Asian shares soar to 1-month high on earnings, Fed optimism
By Hideyuki Sano
TOKYO (Reuters) – Asian shares climbed to one-month highs on Wednesday, steered by a robust Wall Street on optimism over corporate earnings and prospects the U.S. Federal Reserve will reaffirm its willingness to wait for an extended period before raising interest rates.
U.S. stocks rose more than 1 percent on Tuesday, with the S&P 500 coming less than two percent below its record peak set last month.
The Fed is widely expected to announce on Wednesday it will end its two-year-old bond-buying stimulus, known as quantitative easing three, as the U.S. economy continues to gather momentum.
Still Fed officials have also stressed they are in no hurry to take policy tightening a step further by raising rates from near zero levels due to subdued inflation and the poor quality of a recovery in labour markets.
With 245 companies in the S&P 500 having reported earnings so far for the third quarter, 73.5 percent have beat analyst expectations, according to Thomson Reuters. Over the past four quarters, 67 percent of companies have beat estimates.
Still, Facebook Inc shocked investors after the market close on Tuesday, warning of a dramatic increase in spending in 2015 and projected a slowdown in revenue growth this quarter, falling 8.2 percent in after hours trading.
U.S. economic data published on Tuesday was mixed. But a rise in consumer confidence to a seven-year high gave stock bulls enough reason to maintain their optimism on the economic recovery.
Separate data showed new orders for capital goods by U.S. businesses fell the most in eight months in September.
The data dented the U.S. dollar against a broad range of currencies.
The euro rose to a one-week high of $1.2765 on Tuesday and last stood at $1.2738 in Asian trade. The Canadian dollar climbed to its highest level in more than two weeks against the U.S. dollar of C$1.1165.
The dollar traded at 108.18 yen, not far from a two-week high of 108.36 yen hit last week. It had a muted reaction to data showing Japanese industrial output rose 2.7 percent in September, slightly above market expectations.