* Asia shares up 0.4 pct on upbeat earnings, Shanghai
outperforms
* Credit markets gain with stocks, spreads at post-Lehman
low
* Dollar index stuck near 7-wk low, underpins commodities
By Eric Burroughs
HONG KONG, July 22 (Reuters) - Asian shares inched up to a
10-month peak on Wednesday, but gains were kept in check as
investors booked profits in the belief that the run in stocks
had become overstretched.
The dollar was stuck near a seven-week low and government
bond yields edged higher as portfolio managers kept shifting
funds away from safe-haven assets, taking heart from the slew
of upbeat corporate earnings showing economic recovery
spreading to bottom lines.
Federal Reserve Chairman Ben Bernanke also reassured
investors that the central bank was not about to tighten its
ultra-loose monetary policy anytime soon in the first of his
two days of Congressional testimony. []
"We have had a pretty good run-up, and any attempts to
rally further would be met by profit taking," said Ben Potter,
a research analyst at IG Markets Ltd in Sydney.
Invetsors have tended to look past some of the negatives
from the earnings season, such as declining revenue at a
variety of companies, to focus on the better-than-expected
profits and upbeat outlooks.
Apple <AAPL.O> was the latest to post surprisingly good
profits on strong sales of Mac computers and iPhones, giving
its stock a lift in after-hours trade that could help the
Nasdaq extend its longest winning streak in 12 years.
[]
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> edged up 0.3 percent and reached its highest
level since late September.
QUICK OR GRADUAL RECOVERY?
The Shanghai Composite <> performed better than other
Asian indexes with a gain of 1.8 percent.
Companies tied to renewable energy such as Linuo Solar
<600885.SS> jumped by the 10 percent daily limit after Beijing
announced long-awaited subsidies for utility-scale solar power
projects on Tuesday. []
Japan's Nikkei <> gained nearly 1 percent, with shares
of semiconductor wafers rising on a report of higher prices.
"At this point, I think most people are expecting an
economic recovery. The issue now is just whether they think it
will happen quickly or gradually," said Tomomi Yamashita, a
fund manager at Shinkin Asset Management in Tokyo.
The boost to risky assets has made investors more
comfortable holding the corporate debt, driving spreads on
benchmark credit indexes to their lowest levels since the
collapse of Lehman Brothers last September.
Asia's benchmark iTraxx index of high-grade corporate
credit <ITAIG5Y=MP> was quoted at a mid-point of 148 basis
points by interdealer broker GFI, its tightest level since
August and well off this year's peak near 465 basis points
reached in March.
In currencies, the dollar index was little changed at
78.906 <.DXY> after extending its slide the previous day to a
seven-week low of 78.591. The euro dipped 0.2 percent to
$1.4195 <EUR=> but held near a one-month high struck on
Tuesday.
The dollar woes have underpinned the rebound in gold and
commodity prices. Gold edged up $1.30 an ounce to $949.45
<XAU=>, just below a five-week high struck last week. U.S.
crude oil dipped 40 cents a barrel to $65.21 <CLc1>.
(Additional reporting by Elaine Lies in TOKYO and Sonali Paul
in SYDNEY; Editing by Jan Dahinten)
