Global stocks buoyant on upbeat earnings

Shares around the world gained on Tuesday, with upbeat corporate earnings buoying European shares, though investor concerns lingered over supply chain problems sparked by the coronavirus pandemic.

The broad Euro STOXX 600 hit its highest in seven weeks, adding 0.5 per cent, with German stocks adding 1 per cent. After a stellar quarter for US and British banks, Switzerland's UBS rose over 2 per cent on its highest quarterly profit since 2015 before giving up much of its gains, with the financial services sector climbing as much as 1 per cent.

Wall Street futures were up 0.4 per cent-0.6 per cent, with the earnings season reaching its peak and tech heavyweights including Apple Inc and Alphabet due to report later. Still, some analysts voiced caution over the impact of the Covid-19 pandemic on supply chains. Logitech International was among those hit, slumping 7.4 per cent after the computer keyboard, mouse and headset maker reported a steep fall in operating profit and difficulties securing enough semiconductor chips due to clogged up transport links and stuttering factory restarts by suppliers.

"Even though this has been a good earnings season in aggregate we are starting to see more companies with supply backlogs, hiring difficulties, and rising input prices that are eating into profits," Deutsche Bank analysts wrote. The MSCI world equity index, which tracks shares in 50 countries, added 0.2 per cent

Asian stocks earlier followed Wall Street's record highs overnight, before giving up most of their gains. Electric car maker Tesla Inc had boosted Wall Street after it joined the $1 trillion market capitalisation club.

MSCI's gauge of Asia-Pacific stocks outside Japan was up 0.3 per cent after briefly touching its highest in six weeks, following gains throughout October. Weighing on the market were Chinese property stocks, which extended losses as developer Modern Land defaulted on a payment, adding to worries about the effects of the debt crisis at China Evergrande Group.

Hong Kong-listed mainland property firms dropped 4.3 per cent while the mainland CSI 300 Real Estate Index fell 2.8 per cent. China has said it will roll out a pilot real estate tax in some regions, adding to existing concerns about real estate.

Some analysts voiced concern at the drag on global growth from a slowdown in the world's second biggest economy. Citi strategist Robert Buckland said the bank had cut its 2022 global real GDP growth forecast to 4.2 per cent from 4.4 per cent.

"The impact of the China slowdown is becoming increasingly evident in other Asian economies, but also in Europe where the Germany growth forecast has been cut from 5.2 per cent to 3.5 per cent," Buckland wrote, warning of "a deeper and longer Chinese slowdown". The US dollar index was slightly down at 93.731, with analysts expecting few major moves ahead of a slew of central bank meetings in coming days.

The European Central Bank and Bank of Japan are both set to hold monetary policy meetings on Thursday, though neither is expected to take major action on interest rates.