By Wayne Cole
SYDNEY Asian shares edged higher on Tuesday while the dollar stood firm as upbeat U.S. earnings boosted Wall Street and factory surveys in the United States and Europe boasted their best readings so far this year.MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched up 0.1 percent with most components yet to trade. Australian stocks added 0.5 percent and futures NKc1 pointed to an opening gain of around 0.8 percent for Japan's Nikkei .N225 helped by a softening yen.Wall Street took encouragement from upbeat corporate results and the Dow .DJI rose 0.46 percent, while the S&P 500 .SPX gained 0.47 percent and the Nasdaq .IXIC or 0.91 percent.Over one third of U.S. companies have now reported and 80 percent have beaten market expectations. Another third of the S&P 500 components are scheduled to report earnings this week, including heavyweights Apple (AAPL.O), Alphabet (GOOGL.O), Amazon (AMZN.O) and Boeing (BA.N).
Merger and acquisition activity added an extra fizz in the wake of AT&T Inc's (T.N) $85.4 billion bid for Time Warner Inc (TWX.N), though the deal seemed destined to face stringent scrutiny from regulators.Aiding risk sentiment was the Markit survey of U.S. manufacturing which climbed to a one-year top of 53.2. Business activity in the euro zone also expanded at the fastest pace this year so far in October and firms raised prices at the sharpest rate in more than five years.The better news led investors to nudge up the probability of a December rate hike from the Federal Reserve to around 74 percent <0#FF:> and pressured Treasury prices.
It also lifted the U.S. dollar to a nine-month high against a basket of major currencies at 98.846 .DXY. The dollar remained firm on the yen at 104.28 JPY= while the euro struggled at $1.0870 EUR=.One mover was the Canadian dollar which rebounded from a seven-month low after Bank of Canada Governor Stephen Poloz said the decision on whether to cut interest rates again was not one to take lightly.
The comments countered recent speculation about an imminent easing and nudged the U.S. dollar down to C$1.3352 CAD=D4 from a peak at C$1.3398.In commodities, oil prices dipped on news of the impending restart of Britain's Buzzard oilfield and Iraq's wish to be exempted from OPEC production cuts.Brent LCOc1 was down 30 cents at $51.48 a barrel while U.S. crude CLc1 lost 9 cents to $50.43. (Reporting by Wayne Cole; Editing by Eric Meijer)
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Updated Date: Oct 25, 2016 05:45 AM