Asian stocks rose and neared 22-month highs on Thursday after U.S. tech and financial firms beat earnings forecasts and China's accelerating economic growth underpinned hopes of a broad, global economic recovery.
A surprise move earlier in the week by Singapore's central bank to allow its currency to appreciate, a Moody's sovereign rating upgrade of South Korea and China's strong GDP numbers are all being seen as signals of Asia-led global economic growth.
In Europe also, shares were seen rising, adding to the previous session's rally.
Financial spreadbetters expected Britain's FTSE 100 <.FTSE> to open 15 to 16 points higher, Germany's DAX <.GDAXI> to open around 11 points higher, and France's CAC-40 <.FCHI> to open 3 to 4 points higher.
There's probably enough catalysts to keep us moving forward, assuming the earnings results are as solid as they're expected to be, said IG Markets analyst Cameron Peacock in Australia.
Oil rose past $86 on Thursday to within a dollar of 18-month highs as surging Chinese economic growth and a potential spike in demand.
Japanese stocks <.N225> rose 0.6 percent to close at a one-week high on the strong Chinese growth and U.S. earnings.
There were some concerns earlier this week about earnings of U.S. financial companies, including JPMorgan, and the market is now receiving a lift after the actual report and strong gains in financial shares overnight, said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.
The MSCI index of Asian shares outside Japan <.MIAPJ0000PUS> rose 0.58 percent to their highest level since June 2008 while the MSCI index of global stocks <.MIWD00000PUS> neared a 17-month high.
Shares of energy firms saw some of the strongest gains after oil prices were further boosted by a surprise drop in U.S. crude oil inventories and dollar weakness.
CHINA GROWTH QUICKENS
China's annual economic growth quickened in the first quarter to 11.9 percent, the fastest pace since 2007, benefiting from a low base last year and the momentum imparted by massive bank-financed stimulus.
China has largely led a global recovery amid persistent weakness in Western economies, and its voracious demand for raw materials has supported a rally in energy and commodity markets.
The data from Asia's second-largest economy, which beat analysts' expectations, added to speculation that Beijing may be preparing to loosen its tight grip on the yuan currency.
U.S. stocks rose for a fifth straight day overnight and more stocks hit a 52-week high on the New York Stock Exchange than on any day since the end of December 2003. The Nasdaq recorded its greatest number of 52-week highs since January 2004.
In Japan, a Reuters poll showed companies seemed to have shaken off their long gloomy spell as robust exports continue to drive the economy's recovery, though firms remained cautious.
Manufacturers' sentiment moved out of negative territory for the first time in two years thanks to solid exports to China and the rest of Asia, while service-sector firms were the least pessimistic since October 2008.
The dollar was steady against a basket of currencies <.DXY> but an increase in investors' appetite for riskier assets and speculation about a Chinese move on the yuan kept the undertone soft.
The dollar index was last at 80.217, but a break below 80 risks a test of support near 79.50/55--its March 17 low.
The Australian dollar was steady at $0.9346, from $0.9347 on Wednesday when it rallied nearly 0.7 percent. China is the single largest buyer of Australia's commodity exports.
Investors have already been trimming long positions in the U.S. dollar after Singapore effectively revalued its currency earlier this week, fanning expectations that more Asian countries will allow their currencies to appreciate.
Adding to the dollar's soft tone was Federal Reserve Chairman Ben Bernanke comments that U.S. interest rates will stay low for some time, reducing its yield appeal.
The dollar edged up against the yen to 93.31 yen, from 93.19 yen late in New York.
The euro was slightly weaker at $1.3643, as skepticism increased over a EU-IMF bailout package for Greece.