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Asia stocks edge up on easing Syria tensions; focus on earnings, China GDP

Asia stocks edge up on easing Syria tensions; focus on earnings, China GDP

TOKYO: Asia stocks edged higher on Tuesday, tracking Wall Street gains as the focus shifted to corporate earnings and looming economic data from China amid signs Western-led strikes on Syria weren’t likely to escalate.

The dollar pulled back along with safe-haven U.S. Treasuries as investor risk appetite improved in the broader markets.

The near-term focal point was on China’s gross domestic product data due at 0200 GMT.

The world’s second biggest economy was expected to have carried most of its strong momentum from last year into the first quarter of 2018, after growing 6.8 percent in the fourth quarter.

While Saturday’s missile strikes were the biggest intervention by Western countries against Syria, investor risk appetite in the broader markets improved on speculation that the attacks would not lead to prolonged conflict.

“The markets had been bracing for a possible escalation in Syria following President Trump’s earlier warnings. Military action, however, has been limited, bringing relief,” said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo.

“That said, the underlying picture has not changed. Conflict continues in Syria and trade issues remain unresolved. Geopolitics will impact the markets again.”

MSCI’s broadest index of Asia-Pacific shares outside Japan  edged up 0.22 percent.

Japan’s Nikkei climbed 0.2 percent. South Korea’s KOSPI gained 0.2 percent and Australian stocks added 0.45 percent.

The Dow gained 0.87 percent and the S&P 500 rose 0.8 percent on Monday, with the biggest boosts from technology and healthcare sectors as investors were optimistic about the earnings season and appeared less worried about U.S.-led missile attacks in Syria.

S&P 500 companies are expected to report an 18.6 percent jump in first-quarter profit, on average, the biggest rise in seven years, according to Thomson Reuters data.

The dollar index against a basket of six major currencies was little changed at 89.407 after losing 0.4 percent overnight.

The euro was a shade higher at $1.2383. The dollar was steady at 107.100 yen.

The pound touched a near three-month high of $1.4346  and in reach of a post-Brexit referendum high with focus on data that could cement expectations of a May interest rate increase by the Bank of England.

The Hong Kong Monetary Authority (HKMA) stepped into the currency market again on Tuesday, buying HK$5.77 billion ($735 million) in Hong Kong dollars as the local currency repeatedly hit the lower end of its allowable trading band.

The 10-year U.S. Treasury note yield was at 2.832 percent  after rising to 2.865 on Monday, its highest since March 22.

U.S. crude oil futures rose 0.3 percent to $66.43 a barrel  after tumbling nearly 1.8 percent overnight on waning concerns about tensions in the Middle East.

Copyright Reuters, 2018

Source: Brecorder

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