BEIJING (AP) – Most Asian stock markets advanced Monday following Wall Street’s gains ahead of quarterly earnings and testimony to the U.S. Congress by Federal Reserve chair Janet Yellen.
KEEPING SCORE: Hong Kong’s Hang Seng index rose 1 percent to 25,596.55 and Tokyo’s Nikkei 225 gained 0.6 percent to 20,055.53. The Shanghai Composite Index shed 0.1 percent 3,214.51 and Sydney’s S&P-ASX 200 added 0.7 percent to 5,741.80. Seoul’s Kospi advanced 0.1 percent to 2,383.16 and benchmarks in New Zealand, Singapore and the Philippines also rose. Taiwan declined.
WALL STREET: U.S. stocks climbed after hiring grew at a stronger pace in June. Technology and consumer-focused companies led the way. Technology companies jumped and retailers like Amazon and McDonald’s traded higher. The Standard & Poor’s 500 index picked up 0.6 percent to 2,425.18. The Dow Jones industrial average gained 0.4 percent to 21,414.34. The Nasdaq composite rose 1 percent to 6,153.08.
EARNINGS: Companies including Pepsi Co. and Delta Air Lines, Inc. are due to release earnings this week as U.S. companies begin their second-quarter reporting season. The market expects earnings per share growth of about 7 percent from companies in the S&P 500.
ANALYST’S TAKE: “It seems optimistic to feel we can replicate the 15 percent growth we saw in Q1, but at 7 percent this would still be the strongest rate of earnings growth since 2014,” said Chris Weston of IG in a report. “This is incredibly important because in the last two weeks or so we have markets changing and the catalyst for equities is shifting from a liquidity induced rally, to one where valuation and earnings growth will be the pre-eminent driver,” he said. “2018 is shaping up where value could do far better and not just to leverage to higher growth, high momentum names.”