HONG KONG – Asian stocks edged higher Monday as the Chinese premier's upbeat assessment of the world's third-largest economy soothed nerves ahead of key earnings reports from leading U.S. companies.
Many markets seesawed before heading modestly higher, led by Hong Kong and Shanghai stocks after Chinese Premier Wen Jiabao said Saturday the economy was doing "better than expected" as a massive stimulus package produces results.
Coupled with more pledges to pull the economy out its slump, the comments from Wen, also the nation's top economic official, gave investors more reason to hope China will heal sooner and help both Asian and overseas markets along the way.
Investors were also awaiting results that could test a growing belief that the world economy and banking system have turned a corner. Among the hundreds of U.S. companies due to report are Bank of America, Coca-Cola, Microsoft, IBM and McDonald's.
So far, rosier-than-expected earnings from financial giants like Citigroup and Goldman Sachs have buoyed optimism of a recovery and given further impetus to a six-week rally.
Still, with a number of markets already up more than 20 percent in less than two months, many are becoming wary of another bubble in the making and say any negative surprises could cause a bout of selling.
"Equities markets are beginning to be quite detached from the underlying economic fundamentals — once again," said Kirby Daley, senior strategist at Newedge Group in Hong Kong. "The worst is far from over."
In Japan, the Nikkei 225 stock average recouped morning losses to rise 17.17 points, or 0.2 percent, to 8,924.75 while South Korea also made up lost ground, rising 0.6 percent to 1,336.39. Taiwan's market was higher, though markets in Australia and Singapore retreated.
Wen's comments helped lift shares in China, with Shanghai's key index adding 1.7 percent to 2,547.54 while Hong Kong's Hang Seng climbed 1.1 percent to 15,774.26. Also helping their markets were Chinese airlines like Air China, which soared on reports they would raise ticket prices.
On Friday in New York, stocks closed marginally higher as earnings from Citigroup and General Electric surpassed the market's expectations.
The Dow Jones industrial average rose 5.90, or 0.1 percent, to 8,131.33. The Standard & Poor's 500 index added 4.30, or 0.5 percent, to 869.60,
U.S. futures pointed to lower open on Wall Street Monday. Dow futures fell 44 points, or 0.5 percent, to 8,040 and S&P 500 futures slipped 4.4, or 0.5 percent, to 862.10.
In oil, benchmark crude for May delivery fell 77 cents to $49.56 a barrel in Asian trade. The contract Friday rose 35 cents to settle at $50.33.
In currencies, the dollar eased to 98.97 yen from 99.13 yen, while the euro weakened to $1.2989 from $1.3040.