Asia markets gain as earnings reports loom

Asian markets advanced on Tuesday, with Beijing's planned stimulus measures pushing up Chinese shares as investors turn their attention to this week's release of corporate earnings reports.

Tensions persist over a potential global trade war, however, with European Commission President Jean-Claude Juncker heading to Washington on Wednesday to meet with President Donald Trump and try to avert an escalation of tit-for-tat tariffs.

The US leader is already embroiled in a messy trade dispute with China and Europe, while negotiations with Canada and Mexico to revamp the North American Free Trade Agreement have stalled.

Beijing signalled it would shift to a looser fiscal policy to shield the world's second-largest economy from the worsening trade row with Washington, prompting Chinese shares, buffeted for months by the spat, to make gains.

Shanghai jumped 1.6% while Hong Kong advanced 1.4 %. The gains were mirrored across Asia, with Tokyo and Seoul both rising 0.5% and Sydney adding 0.6%.

Chinese policymakers have had to juggle competing priorities: transitioning the nation's economy to an expected era of slower growth, while also cleansing the financial system of dodgy credit.

That balancing act has become even more tricky as China's export engine braces for the impact of US tariffs on Chinese goods, imposed by Trump to punish Beijing for "unfair" trade practices.

Chinese Premier Li Keqiang stressed the government would accelerate plans to reduce taxes by more than 1.1 trillion yuan ($160bn) and to issue 1.35 trillion yuan in local government special bonds for infrastructure.

Beijing was widely expected to ease up on its credit clampdown - a campaign that has also weighed on Chinese stocks - in light of the new Trump-era realities.

Earnings in focus

Focus has also shifted to a round of earnings reports expected this week from companies ranging from British pharma giant GlaxoSmithKline to Japanese automaker Mitsubishi Motors to US aerospace titan Boeing.

Tech firms Amazon and Facebook will also report their results later in the week.

In Europe, shares in French car giant PSA - owner of Peugeot - surged 9.5% on strong earnings.

Paris opened 0.4% higher while London gained 0.2% and Frankfurt advanced 0.3%.

Oil markets were offered a lift on Monday when Trump and Iranian President Hassan Rouhani engaged in a round of furious sabre-rattling.

Trump's tweet - all in capital letters, the digital equivalent of shouting - came after Rouhani warned the US leader on Sunday not to "play with the lion's tail", saying that conflict with Iran would trigger the "mother of all wars".

Trump responded:

But the boost was short-lived, with oversupply fears returning to oil markets.

"The broader macro picture continues to loom large as Saudi Arabia and Russia are expanding production to offset the loss of Iran production", said Stephen Innes, head of Asia-Pacific trading at Oanda trading group.

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