Market update: Asia advances cheered by Abe’s election win; European stocks steady this morning – 22.07.2013

Source: Hendserson Global Investors

US equities wavered on Friday. Disappointing earnings results from Microsoft and Google led the Nasdaq down 0.7%. However, the Dow Jones and the S&P 500 indices pared earlier losses to post their fourth straight week of gains. While the Dow Jones closed barely flat, the S&P 500 gained 0.2% on the day helped by General Electric among others who surpassed quarterly profit expectations.

Overnight in Asia, Japan’s Nikkei 225 rallied as the upper house elections on Sunday gave prime minister Abe’s coalition a majority control, which would make it easier for the government to push ahead with economic and growth reforms. The Nikkei closed up 0.5% but a rebound in the yen checked its advance. In China, banking stocks fell in reaction to Friday’s news that the People’s Bank of China intends to loosen interest rate controls through removal of floors for lending rates. Whilst this is a positive move that could support China’s economy and lower financing costs for businesses, it will likely lead to shrinking lending margins at the banks. European stocks were fairly steady in early trading, with the FTSE Eurofirst 300 and FTSE 100 rising 0.3% and 0.2% respectively at the time of writing, helped by upbeat results from UBS, Philips and Julius Baer.