Shares expand

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SYDNEY – Asian shares pulled ahead as corporate earnings and a ceasefire in northern Syria helped prop up sentiment, though the backdrop of trade and Brexit uncertainties was enough to prevent a decisive shift towards riskier assets.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent with Japan’s Nikkei rising 0.66 percent to a one-year high. Australian shares climbed 0.5 percent while South Korea’s KOSPI eased 0.1 percent.

South Korea earlier reported third quarter growth slightly below expectations, while a private survey showed Japanese factory activity shrank at the fastest pace in over three years in October, hurt by slowing global demand and trade frictions.

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Chinese shares opened higher with the blue-chip index rising 0.37 percent.

Risk appetite was also aided after US President Donald Trump lifted sanctions on Turkey saying a ceasefire in northern Syria was now permanent.

“US-China trade friction seems to be entering a truce, a no-deal Brexit looks increasingly likely to be avoided, and the US’s posture against Turkey appears to have been softening,” JPMorgan analyst Tohru Sasaki wrote in a note pointing to reasons for a rally in Nikkei.
JPMorgan expects gains in the Japanese index to extend into year-end led by share buy-backs.

On Wall Street overnight, the Dow and the Nasdaq added 0.2 percent each while the S&P gained 0.3 percent.

Telsa shares jumped 21 percent in after-hours trading following a surprise third quarter profit. Microsoft also posted forecast-beating profit and revenue numbers after the closing bell though the outlook was darkened by slower-than-expected take-up of its Azure cloud services.

Earlier, shares of US industrial bellwethers Boeing Co. and Caterpillar Inc ended about 1 percent higher each despite big earnings misses.

RBC Capital Markets’ chief economist Tom Porcelli pointed to consistently alarming headlines since the first quarter of 2018 suggesting poor Caterpillar earnings meant a recession was round the corner, though that has yet to transpire. — Reuters

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