Asia rises as upbeat earnings, data, boost risk appetite
TOKYO (Reuters) – Asian equities rose on Monday, taking heart from upbeat earnings and economic data that eased recent global growth fears and sharpened risk appetite, while the dollar advanced to a three-week high against the yen.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.35 percent and Tokyo’s Nikkei (.N225) rose 0.5 percent.
“Stable housing starts in the U.S. and solid Q3 GDP in the U.K. are likely to give the market some comfort after the recent concerns about global growth,” strategists at Barclays wrote in a note to clients.
Data on Friday showed new U.S. home sales rose to a six-year high and Britain’s economy expanded 0.7 percent in the third quarter, still on track to outpace other advanced economies
U.S. stocks, recovering from a battering earlier in the month on worries about global growth losing momentum, gained Friday on upbeat earnings from blue chips Microsoft (MSFT.O) and Procter & Gamble (PG.N). Easing worries over the possible spread of Ebola in the United States also helped.
In currencies, the dollar traded at 108.18 yen (JPY=) after touching a three-week peak of 108.38, with a rise in U.S. Treasury yields and improving risk appetite buoying the greenback.
The euro edged up 0.1 percent to $1.2628 (EUR=), trading in a narrow range after showing a limited reaction to Sunday’s health check results of euro zone banks, which painted a slightly brighter picture than expected.
Roughly one in five of the euro zone’s top lenders failed the health checks at the end of last year but most have since repaired their finances, the European Central Bank said on Sunday.
While 25 of the euro zone’s 130 biggest banks failed the health check at the end of last year with a total capital shortfall of 25 billion euros, a dozen have already raised 15 billion euros this year to make repairs.
The Brazilian real’s non-deliverable forwards showed muted response so far after leftist President Dilma Rousseff narrowly won re-election on Sunday.
Investors have generally disliked Rousseff’s interventionist management of state-run companies and other sectors of the economy, but some traders think her re-election is already priced in as the real (BRL=) has fallen nearly 10 percent since early September.
In commodities, Brent crude dipped 14 cents to $85.99 a barrel (LCOc1), continuing a months-long rout as signs of rising global supply threatened deeper losses. [O/R]
Iraq increased its oil supply in October and Libya’s output remains high, despite instability in both countries.
Gold edged lower as robust equity markets and strong U.S. economic data dented demand for the precious metal. [GOL/]
Spot gold (XAU=) was down 0.25 percent at $1,227.70 an ounce.
(Additional reporting by Hideyuki Sano in Tokyo; Editing by Eric Meijer)