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Most Asian markets climbed on Tuesday on optimism about U.S. lawmakers would be able to reach an agreement to raise the nation’s debt ceiling before the looming Aug. 2 deadline.
The day’s broad regional gains came even after U.S. President Barack Obama and House Speaker John Boehner gave back-to-back speeches which indicated little progress toward a deal.
Indian stocks were a notable exception, taking a tumble after the central bank stunned markets by raising interest rates by a higher-than-expected half-percentage-point.
The Sensex lost 1.87%.
Financial stocks in Asia were broadly higher, recouping some of their losses from the previous session. Mitsubishi UFJ Financial Group Inc. rose 1.8% in Tokyo, Macquarie Group Ltd. climbed 1.5% in Sydney, and Shinhan Financial Group Co. advanced 2.5% in Seoul.
Hong Kong’s Hang Seng Index rose by 1.25% to 22,572.08;
South Korea’s Kospi gained by 0.66% to 2,168.70;
Australia’s S&P/ASX 200 advanced by 0.95% to 4,573.3;
Taiwan's Taiex added 1.3% to 8,794.24;
Japan’s Nikkei Stock Average ended the session higher by 0.48% at 10,097.72.
China’s Shanghai Composite rose by 0.53% at 2,703.03 followed Monday’s 3% tumble.
On Tuesday the major European markets closed the day mixed.
Oil and gas stocks were the main focus of attention in London Tuesday, as shares in BP PLC dropped after the firm missed earnings expectations, while BG Group PLC rallied on strong results.
Also the data on UK GDP was published on Tuesday. The British economy expanded by 0.2% in the second quarter, down from 0.5% in the first three months of the year, the Office for National Statistics said today. GDP would have grown by 0.7% without special factors such as Japan’s earthquake, an extra holiday for the royal wedding, and unusually warm weather in April, the statistics office said.
BG Group led the FTSE index with a gain of 4.3% as higher oil and gas prices, coupled with lower exploration costs, helped its second-quarter profit roughly double.
In contrast, shares in BP were among the biggest fallers on the main market and dropped by 2.6% becouse of lower production in the quarter left its earnings short of market expectations.
Pharmaceutical giant GlaxoSmithKline PLC rose by 0.7% after reporting second-quarter results in line with expectations and saying it will achieve more cost savings than previously expected.
Among other movers, Anglo American PLC gained by 1.2%. The group owns a 45% stake in diamond group De Beers SA, which said Tuesday that first-half underlying earnings more than doubled to $666 million from $304 million as diamond prices jumped around 35%.
Fashion firm Burberry Group PLC dropped 3.2% as analysts at Royal Bank of Scotland downgraded the company to hold from buy.
U.S. stocks struggled to advance late Tuesday, as several disappointing corporate earnings and ongoing worries over the U.S. debt ceiling weighed on investor sentiment.
The Dow was dragged lower by industrial conglomerate 3M (MMM, Fortune 500), whose shares sank 5%, after the company's quarterly results missed some analysts' expectations.
Despite beating expectations for quarterly earnings, shares of several companies fell - such Netflix (NFLX), UPS (UPS, Fortune 500) and Ford (F, Fortune 500) - as investors remain concerned on companies' outlooks.
Up until late Tuesday, investors were torn between two forces: an earnings season that has been generally positive, and concerns tied to the continuing battle over the United States' debt ceiling. Of the S&P 500 companies who have reported their quarterly results so far -- 75% have beaten expectations, according to data by Thomson Reuters.
Economy: New home sales dropped to an annual rate of 312,000, according to a report from the Commerce Department. The data was slightly worse than the 325,000 units economists had predicted.
The Conference Board said consumer confidence rose to a reading of 59.5 in July, up from 57.6 in June. Economists had expected consumer confidence to slide to 55.3.
Companies: Netflix (NFLX) shares sank 10% on Tuesday, making it the worst performer on the S&P 500 and Nasdaq. The video rental company spent much of its Monday earnings release discussing problems -- namely, a recent price hike that launched thousands of online complaints.
British oil company BP (BP) reported a profit of $5.6 billion -- a stark contrast to last year's second-quarter loss of $17.2 billion, when the company was struggling with the Gulf oil spill. Despite its profitable rebound, shares slid 1.5%.
Ford (F, Fortune 500) reported better than expected quarterly earnings of $2.4 billion, as sales climbed 13% to $35.5 billion. However, shares for the auto giant fell 2% in afternoon trading.
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