Asian stocks climb as strong earnings buoy Wall Street

Asian stocks experienced a rise in early trading on Wednesday, as Wall Street gained and bonds stabilized. The MSCI's Asia-Pacific index outside Japan gained 1.5%, driven by a 4% increase for Korean shares, while Japan's Nikkei 225 climbed 1.3%. S&P 500 e-mini futures rose 0.3%. Regional stocks have stabilized since a sharp sell-off last week but have traded within a tight range since then.

On Wall Street, stocks showed a mild positive trend, pushing the S&P 500 0.3% higher as oil prices and Treasury yields eased. Of the 13% of S&P 500 companies that have reported earnings so far, 86% have beaten estimates. Global equities were mixed, with US markets buoyed by strong earnings, but concerns about AI trade and high oil and borrowing costs weighed on other regions.

Westpac analysts noted that oil prices fell on unconfirmed reports of renewed peace negotiations, only to rebound after those reports were denied. Meanwhile, French stocks fell as fears persisted over the government's plans to deploy troops to quell upcoming protests. The French 10-year OAT yield increased by 2.7 basis points to 4.94%, slightly widening the yield differential to 153.1 basis points with the German 10-year bund.

Brent crude rose 1.1% to $110.03 a barrel, extending gains after touching a five-month high on a volatile Tuesday as traders assessed a meeting between Iran's president and Pakistan's army chief and ongoing Houthi attacks in Saudi Arabia. The yen weakened 0.1% against the dollar to 158.33 yen following Japan's September exports rising 16.7% year-over-year, surpassing expectations.

Strong demand for semiconductors and AI-related products helped offset weaknesses in other sectors. According to a Reuters poll, most economists believe the Bank of Japan will not raise rates on October 30 before a 25-basis-point increase in December, followed by quarterly hikes. For the Federal Reserve, economists think the group will skip a rate hike at its meeting on October 28 before raising rates in December, with Fed funds futures suggesting an 83% chance of a hold.

The US 10-year Treasury bond yield increased by 1 basis point to 5.123%. In emerging markets, traders await a decision from Indonesia's central bank amid efforts to curb the rupiah's decline following an MSCI warning that it may exclude the country's stocks from its major benchmarks.