Asian markets edge higher on hint of US optimism

Tuesday, 19 October 2010 23:39 - - {{hitsCtrl.values.hits}}

HONG KONG, (AFP) - Asian shares mostly edged higher on Tuesday as a touch of optimism crept into market sentiment after strong earnings reports in the United States.

Tokyo’s Nikkei index was up 0.53 percent in morning trade, Hong Kong’s Hang Seng gained 0.67 percent, Shanghai added 0.44 percent, Sydney rose 0.40 percent and Singapore put on 0.43 percent.

The improvements came after robust earnings from Citigroup in the United States lifted the beleaguered financial sector, with tech bellwethers IBM and Apple also boasting strong profits after trade ended.

The stock market rises came amid a slight strengthening of the dollar against the Japanese yen -- a possible shift after shares were mostly driven higher as the dollar weakened last week on expectations of US monetary stimulus.

Japanese banking and tech gained in particular following the US earnings reports.

“Traders may be coming to the view that the dollar bashing last week was perhaps a bit overdone,” one analyst at a Singapore bank told Dow Jones Newswires.

The dollar fetched 81.31 yen in Tokyo trading hours as opposed to 81.21 in New York earlier.

The greenback stood at 1.3943 to the euro, almost unchanged from 1.3942 in New York. The euro rose to 113.38 yen from 113.20.

In Sydney, resource stocks enjoyed a lift on the back of booming commodity prices, despite the Australian dollar’s record rise of the last week, in which it briefly reached parity with the greenback.

“Technically the (Australian) market is at the low range area of the major up-trend and falling behind schedule. Significant upward acceleration is likely in coming weeks,” said Clifford Bennett, chief economist at Herston Economics.

Overnight Wall Street rallied despite a report from the Federal Reserve showing a surprise 0.2 percent drop in industrial production in September, the first such fall since the economic recovery began in July 2009.

Markets are now looking ahead to a slew of US corporate results, a Group of 20 finance ministers’ meeting this weekend and a likely Federal Reserve announcement on economic stimulus measures next month.

The Dow Jones Industrial Average rose 0.73 percent, the broader S&P 500 index was up 0.72 percent and the tech-rich Nasdaq gained 0.48 percent.

Oil meanwhile dipped below 83 dollars a barrel in Asian trade, weighed by concerns about the US economy as well as the slightly strengthening dollar.

New York’s main contract, light sweet crude for November delivery, was down 20 cents at 82.88 dollars a barrel.

Brent North Sea crude for December delivery was 40 cents lower at 83.97 dollars.