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Global Markets: Asia stocks cling to nine-month high on China hopes, Wall Street dented by earnings

File photo. Photograph:( AFP )

Reuters Tokyo, Japan Apr 16, 2019, 12.31 PM (IST)

Asian stocks ticked up on Tuesday, staying near a nine-month as hopes of stabilisation in the Chinese economy helped investors shrug off Wall Street's underperformance that followed disappointing bank earnings.

European shares are set to pick up, with futures of London and Frankfurt shares rising 0.2 to 0.3 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent, led by gains in China and India.

The index had risen to its highest level since July 2018 the previous day after strong export and banking data from China last week eased investors' concerns about the health of the world's second-largest economy.

Mainland Chinese shares rose 1.7 per cent, partly on brisk home prices data while India's NSE index rose 0.8 per cent to a record high, surpassing its previous peak hit earlier this month. Japan's Nikkei edged up 0.2 per cent.

"Recent Chinese data is boosting confidence in the Chinese economy while earnings have not been bad either," said Yukino Yamada, senior strategist at Daiwa Securities.

"Indian shares are rising on hopes on the country's elections. In the past they have tended to do well during a six-month period leading up to the election as well as one month after the election," she added.

Expectations that Chinese and US trade negotiators would strike a deal soon also underpinned markets.

The US-China trade dispute, signs of slowing global corporate earnings and business investment have all put pressure on riskier assets in the past year, so investors have been quick to lap up positive news.

Wall Street lost ground on Monday, dragged down as underwhelming bank earnings curbed investor enthusiasm. But while all three major US stock indexes edged lower, the S&P 500 remained within a per cent of its record high.

Safe havens such as bonds, which were on the defensive following the recent improvement in investor risk appetite, were given some reprieve.

The 10-year US Treasury yield was at 2.548 per cent, edging back from a four-week high of 2.574 per cent reached on Monday.

Spot gold was a shade lower at $1,286.21 an ounce and headed for its fourth straight days of losses.

Elsewhere in commodities, the recent rally in crude oil prices halted on the prospect of Russia and OPEC boosting production to fight for market share with the United States. 

US West Texas Intermediate crude futures were down 0.15 per cent at $63.30 per barrel after losing nearly 0.8 per cent the previous day.

US crude had scaled a five-month high of $64.79 earlier this month.

Oil had rallied on tightening global supplies, as output has fallen in Iran and Venezuela amid signs the United States will further toughen sanctions on those two OPEC producers, and on the threat that renewed fighting could stop production in Libya.

Story highlights

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent, led by gains in China and India.