TOKYO: Asian shares rose on Tuesday after Citigroup’s earnings and a fresh round of merger and acquisition activity in the U.S. healthcare sector lifted global stock prices.
Yet, with elevated prices on Wall Street and elsewhere relying substantially on support from low interest rates, many investors were now focusing on Federal Reserve Chair Janet Yellen’s testimony to a U.S. Senate committee.
“Markets expect her to stick to the stance that she will guide policy by watching the pace of recovery in the job market and the economy,” said Hirokazu Kabeya, senior strategist at Daiwa Securities.
European shares are expected to tick down after hefty gains on Monday, with French shares seen dipping as much as 0.2 percent and Britain’s FTSE and Germany’s DAX by 0.1 percent.
In Asia, Japan’s Nikkei average rose 0.7 percent while South Korea’s Kospi gained 1.0 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan
gained 0.2 percent.
Asian stock markets showed little reaction to stronger-than-expected new loan and money supply data for China.
Chinese banks gave 1.08 trillion yuan ($173.90 billion) of new loans in June, beating expectations of 915 billion.
The data, coming ahead of GDP and other numbers from China due on Wednesday, underscored the perception that the Chinese economy is stabilizing after a shaky start to the year but still needs more policy support to meet Beijing’s growth target.
U.S. stocks ended higher on Monday, with the Dow Jones industrial average hitting an intra day record, helped by Citigroup’s better-than-expected earnings and more deals in the healthcare sector.