An investor drinks water as he looks at an electronic board showing stock information at a brokerage house in Haikou, Hainan province.
Asian stock markets reported their best weekly gains this month on speculation of further stimulus measures from China and the U.S., while better-than-expected earnings from U.S. companies also boosted sentiment.
Investors' focus remains on the outlook for more monetary policy easing after a slew of central banks around the world surprised the markets by cutting rates over the past several days. But the announcements failed to calm market jitters and raised concerns that the actions reflected policymakers' pessimistic outlook on their economies.
China will be in focus again in Asia as the slowdown in the second quarter and dovish comments by Premier Wen Jiabao raised expectations of a further reserve requirement ratio cut. The data on the July private sector manufacturing and the June industrial profits are to be released this week. Both readings will likely deteriorate further and boost odds of further easing.
South Korea is due to report second-quarter GDP data Thursday, which is likely to show a slowdown and come in below the consensus. Singapore's July inflation is likely to pick up while the CPI inflation in Vietnam is expected fall further in July.
"Next week will focus attention on the prospects for more policy easing. In China, we do expect a fairly imminent RRR cut and other pro-growth measures on the fiscal side. The slowdown in Q2 GDP data in Korea could support hopes for another cut next month," said a note from Credit Agricole.
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Meanwhile, economic data and corporate earnings from the U.S. will continue to weigh on the markets. Reports including the second-quarter GDP, new home sales and durable goods for the month of June will be released during the week.
A slew of companies, including Apple, Facebook, Ford, Texas Instruments and Amazon, will report their quarterly earnings in the coming week. Apple is due to release its third quarter earnings Tuesday and is expected to exceed its already high expectations, which could trigger a rally in the tech sector. Apple is expected to report a third-quarter net profit of $10.38 per share, up from $7.79 per share in the same period a year ago.
"Apple can drive the whole (tech) group. There's a huge psychological component as it relates directly to Apple. If they just blast numbers like they did last quarter, then obviously the perception will be everybody else did pretty good and Apple did fabulous," Daniel Morgan, who helps manage about $3.5 billion at Synovus Trust Company in Atlanta, told Reuters.
In Japan, the consumer price index and merchandise trade for June are due to be released during the week. The merchandise trade deficit is expected to be narrowed to 590.0 billion yen from 657.2 billion in May, while the consumer price index is likely to be zero percent on an annual basis.
Meanwhile, the Indian stock markets are expected to experience volatility as a slew of blue chip companies, including Wipro, Larsen &Toubro, Bharat Heavy Electricals, Hindustan Unilever, Power Grid Corporation, Cairn India and HCL Technologies, are due to release their quarterly earnings next week.
Market participants are also waiting to see whether the government will announce policy reforms, such as an increase in diesel prices or allowing more foreign investment in the aviation and retail sectors after the presidential election results are out Sunday, reported Reuters.
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