SYDNEY- Asian shares advanced to one-week highs on Wednesday, led largely by strong US corporate earnings, although the mood remained cautious as the rapidly spreading Delta variant of the coronavirus clouds the global economic outlook.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.1 percent to the highest since July 26.
Japan’s Nikkei was in the red as were Chinese shares with the blue-chip index off 0.2 percent.
Australian shares were a touch firmer but sentiment was marred by an unabating rise in Delta infections in Sydney, the country’s biggest city.
Stronger-than-expected profits from US companies in recent weeks have ratcheted up already high Wall Street forecasts on how second-quarter earnings growth will look versus last year.
Close to 90 percent of companies listed on the S&P500 have reported positive earnings surprises for the second quarter, according to National Australia Bank economist Tapas Strickland.
Analysts, however, cautioned about the rise in Delta infections of the coronavirus in Asia, with Chinese media reporting 31 provincial regions have warned residents against unnecessary travel in light of recent outbreaks.
China on Wednesday reported 96 new confirmed coronavirus cases for Aug. 3, of which 71 were locally transmitted.
“Wuhan has begun city-wide testing in an eerie echo to the original COVID-19 outbreak,” Strickland said.
“While China’s resolve to control outbreaks has been well illustrated, markets will continue to watch the outbreak given the high transmissibility of the Delta variant. There are also concerns China’s domestic vaccines are less effective against the Delta variant.” – Reuters
