HONG KONG, China (AFP) — Asian markets rose Tuesday, extending a Wall Street rally as optimism over corporate earnings provided some respite from long-running worries about inflation, central bank tightening and signs of a slowing economic recovery.
A string of forecast-beating profit reports from businesses over the past week has provided a much-needed boost to investors who have for much of the year been waiting nervously for finance chiefs to start winding in the vast cash support put in place at the start of the pandemic.
The positive readings have eased concerns about the impact on companies’ bottom lines from surging inflation, a brewing energy crisis and expectations that the era of cheap money will soon be coming to an end.
“Thus far we’ve seen companies post some fairly decent beats on the earnings front, and while it’s been notable that most have cited concerns about rising costs, as well as supply chain disruptions, we haven’t seen many significant profit downgrades yet,” said CMC Markets analyst Michael Hewson.
The S&P 500 and Nasdaq on Wall Street ended in positive territory, and Asia followed suit.
Hong Kong and Taipei put on more than one percent each, while Shanghai, Tokyo, Seoul, Singapore, Wellington, Manila and Mumbai also saw healthy gains. However, Sydney, Bangkok and Jakarta slipped.
London, Paris and Frankfurt rose in opening business.
Investors brushed off reports that North Korea had fired an unidentified projectile into the sea.
While attention is largely on the release of profit reports, traders are also awaiting comments from the Federal Reserve as it prepares to scale back its vast bond-buying programme with an eye on surging prices.
Oil builds on gains
The bank has already signalled a start to the taper before the end of the year but observers are now pricing in the possibility of an interest rate hike in mid-2022, much earlier than had originally been envisaged.
“The world is watching interest rates more closely than it has for some time,” Chris Weston, at Pepperstone Financial, said, adding that it was “impressive how resilient and calm markets are in the face of the rates repricing”.
Analysts said Hong Kong was enjoying a break from selling — it has lost more than five percent this year — as China shows signs of slowing its crackdown on private enterprises such as tech firms that are listed in the city.
They added that concerns about the country’s growth, which has been stunted by a regulatory drive against the property sector, could also be a factor in leaders stepping back from further measures.
Oil markets built on a recent run-up in prices that has been fuelled by slim supplies and expectations for a surge in demand through the northern hemisphere winter.
A spike in the cost of natural gas has also seen energy providers switch to crude in some cases, adding to upward pressure on the commodity, while OPEC’s decision not to ramp up output has further complicated the issue.
Bitcoin hit a morning peak of $62,961, less than $2,000 short of its April record, before easing back with a new security to invest in the cryptocurrency due to begin trading Tuesday on the New York Stock Exchange.
Key figures around 0720 GMT
Tokyo – Nikkei 225: UP 0.7 percent at 29,215.52 (close)
Hong Kong – Hang Seng Index: UP 1.4 percent at 25,767.18
Shanghai – Composite: UP 0.7 percent at 3,593.15 (close)
London – FTSE 100: UP 0.1 percent at 7,211.84
Dollar/yen: DOWN at 114.05 yen from 114.29 yen at 2050 GMT
Pound/dollar: UP at $1.3776 from $1.3728
Euro/dollar: UP at $1.1648 from $1.1613
Euro/pound: UP at 84.57 pence from 84.56 pence
West Texas Intermediate: UP 0.8 percent at $83.08 per barrel
Brent North Sea crude: UP 0.6 percent at $84.86 per barrel
New York – Dow: DOWN 0.1 percent at 35,258.61 (close)
— Bloomberg News contributed to this story —
© Agence France-Presse
