* MSCI Asia ex-Japan up 1.4 pct, hits 11-mth high
* Upbeat earnings lift Nikkei to 10-month peak
* Foreign investors pour more funds into Asian shares
* US Q2 GDP eyed for clues on recovery pace
(Repeats to more subscribers)
By Eric Burroughs
HONG KONG, July 31 (Reuters) - Asian stocks pushed higher
on Friday and were poised to score double-digit gains in July
as investors keep pouring funds on bets the region's growth
engine will lead the global economy out of recession.
South Korea's benchmark KOSPI index hit a one-year high and
Japan's Nikkei average hit a 10-month peak as upbeat corporate
earnings reports around the world have been viewed as more
evidence that companies are coping well and poised to benefit
from any recovery.
Shares of Sony Corp <6758.T> jumped 4.4 percent after it
posted a smaller-than-expected loss the previous day, even as
shares of Nintendo Co <7974.OS> slid more than 5 percent after
saying quarter profits fell due to slowing demand for its
popular Wii game console.
"Earnings for the April-June quarter have been stronger
than expected and there has been a fair number of upward
forecast revisions, all of which is improving sentiment and
keeping the market supported," said Yumi Nishimura, deputy
general manager in the investment advisory section at Daiwa
Securities SMBC in Tokyo.
Market players are looking ahead to U.S. data on the
economy's performance in the second quarter, due later in the
day. Some economists believe it could mark the end of the sharp
recession as signs point to growth have resumed in the second
half of the year.
Oil prices extended gains along with other commodities,
giving a boost to energy shares such as Sinopec Corp <0386.HK>.
The dollar and government bonds lost ground as investors
favoured risky assets, such as higher-yielding currencies and
equities.
Foreign investors are favouring emerging markets and Asia
in a big way, with inflows into Asian equity funds excluding
Japan totalling $1.6 billion in the week ending on Wednesday --
the biggest inflow among emerging market groups.
Japan has also seen revived foreign buying of stocks. Data
from the Ministry of Finance showed that foreign equity
purchases last week were the biggest in three months.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 1.4 percent to reach an 11-month high and
the highest level since just before the collapse of U.S.
investment bank Lehman Brothers.
For July the MSCI benchmark for Asia was up 11.8 percent,
scoring its fourth double-digit gain in the past five months on
China's economic rebound, upbeat elections in Indonesia and
India and spurred investment across the region.
The Shanghai Composite Index <> climbed for a second
day and settled down after Wednesday's 5 percent sell-off, a
slide that raised worries that the nearly 90 percent bull run
in Chinese shares could start to reverse.
Credit markets have also been on a tear higher.
The iTraxx index of spreads <ITAIG5Y=MP> on high-grade
companies in Asia ex-Japan has shrunk 54 basis points this
month to 132.5 basis points, the lowest since mid-2008 as
investors have also favoured corporate debt.
The dollar slipped as funds moved out of the safe-haven
U.S. currency. The dollar index dropped 0.3 percent to 79.012
<.DXY> and retreated back near a seven-month low hit earlier in
the week. The euro climbed 0.5 percent to $1.4130 <EUR=>, and
the dollar dipped 0.3 percent to 95.35 yen <JPY=>.
"Investors who trimmed risky positions following a sharp
fall in Shanghai shares are taking risks again," said Tsutomu
Soma, senior manager of foreign securities at Okasan Securities
in Tokyo.
Japanese government bonds fell further as stocks continued
their run higher. The benchmark 10-year yield <JP10YTN=JBTC>
rose 2 basis points to 1.405 percent to a one-month high, with
yields up 5.5 basis points on the month.
U.S. crude oil prices were up 54 cents to $67.48 a barrel
<CLc1>, while gold rose $4 an ounce to $937.30 <XAU=>.
(Additional reporting by Elaine Lies and Rika Otsuka in
Tokyo; Editing by Kazunori Takada)
