BEIJING/HONG KONG- Asian shares extended a global rally on Wednesday as strong US corporate earnings and the expected resumption of Russian gas supply to Europe helped lift sentiment and ease fears of a recession, while the dollar was mired near two-week lows.
MSCI’s broadest index of Asia-Pacific shares outside Japan surged 1.1 percent in early Asia trade, driven by a 1.5 percent jump in resources-heavy Australia, a 1.1 percent gain in South Korean shares and 1.5 percent jump in Hong Kong stocks.
Japan’s Nikkei surged 2.1 percent.
S&P 500 futures rose 0.3 percent, while Nasdaq futures firmed 0.4 percent.
US stocks closed with sharp gains on Tuesday as more companies joined big banks in reporting earnings that beat forecasts, offering respite to investors worried about higher inflation and Federal Reserve rate hikes denting the corporate bottomline.
Netflix Inc predicted that it would return to customer growth this quarter, after a smaller-than-expected drop in subscribers in the second quarter. Its shares gained 8 percent in after-hours trading.
The S&P 500 gained 2.8 percent while the tech-heavy Nasdaq Composite added 3.1 percent on Tuesday.
“In addition to a tech led rally in equities, the main news flow has been mostly about Europe which has lifted the euro back above 1.02 with core European yields also broadly higher,” said Rodrigo Catril, Senior FX Strategist at NAB, in a research note.
A Reuters report that the European Central Bank was weighing a 50-basis-point rate hike at its Thursday meeting, double the hike many market participants had priced in, helped the euro rack up its biggest one-day percentage gain in a month.
The single currency gained 0.1 percent to $1.0231 in early Asia trade on Wednesday.
Sources also told Reuters that Russian gas flows via the Nord Stream 1 pipeline are seen restarting on time on Thursday after the completion of scheduled maintenance, easing investors’ concerns about gas supply to Europe.
