Australia

Australian shares are set to open lower today after a mixed session on Wall Street. Investors watched closely as many blue-chip companies reported earnings early Tuesday morning.

ASX futures were down 16 points or 0.22% as of 8:00am on Wednesday, pointing to a dip at the open.

US stock indices finished mixed on Tuesday, as a series of major companies reported earnings.

The Dow Jones Industrial Average closed 0.31% higher, after sliding earlier in the morning. The S&P 500 fell 0.07%, and the Nasdaq Composite was down 0.27%.

The S&P 500 had gained a decisive 1.2% the day before, to close at its highest since early December. Stocks had also rallied on Friday as investors bet that easing inflation would allow the Federal Reserve to slow the pace of its interest rate rises and potentially even cut rates later this year. Officials at the central bank are considering a smaller rate increase for the meeting next week, The Wall Street Journal reported.

In commodity markets, Brent crude oil dropped 2.28% to $US86.18 a barrel while gold added 0.32% to US$1,937.14

In local bond markets, the yield on both Australian 2 Year and 10 Year government bonds edged up, to 2.97% and 3.46% respectively. Overseas, the yield on 2 Year US Treasury notes decreased to 4.21% and the yield on 10 Year US Treasury notes fell to 3.46%.

The Australian dollar reached 70.45 US cents, up from its previous close of 70.26. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, dipped to 95.11.

Asia

Stock markets in China and Hong Kong are closed this week for the Lunar New Year holiday.

Japanese stocks ended higher, led by gains in technology and electronics shares, as an easing of the yen's recent strength brightened the earnings outlook. SoftBank Group gained 3.4% and Advantest climbed 3.1%. The Nikkei Stock Average rose 1.5% to 27299.19.

Indian stocks closed slightly higher, extending their recovery from losses late last week. The benchmark Sensex index rose 0.06% to settle at 60978.75. Auto makers led gains, with Tata Motors and Maruti Suzuki rising 3.3% each. IT-services providers further supported the market, as the sector built on Monday's strength. HCL Technologies added 1.5% and Tech Mahindra climbed 0.5%.

Europe

Most European stock indices fell on Tuesday despite upbeat eurozone economic data. The pan-European Stoxx Europe 600 dropped 0.17% and the German DAX shed 0.07% while the French CAC 40 gained 0.26%.

The FTSE 100 index of Great Britain closed 0.35% lower amid a pullback in European markets after mixed signs in Purchasing Managers Index (PMI) figures, with the UK industry showing a modest improvement while services disappointed, CMC chief market analyst Michael Hewson said in a note.

Among the top fallers, AstraZeneca shares were down 3.0%, chaining its sixth day in negative terrain, followed by grocer Tesco, down 2.4%. The conglomerate AB Foods fell 2% as it continues to see significant cost pressures despite reporting a 20% revenue increase for the 16 weeks leading up to January. Rolls-Royce led the gainers with a 3% rise, reaching its highest level in 11 months on the back of a rally in the travel and leisure sector after a positive note from Liberum on the airlines sector in Europe, Hewson added.

"The eurozone composite PMI exited contraction territory in January, rising from 49.3 to 50.2, beating expectations for a more moderate improvement," UniCredit economist Tullia Bucco wrote in a note. "This is the highest reading since June and suggests downside risks are receding."

North America

US stock indices finished mixed on Tuesday, as a series of major companies reported earnings.

The Dow Jones Industrial Average closed 0.31% higher, after sliding earlier in the morning. The S&P 500 fell 0.07%, and the Nasdaq Composite was down 0.27%.

The S&P 500 had gained a decisive 1.2% the day before, to close at its highest since early December. Stocks had also rallied on Friday as investors bet that easing inflation would allow the Federal Reserve to slow the pace of its interest rate rises and potentially even cut rates later this year. Officials at the central bank are considering a smaller rate increase for the meeting next week, The Wall Street Journal reported.

Earnings season is in full swing, with blue-chip companies such as General Electric, Johnson & Johnson, Danaher, and 3M all reporting ahead of the opening bell.

"The biggest thing this week would be earnings," said John Roe, head of multi-asset funds at Legal & General Investment Management.

So far, this earnings season has not seen major downgrades to corporate outlooks, or to consensus forecasts for the coming year, Mr. Roe said. "Everyone was worried that it could be an earnings season where we get revisions down, so when you get a season where nothing happens, you also get the idea that this pushes out the timing of a US recession," he said.

GE stock rose 1.2%. The industrial conglomerate reported revenue and profit that topped Wall Street forecasts, driven by strong demand for jet engines and power equipment.

Meanwhile, 3M dropped 6.2%, after the maker of Scotch tape and Post-it Notes reported a slowdown in sales and said it would eliminate 2,500 jobs.

"The market is looking for confirmation that this rally at the start of the year is sustainable. Every number counts," said Antonio Cavarero, head of investments at Generali Insurance Asset Management.