Strong earnings from US companies support Asian shares

Tokyo — Asian stocks were higher on Wednesday, supported by strong Wall Street earnings and the hope that China’s government spending would boost growth but trade tension remains in focus ahead of a meeting between the US and European commission presidents.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2%. The index extended the previous day’s gains made after China said it would adopt a more vigorous fiscal policy to cushion the impact of external uncertainties.

The Shanghai Composite index was little changed after brushing a one-month high. It has advanced about 3% so far this week. Hong Kong’s Hang Seng climbed 0.6%. South Korea’s Kospi lost 0.15% and Japan’s Nikkei rose 0.5%. Overnight on Wall Street, the S&P 500 closed at its highest level since February 1 as Alphabet’s blowout results bolstered the expectation of a robust earnings season.

“Gains by US shares are providing support for equities, as well as China’s stimulus plan. Corporate earnings will continue to come out and these will be a key focal point for the markets, which also have to keep an eye on trade developments,” said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo.

On the trade front, focus was on talks between US President Donald Trump and European commission president Jean-Claude Juncker set later on Wednesday, at which trade issues are likely to dominate.