Australia

Australian shares look set to rise following gains by the local mining sector and on Wall Street overnight as expectations of a strong second-quarter earnings season build.

The Australian futures index was up 9 points, or 0.15 points, to 6203, at 8.30am Sydney time. The Australian dollar is buying 73.98 US cents, up from 73.50 US cents yesterday. The Aussie dollar is now down more than 5 per cent since the start of the year when it traded above 80 US cents.

US-listed shares of BHP rose 2.3 per cent while Rio Tinto rose 1.3 per cent. Adding to momentum was BHP's bullish operational report yesterday morning as well as a bounce in the spot price of iron ore, a rebound in the price of oil and some selling respite for copper.

The Dow Jones Industrial Average closed up 0.32 per cent at 25,199 points. The S&P 500 advanced 0.2 per cent to 2815.62, while the Nasdaq dipped to 7854.44 after closing at a record yesterday.

Out today: June jobs data. NAB expects an increase of more than 10,000 jobs, down on consensus expectations of 16,500.

Asia

China stocks erased earlier gains and ended lower as a weaker yuan eroded prices of real estate developers and airliners.

The blue-chip CSI300 index fell 0.5 per cent to 3431.32 while the Shanghai Composite Index lost 0.4 per cent to 2787.26 points. About 12.10 billion shares were traded on the Shanghai exchange, about 93.3 per cent of the market's 30-day moving average of 12.97 billion shares a day.

In Hong Kong, the Hang Seng index fell 0.2 per cent, to 28,117.42, while the China Enterprises Index lost 0.1 per cent, to 10,578.46 points.

China's yuan hit a two-week low against a broadly stronger US dollar on Wednesday, breaching the key 6.7 per US dollar level.

Japan's Nikkei share average advanced to a more than one-month high as exporters such as carmakers and tech firms got a boost after the dollar hit a six-month high against the yen.

The Nikkei gained 0.4 per cent to end at 22,794.19, its highest closing point since June 15. The broader Topix gained 0.4 per cent to 1751.21.

Europe

European shares hit a one-month high, supported by currency weakness and a rally in tech stocks following well-received earnings updates and a record close for the Nasdaq.

A weaker pound helped Britain's top share index advance as company earnings took centre stage with Smiths Group suffering.

The blue-chip FTSE 100 index rose 0.7 per cent, in line with a broader rally among European stocks as the second quarter earnings season steps into gear.

Shares in easyJet were among the top gainers, up 2.1 per cent, after the budget airline upgraded its full-year guidance and said that profit could jump by as much as 45 per cent in 2018.

At the bottom of the index Smiths Group was down 7 per cent after the engineering company said it expected full-year revenue at its medical unit to drop due to new EU regulation.

Shares in Royal Mail slid 4.5 per cent as brokers cut their price targets for the company following Tuesday's trading update.

More broadly, miners and financial stocks gave the biggest boost to the index.

North America

The S&P 500 rose to its highest in more than five months and the Dow climbed for a fifth session on Wednesday as solid earnings boosted financial and industrial stocks and reinforced expectations for a strong second-quarter reporting season.

Upbeat earnings from railroad CSX Corp and airline United Continental helped lift the S&P 500 industrials index, which gained 1.1 per cent and was among the day’s best-performing sectors.

S&P 500 earnings are now expected to have increased 21.4 per cent in the second quarter, up from an estimate of 20.7 per cent on July 1. Of the 48 companies in the index that have reported so far, 87.5 percent posted earnings above analyst expectations

Oil prices have risen on expectations that demand for the commodity will increase, according to US government data.

 

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Morningstar with AAP and Reuters

Lex Hall is a Morningstar content editor, based in Sydney.

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