifty Financial Services Index rose 0.9%, while the metals sub-index gained 1.5%. HDFC Ltd was the top gainer on the Nifty 50 index, rising 1.7%.
· Malaysia PM defies calls to quit, wants confidence vote next month
· European markets climb as investors watch earnings, data; Commerzbank down 3.7%
European markets advanced on Wednesday, as strong U.S. corporate earnings boosted global sentiment.
The pan-European Stoxx 600 added 0.5% in early trade, with travel and leisure stocks climbing 1.2% to lead gains as all sectors and major bourses entered positive territory.
Earnings continue to guide sentiment in Europe, with Commerzbank, Siemens Energy, Hugo Boss and Intesa Sanpaolo among the big names reporting Wednesday.
Commerzbank reported a net loss of 527 million euros ($625.7 million) in the second quarter, as restructuring expenses and an exceptional write-off to an outsourcing project wiped out profits. The German lender’s shares fell 3.7% to the bottom of the Stoxx 600 in early trade.
· Citi cuts U.S. stocks to "neutral" on bearish Treasury view
U.S. inflation-adjusted “real” yields will rise around 70 basis points from current record lows around -1.2% by year-end, Citi said on Wednesday, citing this as a reason to cut its recommendation on U.S. stocks to “neutral” .
“We factor this bearish bond view into our global equity strategy. Amongst regions, we downgrade the Tech-heavy US to Neutral. We upgrade Japan to Overweight, where valuations and cyclical exposure should be supportive,” Citi told clients.
Reference: CNBC, Reuters
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