Asia shares up on China strength

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    SYDNEY/HONG KONG- Asian shares climbed on Tuesday as investors wagered China’s economic strength would help underpin growth in the region, even as pandemic lockdowns threatened to lengthen the road to recovery in the West.

    Data out on Monday had confirmed the world’s second-largest economy was one of the few to grow over 2020 and actually picked up speed as the year closed.

    MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.98 percent, to be a whisker from record highs. Japan’s Nikkei bounced 1.5 percent, recovering all the losses suffered on Monday when caution had dominated markets.

    Australian shares climbed 1.25 percent as investors bet on news that Queensland state was set to lift virus-led restrictions and on prospects of better production numbers from local miners, helped by improved industrial activity in top consumer China. Chinese blue-chips remained flat while Hong Kong’s Hang Seng advanced 1.8 percent.

    US stocks also looked a little steadier as futures for the S&P 500 added 0.51 percent and NASDAQ futures 0.59 percent.

    Analysts at JPMorgan felt the coming earnings season could brighten the mood given the consensus in Europe was for a fall of 25 percent year-on-year, setting a very low bar.

    “The projected EPS growth in Europe now stands at the lows of the crisis which seems too conservative, and could likely lead to positive surprises over the reporting season,” they wrote in a note.

    The same could be true for the United States where results from BofA, Morgan Stanley, Goldman Sachs and Netflix are due this week.

    For now, dealers were cautious ahead of US President-elect Joe Biden’s inauguration given the risk of more mob violence, along with doubts about how much of his fiscal stimulus package will pass Republican opposition in Congress.

    Janet Yellen, Biden’s nominee to run the Treasury Department, will tell the Senate Finance Committee on Tuesday that the government must “act big” with the coronavirus relief plan.