* Rising commodities help Asia stocks advance
* Dollar resilient despite drooping U.S. yields
* Earnings outlook for China stocks bright
* Japan shares in focus ahead of Abe-Trump summit
* European shares seen opening slightly higher
By Saikat Chatterjee
HONG KONG, Feb 9 Asian shares climbed to their
highest in more than 18 months on Thursday, as investors grew
more confident about China while the dollar slightly firmed in
the wake of growing concerns over political instability in
MSCI's broadest index of Asia-Pacific shares outside Japan
gained 0.3 percent to their highest since July
2015 with Hong Kong, Taiwan and China
among the region's best performing markets.
European stocks are set to follow Asia's cues, with
spread-betters expecting a rise of up to 0.1 percent in
Britain's FTSE, 0.2 percent in Germany's DAX
and 0.3 percent in France's CAC.
"In China we have an overweight view on equities as we see
improved corporate earnings outlook with the Chinese PPI
(producer price index) turning around from deflation trend,"
said Fan Cheuk Wan, head of investment strategy for Asia at HSBC
It also has overweight recommendation on India and
An ongoing rally in commodity prices led by copper and iron
ore, along with gentle policy tightening by Beijing via money
market rates, has led to a more optimistic view of Chinese
corporate earnings, analysts said.
Earnings growth for MSCI China is expected at nearly 15
percent over the next 12 months, slightly ahead of 13 percent
projected for companies in MSCI Asia outside Japan, according to
Thomson Reuters data.
Pictet Asset Management has cut its exposure to U.S. markets
due to expensive valuations, and has turned bullish on emerging
markets in Asia, citing strong correlations with commodity
In other markets, New Zealand stocks rose after the
central bank signalled that a further cut in interest rates was
no longer likely while Japanese shares were in focus before a
meeting between U.S. President Donald Trump and Japan's Prime
Minister Shinzo Abe on Friday.
Abe will propose a new cabinet level framework for
U.S.-Japan talks on trade, security and macroeconomic issues,
including currencies, a Japanese government official involved in
planning the summit in Washington said.
"Trade and defense will be in focus," said Norihiro Fujito,
a senior investment strategist at Mitsubishi UFJ Morgan Stanley
Securities. "We need to see if anything is said that has an
effect on currencies, or on specific companies."
In commodities, copper stepped back after a sharp
gain the previous day as the world's top two mines said strikes
and permit delays would force them to cut output.
Helping sentiment was a recent pick-up in China's producer
price index to its highest levels since September 2011. Copper
prices are up 27 percent since late October.
Oil prices stabilised on Thursday, boosted by an unexpected
draw in U.S. gasoline inventories. Brent crude futures
was trading at $55.45 per barrel, up 0.5 percent.
However, bubbling political concerns, including a strong
showing by far-right candidate Marine Le Pen in France's
presidential race, have pushed up premiums demanded by investors
to buy French debt over comparable bonds and pushed the yen and
U.S. Treasuries higher.
Uncertainty translated into another day of gains for bonds,
with 10-year U.S. benchmark bond yields declining
for a third consecutive day to 2.34 percent, the lowest level in
three weeks and retracing one-third of its rise since Trump's
victory in early November.
The dollar bounced after the previous day's drop, but
falling yields are set to limit the greenback's gains.
Against a broad trade-weighted basket of its rivals,
the dollar was trading at 100.39 compared to a level of 99.30
last week. The Japanese yen also held its ground thanks
to a broad rush to safety.
(Additional reporting by Yoshifumi Takemoto in TOKYO; Editing
by Jacqueline Wong and Richard Borsuk)