* Stocks up as strong U.S. earnings offset slowdown fears
* Euro steadies, all eyes on European stress tests results
* Nikkei up 1.8 pct, poised to snap 5-day losing streak
(Repeats to more subscribers)
By Vikram S.Subhedar
HONG KONG, July 23 (Reuters) - Asian stocks rose on Friday
as strong earnings from economic bellwethers such as
Caterpillar tempered concerns about a global slowdown, while
the euro steadied ahead of European bank stress test results
later in the day.
Results of the tests on 91 European lenders are eagerly
awaited by markets whose scepticism about the sector has driven
up funding costs and weighed on share prices since Greece's
debt crisis triggered fears that the euro zone could unravel.
The euro <EUR=> jumped more than 1 percent against the
dollar on Thursday to around $1.29 and European bank stocks
rose across the board in a sign that investors are starting to
hope the worst is behind the region's financial industry.
But a lack of details about the terms of the tests and
earlier divisions among European Union members over how much
information will be made public has made investors wonder if
the assessments would be tough or transparent enough.
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Ironically, word of a few failures in fiscally weaker
countries such as Portugal or Spain could actually boost
confidence in the vigorousness of the process. The results are
expected around 1600 GMT.
Buoyed by robust U.S. earnings reports, Asian stocks
outside Japan <.MIAPJ0000PUS> rose 1.1 percent and looked set
to post a 2 percent gain on the week, with Asia ex-Japan equity
funds seeing strong inflows.
Commodity-related stocks <.MIAPJMT00PUS>, the top
performers in Asia this week, led gains after oil and metals
prices rose overnight. Shars of information technology and
healthcare companies also saw strong demand.
Japan's Nikkei <> looked poised to snap a 5-day losing
streak, rising 1.8 percent on U.S. earnings, short-covering and
a weaker yen.
"The market built on upbeat sentiment after European stocks
were helped by expectations that the stress test results
probably won't negatively impact markets, and there were also
good earnings announcements by U.S. companies," said Masaru
Hamasaki, senior strategist at Toyota Asset Management.
Major U.S. share indexes rose as much as 2.7 percent
overnight as robust quarterly results from construction and
mining equipment maker Caterpillar <CAT.N>, 3M <MMM.N> and
other U.S. multinationals suggested the global economy may be
on stronger footing than previously thought. []
A string of weak U.S. economic data in recent weeks and
worries that Europe's debt crisis could derail its already
fragile recovery have put heavy pressure on markets, but there
are signs that investors are slowly returning to riskier
assets.
Emerging markets equity funds retained some of their
momentum from the previous week, with Asia ex-Japan Equity
Funds taking in over $800 million for the second week running,
according to data from fund-tracking firm EPFR Global.
Crude oil futures <CLc1> steadied above $79 a barrel after
jumping to 11-week highs overnight as a potential storm
threatened production in the Gulf of Mexico.
Shanghai copper <SCFc3> also rose, chasing London which
climbed to near two-month peaks, spurred by a weaker dollar and
positive economic data on both sides of the Atlantic.
[]
(Editing by Kim Coghill)
