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Asian shares rally on earnings optimism, trade deals

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Alphabet beats estimates, Tesla posts worst sales decline

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decade

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U.S. and EU nearing trade deal with 15% tariffs on imports

By Rocky Swift

TOKYO, July 24 (Reuters) - Shares in Asia rallied and

the Australian dollar hit an eight-month high on Thursday as

optimism over earnings and trade supported demand for higher

yielding assets.

Tokyo's broad Topix gauge of shares hit an all-time high,

following new records on Wall Street overnight, after a trade

pact between Japan and the U.S. stoked speculation more deals

would appear soon to head off sweeping tariffs. Nasdaq and S&P

futures rose after results by Google parent Alphabet beat

estimates to kick off the "Magnificent Seven" earnings season.

The U.S. has also reached deals with the Philippines and

Indonesia and an agreement with the European Union is also

expected.

"Worst case concerns about tariffs in the U.S. are probably

dissipating to some degree at the moment, but nonetheless,

tariffs are going up and that is a hurdle for consumers," Brian

Martin, ANZ's head of G3 economics, said in a podcast.

The EU and U.S. are closing in a trade deal that would

impose 15% tariffs on European imports, while waiving duties on

some items, according to officials from the European Commission.

Meanwhile, Treasury Secretary Scott Bessent said U.S. and

Chinese officials will meet in Stockholm next week.

Second-quarter earnings season is underway in the U.S., with

23% of the companies in the S&P 500 having reported. Of those,

85% have beaten Wall Street expectations, according to LSEG

data.

Results from Magnificent Seven members, whose results have

powered indexes to previous peaks, are in the spotlight for

guidance on spending and returns surrounding artificial

intelligence (AI).

Alphabet strongly beat estimates and cited massive

demand for its cloud computing services as it hiked its capital

spending plans. But electric car maker Tesla posted its

worst quarterly sales decline in more than a decade and profit

that trailed analyst targets.

MSCI's broadest index of Asia-Pacific shares outside Japan

was up 0.3%. Japan's Topix surged for a second

day, rising 1.4% to surpass its previous all-time high reached

last year.

The Australian dollar, a common proxy for risk sentiment,

fetched $0.66, just off $0.6604 hit earlier, which was

the highest since November 2024. The U.S. dollar dropped 0.1% to

146.38 yen.

U.S. crude climbed 0.4% to $65.5 a barrel. Spot gold

was traded at $3,390.84 per ounce, up 0.1%.

In early trades, pan-region Euro Stoxx 50 futures

shot up 1.3% at 5,435, while German DAX futures were up

1.3%.

U.S. stock futures, the S&P 500 e-minis, were up

0.13% and Nasdaq contracts climbed 0.4%.

(Editing by Sam Holmes)