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Asian stocks higher as earnings season starts

Asian markets extended their gains on Tuesday (29 July) following a mixed lead from Wall Street as investors await the release of key US data later in the week. While trade was quiet, the advances were fuelled by upbeat corporate earnings.

HONG KONG: Asian markets extended their gains on Tuesday (29 July) following a mixed lead from Wall Street as investors await the release of key US data later in the week. While trade was quiet, the advances were fuelled by upbeat corporate earnings.

Japan's Nikkei was helped by a weakening yen, rising 0.57 percent, or 88.67 points, to 15,618.07. Sydney ended 0.20 percent higher, adding 11.01 points to 5,588.4 and Seoul added 0.64 percent, or 13.16 points, to close at 2,061.97. Shanghai gained 0.24 percent, or 5.24 points, to 2,183.19 and Hong Kong was up 0.87 percent, or 211.90 points, at 24,640.53.

Kuala Lumpur, Jakarta, Manila and Mumbai were closed for public holidays.

As Asia's earnings season kicks into gear Japanese firms have fared positively so far. Car giant Nissan on Monday was the first big name to report, announcing a 37 percent jump in net profit thanks to strong overseas sales. Nissan shares rose 3.4 percent on the news early Tuesday. After the market closed rival car giant Honda said net profit jumped almost 20 percent in April-June while it boosted its full-year forecast thanks to a weaker yen.

"Corporate earnings have been improving steadily helped by domestic consumption and capex (capital expenditure)," Shun Maruyama, chief Japan equity strategist at BNP Paribas Securities, told Dow Jones Newswires. "We can anticipate a gradual rising trend."

The Tokyo market also got support from data showing that a recent decline in household spending eased to 3.0 percent year-on-year in June, which was much smaller than the 8.0 percent dive in May and the 4.6 percent loss in April. Hiroichi Nishi, general manager of equity at SMBC Nikko Securities, said investors were worried Japan's sales tax hike in April could weigh on results but "excessive concerns are receding".

US FED MEETING IN FOCUS

On foreign exchange markets the euro was marginally higher against the yen but was still wallowing near multi-month lows against the Japanese unit and the dollar. The single currency bought US$1.3430 and 136.90 yen against US$1.3438 and 136.87 yen in US trade on Monday. The dollar fetched 101.90 yen, compared with 101.85 yen in New York.

On Wall Street the Dow rose 0.13 percent, the S&P 500 was a tad higher and the Nasdaq dipped 0.10 percent.

Investors are now awaiting the release of key US data, including on second-quarter growth and jobs creation, which will give a better idea about the state of the economy. On Wednesday the Federal Reserve will hold its latest board meeting, with bank head Janet Yellen facing calls to embark on a tighter monetary policy to quell what some analysts warn are overheated asset markets and bubbles in some sectors.

Other economists suggest the Fed bring forward its plan to lift interest rates to the end of this year, instead of late 2015 as previously indicated. Richard Fisher, the hawkish head of the Federal Reserve's Dallas branch, said in a newspaper piece on Sunday that the country is experiencing financial excess that is of its own making.

In oil trade US benchmark West Texas Intermediate for September delivery was down 33 cents at US$101.34 a barrel in afternoon trade and Brent crude for September fell 13 cents at US$107.44.

Gold fetched US$1,310.54 an ounce by 0800 GMT compared with US$1,304.00 late Monday.

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