Asian stocks rose to their highest levels in nearly three months on Tuesday and turned positive for the year, boosted by strong European bank results and a sign the US economy was stronger than expected.
The firm tone followed a strong Wall Street performance.
"A combination of solid earnings from HSBC and BNP Paribas and strong US manufacturing data has significantly eased economic worries and boosted appetite for stocks," said Lee Sun-yeb, a market analyst at Shinhan Investment Corporation.
* Earnings from major European banks BNP Paribas and HSBC topped forecasts as bad debts fell sharply. That added to already positive sentiment after the release last month of a report on the health of European banks.
* The US manufacturing sector grew in July for a 12th straight month, an industry report showed on Monday. Although growth slowed, it was still stronger than had been expected.
* US stocks closed at their highest level in 10 weeks on Monday as the S&P 500 pierced key technical levels. Energy stocks jumped as the weakness of the dollar drew investors into crude futures, which rose 3 per cent .
* The MSCI Asia ex-Japan gained as much as 0.6 per cent to stand at its highest level since May 4, led by rises in materials and technology shares. It later edged off the highs to be up 0.2 per cent on the day and 18 per cent since hitting its 2010 lows in May. The index is 0.3 per cent above its closing 2009 level.
* Japan's Nikkei average rose 1.3 per cent in trade made cautious by concerns over how the yen's strength will impact exporters.
* US crude prices edged up from New York's closing levels to $81.40 per barrel after the front-month contract rose on Monday to a its highest level since May 5.
* The dollar was hovering near a three-month low against a basket of currencies on a per ception that the US economic recovery is faltering. Although manufacturing data showed continued expansion, a string of data has suggested economic growth is slowing, raising concerns among Fed policymakers.
* The Australian dollar fell 0.3 per cent to $0.9098 , backing off a three-month peak of $0.9146 hit on Monday, ahead of a Reserve Bank of Australia policy announcement at 0430 GMT (1000 IST). The central bank is not expected to change rates, but markets will scour its statement for clues on future policy action.
