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Thursday, October 28, 2021
Stocks & Shares

Asian stocks rise ahead of U.S. earnings reports

Shanghai Composite Index

Shanghai Composite Index gained 0.3% to 3,559.96, Nikkei 225 added 0.8% to 28,807.95, Hang Seng advanced 1.8% to 27,999.08, Kospi gained 0.7% to 3,270.89 and S&P-ASX 200 added 0.4% to 7,361.90

Stock markets in Asia rose on Tuesday taking a cue from Wall Street ahead of U.S. earnings reports that are expected to show strong profits for major banks.

Stock markets in Shanghai, Tokyo, Hong Kong and Sydney gained.

Overnight, Wall Street’s benchmark S&P 500 index rose 0.3% to a new high, led by banks, communications and consumer-oriented stocks.

Wall Street is bracing for a volatile week as market participants are divided on a bevy of issues that include whether to bet on growth or cyclicals and if inflation acceleration intensifies, said Edward Moya of Oanda in a report.

The Shanghai Composite Index gained 0.3% to 3,559.96, the Nikkei 225 in Tokyo added 0.8% to 28,807.95, and the Hang Seng in Hong Kong advanced 1.8% to 27,999.08. The Kospi in Seoul was 0.7% higher at 3,270.89 and Sydney’s S&P-ASX 200 added 0.4% to 7,361.90. New Zealand and Singapore also advanced while Bangkok and Jakarta dropped.

Investors were awaiting trade data from China.

On Wall Street, the S&P advanced to 4,384.63, the Dow Jones Industrial Average (DJIA) gained 0.4% to 34,996.18 and the Nasdaq composite was 0.2% higher at 14,733.24.

The indexes have hit multiple highs lately in choppy trading.

Expectations for corporate profits are high as companies release quarterly results, led by Wall Street banks before earnings reports on Tuesday.

According to FactSet, corporate earnings are expected to surge 64% from a year earlier, which would be the biggest year-over-year (YOY) growth since 2009 following the global financial crisis.

Stocks have risen sharply in the past year on expectations that corporate profits would rebound once the pandemic ends. Without strong profits, it will be increasingly difficult for investors to justify these high stock prices and record market valuations.

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