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Business News/ Money / Asia stocks scale 14-mth highs ahead of earnings
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Asia stocks scale 14-mth highs ahead of earnings

Asia stocks scale 14-mth highs ahead of earnings

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Hong Kong: Asian stocks rose to a 14-month high on Tuesday, with some investors taking bets that third quarter US corporate earnings, expected to shrink for the ninth quarter, will be good enough to keep a rally going.

Investors are looking for stronger revenues to confirm a global economic recovery and justify higher share price valuations after a seven-month-long equity rally. Profits last quarter were largely underpinned by cost cutting, not a rebound in consumer or business demand.

Oil prices rose for a fourth day to trade around $74 (around Rs3,450) after settling at a seven-week high on Monday. A steady 11% decline in the US dollar against a basket of currencies since March has supported commodity prices.

After a respite through much of Asian trade, the dollar fell to within sight of recent lows as gold hit a new high above $1,065 and commodity prices strengthened, lifting the euro above $1.48.

Wall Street finished higher on Monday, but late-session profit-taking made some investors unsure how to play results from Intel Corp., the world’s biggest chip maker, which was due to report after New York market closed on Tuesday. The focus will be on the outlook for business spending given Intel’s global reach.

“When Intel reports earnings, its outlook will likely be particularly in focus. If chipmakers were to say they expect demand to increase, that would mean the economy is on the mend," said Mitsuo Shimizu, deputy general manager at Cosmo Securities in Tokyo.

After a long holiday weekend, Japan’s Nikkei share average rose 0.6%, with electronics and car maker stocks among the main supports to the index.

The MSCI index of Asia Pacific shares outside Japan rose about half a percent in choppy trading, tipping the highest level since 12 August before retreating a bit.

Energy, financial and telecommunications sectors outperformed, while industrials, IT and consumer discretionary underperformed.

The all-country world equities index hit a 1-year high on Monday and looked set to test that high on Tuesday.

South Korea’s benchmark Kospi fell 0.7%, the worst performing major market in the region, on fears that earnings may peak in the third quarter.

India’s stock market was closed for a public holiday.

A report that North Korea was preparing to fire more short-range missiles a day after it launched five off its east coast had limited impact on financial markets.

Chinese shares gathered pace across the board as hopes for strong earnings sparked buying while some risk appetite returned amid the dollar’s weakness.

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Published: 13 Oct 2009, 11:08 PM IST
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