Investing.com - Asian Pacific shares are predicted to start the trading session on a high, riding the wave of Wall Street's favourable response to corporate forecasts that exceeded expectations.
By 10:30am AEDT (11:30pm GMT) S&P/ASX 200 saw a rise of 30.2 points or 0.4%, while futures for the Nikkei 225 also suggested an upward trend.
In the US, the Dow Jones Industrial Average experienced a 0.6% hike, while the S&P 500 and the Nasdaq Composite climbed by 0.7% and 0.9% respectively. Wall Street is hopeful that companies can overturn the downturn in profits experienced over the past three quarters, which have been a burden on stock valuations.
Recent erratic movements in government bonds have complicated investor predictions about when the Federal Reserve may reduce rates, causing unease in financial markets. However, the benchmark 10-year Treasury yield stabilized at 4.840% on Tuesday.
Investors are keeping a close eye on tech giants such as Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) as they consider whether to hold onto their stock investments or shift to ultra-secure US government bonds. Both companies saw gains on Tuesday, with Microsoft continuing its rally in after-hours trading due to better-than-projected earnings, while Alphabet experienced a slight dip.
Impressive tech earnings and projections have given equity investors hope for a more bullish year-end. Although the energy sector was the only one in the S&P 500 to not follow the upward trend on Tuesday, primarily due to falling oil prices, other sectors showed encouraging results.
Halliburton Company (NYSE:HAL), an oil-field services company, reported better-than-expected profits due to strong international drilling demand and slower-than-expected growth, even though its shares fell by 3.4%. Meanwhile, Chevron 's (NYSE:CVX) shares continued to slump following the announcement of its $53 billion purchase of oil producer Hess.
Approximately 81% of the 118 companies in the S&P 500 that reported results as of Tuesday morning exceeded analysts' estimates, according to data from Refinitiv. This is significantly above the average beat rate of 67% since 1994.
Key corporate forecasts on Tuesday also exceeded expectations. Scotch-tape producer 3M Company (NYSE:MMM) saw a 5.3% rise after it increased its earnings projections, while Coca-Cola Co (NYSE:KO) climbed 2.9% after similarly upgrading its forward-looking estimates. General Electric Company (NYSE:GE) leaped by 6.5% after it raised its outlook and announced plans to divest its power business in the spring.
Verizon Communications Inc (NYSE:VZ) was the biggest mover in the market with a 9.3% surge, leading the Dow and S&P 500 after the telecom giant announced it expected to generate an additional $1 billion in cash this year than previously anticipated.
In the commodity markets, Brent crude oil fell 2.0% overnight, while gold remained steady at US$1,970.98. The Australian dollar, along with several other Asian currencies, remained steady as the US dollar index lifted.
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Chinese shares ended on a high, with the benchmark Shanghai Composite Index breaking a four-session losing streak. The index rose 0.8% to 2962.24, while the Shenzhen Composite Index gained 1.4% and the tech-heavy Chinext Price index added 0.85%.
In contrast, Hong Kong shares hit their lowest closing level in 11 months, with the benchmark Hang Seng Index falling 1.05% to 16991.53. The Hang Seng Tech Index declined 1.1%.
Japanese stocks ended higher, led by tech and retail shares, as concerns about borrowing costs receded for now. The Nikkei 225 rose 0.2% to 31062.35.
European stocks mostly rose as investors shrugged off pessimistic economic data, with the STOXX 600 gaining 1.9%, the DAX up 0.5%, and the CAC 40 climbing 0.6%. Meanwhile, the FTSE 100 closed up 0.2%, with Rio Tinto PLC (LON:RIO) emerging as the session's highest riser, followed by AstraZeneca PLC (LON:AZN) and United Utilities Group PLC (LON:UU).