Asian shares rise, earnings still in focus

TOKYO (Reuters) - Asian shares edged higher on Thursday as signs of recovery in China and the United States eased fears of deteriorating global growth, but sentiment remained vulnerable with weak corporate earnings continuing to undermine investor confidence.

The MSCI index of Asia-Pacific shares outside Japan was up 0.3 percent, having fallen the past four days. Australian shares inched up 0.2 percent with increases in copper and oil prices, while South Korean shares trimmed earlier losses to trade nearly flat ahead of third quarter results from Hyundai Motor Co.

Japan's Nikkei average rose 0.5 percent.

Credit Suisse said in a research note that Asian companies which have already reported third-quarter earnings have only had a slight negative surprise.

"While it is early days in the Asian reporting season with only 58 stocks or 12.3 percent of market capitalisation having reported, so far the change to 2013 estimate consensus EPS for companies that have reported since 30 September is -0.2 percent," it said.

The outlook also improved, with 48 percent of the companies which have reported the latest earnings downgrading forecasts, compared with two-thirds in the previous quarter, it said.

Southeast Asia is becoming one bright spot in a world of gloomy corporate earnings, with strong profit growth powered by a population of 600 million people increasingly willing, and able, to spend in their fast growing economies.

Brent was up 0.2 percent at $108.07 a barrel, after falling for a seventh consecutive session on Wednesday, while U.S. crude was also up 0.2 percent to $85.87, after settling at its lowest since July of $85.73.

London copper added 0.9 percent to $7,885 a tonne.

"I think markets are near their bottom or are bottoming out but investors are still not confident whether to trust positive indicators, putting a cap on prices," said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investment.

With stocks consolidating, the yen was pressured as the currency typically strengthens on risk aversion.

The dollar was up 0.2 percent at 79.95 against the yen to hover near its highest since early July of 80.02 touched on Tuesday. The euro was up 0.3 percent at 103.84 against the yen. The Australian dollar also rose 0.4 percent to 82.89 against the yen.

U.S. stocks fell and the dollar gained on Wednesday after the U.S. Federal Reserve maintained its policy of stimulating growth until the job market improves, even as it acknowledged some brightening parts of the economy.

The dollar index which is measured against a basket of major currencies reached a two week high of 80.151 on Wednesday after the Fed's decision.

The euro was up 0.1 percent at $1.2984, off a near two-week low of $1.29205 on Wednesday.

There was further evidence of recovery picking up in the U.S. housing market as new single-family home sales surged in September to their highest level in nearly 2-1/2 years.

But weak earnings outlooks and revenue misses at large U.S. multinationals made investors nervous about a slowing economy, and a Fed statement which did not mention an improving U.S. labour market, combined to push U.S. stocks lower.

European shares halted a three-day slide on Wednesday, comforted by a survey of purchasing managers signalling that China's economy is making a slow, steady recovery from its weakest period of growth in three years, with new orders and output at their highest in months.

The Chinese report lifted European oil and mining stocks on hopes for firmer demand from the world's top consumer of raw materials, offsetting dismal European manufacturing reports.

The euro zone's purchasing managers index fell to the lowest level since June 2009 in October, while manufacturing index in Germany, Europe's largest economy, fell unexpectedly and its business sentiment dropped for the sixth consecutive month to its lowest in more than 2-1/2 years.

As investors wait for clarify on the bailout prospects for struggling Spain and Greece, the head of the Spanish Treasury told Reuters on Wednesday that the country is ready to start funding itself for 2013 after having nearly completed its debt issuance plan for this year.

(Editing by Michael Perry)

Source: http://news.yahoo.com/asian-shares-rise-earnings-still-focus-023004416--finance.html

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