News Archive


Exclusive: OPEC’s head says Saudi, Russia statements ‘clear fog’ before November 30 meeting

LONDON (Reuters) – The fog has been cleared ahead of OPEC’s next policy meeting by Saudi Arabia and Russia declaring their support for extending a global deal to cut oil supplies for another nine months, OPEC’s secretary general told Reuters on Friday.

The Organization of the Petroleum Exporting Countries, plus Russia and nine other producers, have cut output by about 1.8 million barrels per day (bpd) to get rid of a supply glut. The pact runs to March 2018 and they are considering extending it.

Saudi Arabia’s Crown Prince Mohammad bin Salman said this week he was in favor of extending the term of the agreement for nine months, following on from similar remarks by Russian made by President Vladimir Putin on Oct 4.

“OPEC welcomes the clear guidance from the crown prince of Saudi Arabia on the need to achieve stable oil markets and sustain it beyond the first quarter of 2018,” OPEC’s Mohammad Barkindo told Reuters on the sidelines of a conference.

“Together with the statement expressed by President Putin this clears the fog on the way to Vienna on Nov. 30.”

“It’s always good to have this high-level feedback and guidance,” Barkindo added, when asked if the crown prince’s comments suggested a nine-month extension of the pact looked more likely.

Reuters reported on Oct. 18, citing OPEC sources, that producers were leaning towards extending the deal for nine months, though the decision could be postponed until early next year depending on the market.

Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.

The deal has supported the oil price, which on Friday reached $59.91 a barrel, the highest level since July 2015, but a backlog of stored oil has yet to be run down and prices are still at half the level of mid-2014.

The supply pact is aimed at reducing oil stocks in OECD industrialized countries to their five-year average, and the latest figures suggest producers are just over half way there.

Stock levels in September stood at about 160 million barrels above that average, according to OPEC data, down from January’s 340 million barrels above the five-year average.

Editing by Dmitry Zhdannikov, Greg Mahlich

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/PBytzUu0j5E/exclusive-opecs-head-says-saudi-russia-statements-clear-fog-before-november-30-meeting-idUSKBN1CW22Y

Wall Street loves electric cars, America loves trucks

DETROIT (Reuters) – Wall Street may love the shares of Silicon Valley electric carmaker Tesla Inc (TSLA.O), but Americans love big, fuel-thirsty trucks like Ford Motor Co’s (F.N) bestselling F-Series pickups and are paying ever higher prices to buy them.

The auto industry is at a crossroads, with the future of legacy automakers like Ford, General Motors Co (GM.N) and Fiat Chrysler Automobiles NV (FCHA.MI) uncertain as governments float proposals to ban internal combustion engines over the next two decades.

But in the present, consumer enthusiasm for trucks and sport utility vehicles is strong, especially in the United States. And that is providing Ford, GM and other established automakers with billions in cash to mount a challenge to Tesla.

Tesla has ambitions to boost annual sales to 500,000 vehicles a year. But it is wrestling with the sort of production problems that old-line automakers have largely put behind them, and has reported a net loss of $666.7 million through the first six months of 2017. Analysts expect the company to post a third quarter net loss of $380.4 million when it reports results next Wednesday.

Electric cars are money losers, which explains why global automakers have been slow to roll them out until now. But regulatory and consumer pressures are forcing established automakers to put more electric vehicles in their fleets over the next several years. In a cash-intensive industry, profits from pickups and SUVs may give them a competitive edge.

Ford said on Thursday that the average price of one of its F-series pickups rose $2,800 to an average $45,400 a truck in the third quarter. Sales of F-series trucks, which range from spartan work trucks to Platinum models with the features – and price tags – of a European luxury sedan, were up nearly 11 percent to 658,636 vehicles for the first nine months of this year.

GM has driven its share price up nearly 30 percent so far in 2017 as Chief Executive Mary Barra has talked up plans for putting self-driving, electric Chevrolet Bolts into ride services fleets within a few quarters.

Barra told investors on Tuesday improved profit margins on trucks were “one of the big drivers of the overall 8.3 percent margins” in the automaker’s North American business during the latest quarter.

GM has forecast free cash flow for the full year of roughly $6 billion. That is $1 billion less than forecast earlier this year, but strong enough to fund the company’s promise to develop 20 more electric vehicles by 2023 and send $7 billion back to shareholders.

GM, which emerged from a government funded bankruptcy eight years ago, now has $31.4 billion in available funds, including $17.3 billion in cash.

Ford lags behind GM in sales of battery electric models, but the company has said it will spend $5 billion developing battery electric and hybrid models. Ford’s new Chief Executive Officer Jim Hackett has said the plans include shifting $500 million into electric vehicle development from internal combustion projects.

Ford’s share price has been flat for the year as the No. 2 U.S. automaker ushered out former CEO Mark Fields. Still, it had $28 billion in cash and marketable securities as of Sept. 30.

Automakers also are becoming more confident they can make money on electric cars as battery costs come down.

Volkswagen AG’s (VOWG_p.DE) Audi brand is gearing up a fleet of electric models that the company expects will account for 25 percent of sales by 2025. In the United States, Audi plans to launch an electric SUV “in the sweet spot of the market” in 2019, Scott Keogh, head of Audi’s U.S. operations, told Reuters on Thursday.

Sales of Audi’s current lineup of SUVs “pay for what we want to do, which is lead the future,” Keogh said.

Renault SA (RENA.PA) Chief Executive Carlos Ghosn expressed confidence earlier this month that electric cars will become “a significant contributor to our performance.”

Tesla, by comparison to its legacy rivals, is market value rich, and cash poor. It had $3 billion in cash on hand at the end of the second quarter, and some analysts predict the automaker will have to raise more to cover the expected cash drain from the slow launch of the Model 3, which is lower priced than other Teslas and aimed at the market for $35,000 to $45,000 cars.

Tesla Chief Executive Elon Musk has outlined ambitious plans to expand its network of factories and service facilities, including potentially an assembly plant in China and up to three more electric battery Gigafactories. He told investors in July the company could sell more shares to fund that expansion.

“I‘m sure there will be some funding rounds that happen in the future,” he said.

Reporting by Joe White; Editing by Tom Brown

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/c2RXVCgZ7L0/wall-street-loves-electric-cars-america-loves-trucks-idUSKBN1CW0EZ

Exxon, Chevron third-quarter profits jump on rising commodity prices

HOUSTON (Reuters) – Exxon Mobil Corp and Chevron Corp, two of the world’s largest oil producers, said on Friday their quarterly profits each jumped about 50 percent, helped by rising commodity prices and lower costs.

The results show improving cash generation at both companies and in the industry in general, as investors continued to push for capital discipline throughout the energy sector.

“Cash is king, more and more,” said Brian Youngberg, an oil industry analyst with Edward Jones. “These companies are trying to be disciplined and show growth.”

At both companies, though, the results also reflected their dependence on commodity price swings to boost results. Neither company hedges oil or natural gas production.

At Exxon, results beat expectations despite a drag from Hurricane Harvey, which shuttered many U.S. Gulf Coast refineries during August.

Exxon’s shares fell 1.7 percent to $82.12 in morning trading.

At Chevron, a writedown of its Bangladesh operations and a drop in U.S. production weighed on results, which missed Wall Street expectations by a wide margin.

Chevron’s shares dropped 3.5 percent to $114.30 in morning trading.

French rival Total SA posted a 29 percent jump in third-quarter net profit as project ramp-ups and new investments lifted production.

Reporting by Ernest Scheyder; Editing by Jeffrey Benkoe

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/d_IC7iSU6_s/exxon-chevron-third-quarter-profits-jump-on-rising-commodity-prices-idUSKBN1CW1XT

No end in sight for tech giant share gains

(Reuters) – The world’s biggest technology companies are only getting bigger and, for now, Wall Street analysts think there’s no stopping them.

After reporting their results, Amazon, Microsoft, Alphabet and Intel added nearly $140 billion to their already massive combined market value on Friday, pushing the broader, tech-heavy Nasdaq Composite index .IXIC higher.

The companies together generated more than $100 billion in revenue in the September quarter, roughly 2 percent of United States’ national output.

Wall Street analysts scrambled to raise their price targets, with the most bullish pegging the companies’ stocks to rise between 21 percent and 47 percent in the next 12 months.

Google is “looking 20 years young,” said Morgan Stanley analyst Brian Nowak, who bumped up his price target on the stock by 9 percent to $1,150.

Amazon’s (AMZN.O) shares rose as much as 9 percent to a three-month high of $1,063.77. Microsoft (MSFT.O), Alphabet and Intel hit their highest in a decade.

“I expect markets to close the week on new record highs and a good portion of that should be attributed to the results that came from the tech companies,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

Amazon, which is winning business from older, big-box rivals, pleased investors with its transparency around Whole Foods, the premium grocer it recently bought.

“The Street went into third quarter earnings concerned about lack of disclosure around Whole Foods, and Amazon surprised to the upside here by breaking out Whole Foods contribution,” analysts at JP Morgan said.

Amazon’s shares, have risen 30 percent this year through Thursday’s close, as its AWS cloud business has stayed ahead of the competition.

Alphabet’s Google, a relatively smaller player in the cloud business, doesn’t break out revenue for Google Cloud Platform, but analysts estimate the business is growing very fast, complementing the company’s core advertising business.

The company’s stock is also relatively cheap, trading at 25.8 times forward 12-month earnings, despite its 30 percent run this year, excluding gains on Friday.

Microsoft Corp’s (MSFT.O) revenue rose the most in percentage terms in three years, underscoring the success of Chief Executive Satya Nadella’s turnaround strategy.

“Maybe one man has changed the culture of a large organization of over 120,000 people to enable a more creative and innovative mass focused on winning. These results sure seem to indicate so,” Jefferies analysts said.

Even old guard Intel Corp (INTC.O), which has been struggling with tepid growth, said revenue from its higher-margin data center business rose 7 percent, slightly beating expectations.

Reporting by Sweta Singh and Nivedita Bhattacharjee in Bengaluru; Writing by Sayantani Ghosh; Editing by Saumyadeb Chakrabarty

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/dDokRruvILw/no-end-in-sight-for-tech-giant-share-gains-idUSKBN1CW1LF

UBS cautions gains from wealthy client activity may not last

ZURICH (Reuters) – A pick-up at UBS’s (UBSG.S) core wealth management business is likely to weaken in the final months of 2017 as clients withdraw money to take part in tax amnesty programs, the world’s biggest private bank said.

UBS, which manages more than more than $2 trillion of the world’s wealth, saw continued improvement in the third quarter at its flagship business after a sluggish 2016 in which trading activity by rich clients hit a record low.

But finance chief Kirt Gardner said the fourth quarter, traditionally a seasonally slow three months, would be hit by an estimated 8 billion Swiss francs ($8 billion) in withdrawals as wealthy customers participate in government programs to declare offshore assets.

“We would expect that after the outflows in the fourth quarter you will see a drop-off in recurring revenue as a consequence and also reduction in margin,” he said in a call with analysts on Friday.

Gardner added UBS expected to see a recovery by the second quarter of 2018.

The bank, which also has investment banking, asset management, and Swiss retail and corporate divisions, said political and monetary policy uncertainty made it cautious too.

Third-quarter group net profit came in at 946 million francs, lagging the average forecast in a Reuters survey of six analysts but ahead of the Swiss bank’s own poll.

UBS shares were down 1.1 percent at 1120 GMT, a steeper drop than the European banking sector index .SX7P.

‘EXPECTING A LOT’

Net new money inflows – a closely watched indicator of future earnings in money management – totaled 4.6 billion francs at UBS’s international wealth management unit in the third quarter.

A bright spot for the unit was the contribution from Asia Pacific, a priority growth region for UBS which has seen its best ever year-to-date performance.

UBS’s North America brokerage business, which handles just over half the bank’s wealth management assets, saw net outflows of $2.3 billion, a blow to a business investors hope is on an upward curve.

“The market is expecting a lot from wealth management Americas because of the good economy and the rate increases,” said Mirabaud Securities Limited analyst Andreas Brun, who rates UBS’s stock “buy”.

The investment bank, which UBS has scaled back in recent years to free up resources for wealth management, saw adjusted pretax operating profit rise 2.9 percent to 352 million francs.

UBS’s common equity tier 1 (CET1) capital ratio, an important measure of balance sheet strength which UBS uses to help decide its dividend, rose to 13.7 percent from 13.5 percent in the second quarter. A drop in the second quarter CET1 ratio had been a source of concern for some investors.

However, Brun said pending legal cases and the uncertainty over future capital rules under Basel IV regulations meant it was too soon to draw conclusions for the dividend.

“That ratio is clearly good for all those who want to make a dividend story out of UBS,” said Brun. “For me it’s still too early to call it a dividend story.”

Additional reporting by Angelika Gruber; Editing by Michael Shields, Alexander Smith and Mark Potter

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/jOJN1OoOIgE/ubs-cautions-gains-from-wealthy-client-activity-may-not-last-idUSKBN1CW0QC

CVS-Aetna deal gets Wall Street thumbs up amid Amazon entry fears

(Reuters) – U.S. pharmacy operator CVS Health Corp’s move to buy health insurer Aetna Inc will broaden their reach in the industry and could spark another round of dealmaking in a sector dreading Amazon’s arrival, analysts said.

Shares of Aetna, the third-largest U.S. health insurer, were marginally up in early trading on Friday, after closing 12 percent higher on Thursday following reports of the deal. CVS Health was down about 1 percent.

CVS Health has made an offer to acquire No. 3 U.S. health insurer Aetna for more than $200 per share, or over $66 billion, making it the biggest deal of the year, Reuters reported on Thursday.

“A potential combination would diversify CVS profit streams ahead of an Amazon entry and set the stage for a new healthcare-retail delivery model,” Morgan Stanley analysts wrote in a note.

Amazon.com Inc’s speculated entry has hit shares of most drugstore operators on fears that the online retailer would leverage its vast ecommerce platform to take market share from traditional pharmacies.

“We believe CVS does need to respond to the potential threat and strike a different path,” Cowen Co analyst Charles Rhyee said in a note.

A deal would make CVS-Aetna a one-stop shop for customers’ health care needs – ranging from employer healthcare and government plans to managing benefits and running drug stores.

The vertical integration of retail pharmacy, PBM, and insurers fits with broader healthcare themes of expanded access, consumerism and cost reduction, Jefferies analysts said, adding that the deal chatter was not a complete surprise.

“It would address each company’s need for a fresh script.”

Some analysts said the deal could also trigger a wave of consolidation across the industry.

It could be a possible catalyst for higher health insurance sector valuation, BMO Capital Markets analyst Matt Bosch said, adding that WellCare Health Plans, Humana and Centene could be possible acquisition targets.

Aetna earlier this year closed the door on a deal with rival insurer Humana Inc after antitrust regulators said that the combination and a rival deal between Anthem Inc and Cigna Corp were anti-competitive.

Reporting by Ankur Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/FbHtTDew3L8/cvs-aetna-deal-gets-wall-street-thumbs-up-amid-amazon-entry-fears-idUSKBN1CW1YC

Place your bets for the Brexit rate hike

LONDON (Reuters) – To hear some economists talk, the Bank of England is about to make a big mistake – raise interest rates just as the economy heads into what could be a major storm.

If all goes as scripted, the bank will hike borrowing costs in the coming week for the first time in more than 10 years. But is the country really ready?

The consensus is for rise to 0.5 percent from 0.25 percent.

That 0.25 percent was where the BoE put Bank Rate just over a year ago, shortly after British voters elected to leave the European Union. And there’s the rub: the uncertainty the vote triggered is still there.

A Reuters poll published in the past week showed more than 70 percent of economists believe now is not the time to raise rates — though slightly more than that said it would happen anyway. [BOE/INT]

BoE Governor Mark Carney has made it clear a hike is in the offing, if not specifically saying at this coming meeting.

His concern is that low unemployment means Britain’s economy has little spare capacity and, accordingly, faces upward inflation pressure. Added to that are moves by other major central banks to rein in loose monetary policy, which could also push inflation higher by weakening the pound further.

The U.S. Federal Reserve has raised rates four times since late 2015 and is expected to do so again. The European Central Bank is cutting back on its bond buying, albeit gently.

So the BoE needs to concern itself with a pressured pound and high employment driving up inflation that, at 3 percent, is already well above target and the highest in the Group of Seven industrialized nations.

But ranged against that is huge political and economic uncertainty over how Britain’s withdrawal from the EU will play out.

Companies are unclear about what to plan for, ranging from little short-term change to a complete revolution in how they do business.

Consumers too are wary as, while Britain’s economy has by no means not gone over a cliff, it has had some wobbles.

Retail sales, for example, contracted on a monthly basis in September and were up 1.2 percent year-on-year versus 4.1 percent a year earlier.

Preliminary third-quarter growth figures in the past week, meanwhile, were slightly better than expected. But at 1.5 percent year-on-year they are well below pre-Brexit vote levels and significantly lag both the United States and the euro zone.

This had prompted some economists to suggest Carney and the BoE are about to “do a Trichet” — mirroring then-ECB president Jean-Claude Trichet’s raising of rates in 2008 just as the financial crisis was hitting.

Former BoE policymaker Danny Blanchflower – who voted against the BoE’s last hike in 2007, and has been regularly critical of suggestions to tighten policy since – has been scathing about the idea of a UK hike now.

“Nothing in data whatsoever says there should be a rate rise,” he tweeted.

(NOT) RISING SUN

The BoE is not the only central bank discussing policy. The Bank of Japan will announce its decisions on Tuesday.

Deflation — Japan’s biggest economic problem for much of the past 20 years — is over, but inflation is far from entrenched, limping along at just 0.7 percent year-on-year.

The economy too is somewhat off the pace, with the International Monetary Fund predicting 1.5 percent growth this year, though that is an improvement from 2016.

The biggest issue among economists with regard to the BoJ is whether it should reveal its plans to exit its ultra-loose monetary policy.

“We are anticipating few major changes in monetary policy,” Katsunori Kitakura, lead strategist at SuMi TRUST, wrote in a note. “The medium-term outlook for the Japanese economy is largely unchanged since the last policy meeting so the BoJ is likely to maintain the status quo.”

Underlining this, Reuters polls suggest the BoJ won’t start rolling back its monetary stimulus until late next year at the earliest — the sort of unclouded policy outlook that the BoE’s Carney might arguably have cause to envy before the week is out.

Reporting by Jeremy Gaunt; editing by John Stonestreet

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/f92oHBVcwhk/place-your-bets-for-the-brexit-rate-hike-idUSKBN1CW1RM

Cloud computing drives massive growth for big U.S. tech firms

SAN FRANCISCO (Reuters) – Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O), Alphabet Corp’s (GOOGL.O) Google and Intel Corp (INTC.O) are all putting their chips on the cloud computing business, and it is booming.

All four companies posted stellar quarterly earnings on Thursday, showing the strength of the shift in corporate computing away from company-owned data centers and to the cloud.

Microsoft’s Azure business nearly doubled, with year-over-year growth of 90 percent. The company does not break out revenue figures for Azure, but research firm Canalys estimates it generated $2 billion for Microsoft.

“The move to the cloud was one we felt Microsoft could always benefit from, and they’re showing us that they can,” said Kim Forrest, vice president and senior equity analyst at Fort Pitt Capital Group, a portfolio management firm.

Highlighting the quarter for Microsoft was a deal securing retailer Costco (COST.O) as an Azure customer. That came just two months after the close of Amazon’s acquisition of grocery chain Whole Foods, which has heightened unease among retail and e-commerce companies about working with Amazon, said Ed Anderson, an analyst with Gartner.

Tim Green, analyst with the Motley Fool, said Amazon could find it needs to make changes at some point at Amazon Web services. “Spinning off AWS at some point down the road might become necessary to prevent an exodus of customers,” he said.

Amazon Web Services is still delivering far more revenue than any of its peers. For the quarter, AWS raked in nearly $4.6 billion — a year-over-year increase of 42 percent. AWS may have missed out on Costco, but the company secured deals with Hulu, Toyota Racing Development, and most notably, General Electric.

Google Cloud Platform landed deals with the likes of department store retailer Kohl’s and payments processor PayPal. Like Microsoft, Alphabet does not break out revenue for Google Cloud Platform, but Canalys estimates the business generated $870 million in the quarter, up 76 percent year-over-year.

Google Chief Executive Officer Sundar Pichai said Google Cloud Platform is a top-three priority for the company. He said Google plans to continue expanding its cloud sales force.

Canalys estimates the cloud computing market at $14.4 billion for the third quarter of 2017, up 43 percent from a year prior. Amazon holds 31.8 percent of the market, followed by Microsoft at 13.9 percent and Google with 6 percent, according to Canalys’ estimates.

The “cloud market will keep growing faster than most of the traditional information technology segment, as the market is still in the developing stage,” said Daniel Liu, research analyst with Canalys.

Reflecting the overall growth of the market was the strong performance by Intel, which sells processors and chips to cloud vendors. In July, Intel launched its new Xeon Scalable Processors, which drove 7 percent year-to-year growth for the company’s data center group.

The big three cloud vendors also benefit from the decision by many enterprises to build their applications using more than one cloud vendor. Retailers Home Depot Inc (HD.N) and Target Corp (TGT.N), for example, told Reuters they use a combination of cloud providers.

“Our philosophy here is to be cloud agnostic, as much as we can,” said Stephen Holmes, a spokesman for Home Depot, which uses both Azure and Google Cloud Platform.

Some analysts expect cloud services growth to slow over time as competition increases.

Amazon, for instance, has said that price cuts and new products with lower costs on average are a core part of its cloud business. Additionally, Amazon Web Services saw usage growth outpacing that of revenue growth, said Amazon Chief Financial Officer Brian Olsavsky.

“Going forward, cloud services will become more of a commodity, and the prices will quickly compress,” said Adam Sarhan, CEO of 50 Park Investments, an investment advisory service. “For now though, it’s a great business with plenty of room for all to grow.”

Reporting by Salvador Rodriguez; Additional reporting by Jeffrey Dastin and Paresh Dave; Editing by Leslie Adler; Editing by Jonathan Weber

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/JxUP8wwhxds/cloud-computing-drives-massive-growth-for-big-u-s-tech-firms-idUSKBN1CW05H

Asian shares gain after upbeat earnings from U.S. tech titans

TOKYO (Reuters) – Asian shares gained on Friday as technology shares were boosted by upbeat earnings from U.S. high-tech giants while the euro hovered near three-month low against the dollar after the European Central Bank extended its stimulus.

The Australian dollar fell to 3 1/2-month low of $0.7625 AUD=D4 after Australia’s conservative coalition government lost its one-seat parliamentary majority following a High Court ruling that Deputy Prime Minister Barnaby Joyce is ineligible to remain in parliament. The court has now ordered a by-election for Joyce’s seat.

Australia’s SP/ASX200 fell about 0.6 percent after the news of Joyce’s disqualification.

Japan’s Nikkei .N225 gained 0.9 percent while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3 percent .MIAPJ0000PUS, with Hong Kong shares .HSI leading gains.

“Corporate earnings are rising to record levels in the world. And the IMF just upgraded its economic forecast for all of U.S., China, Europe and Japan,” said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

Earnings from Alphabet (GOOG.O), Microsoft (MSFT.O) and Amazon.com (AMZN.O), the world’s second, third and fifth largest companies by market capitalization, were all upbeat, boosting their shares in after-hour trade.

Shares in those companies rose 2.8 percent, 4.5 percent and 7.6 percent respectively.

Prior to that, the U.S. SP 500 Index .SPX gained 0.1 percent to edge near the record high touched last week, thanks to the robust global economy and solid corporate earnings.

As third-quarter earnings season nears the half-way mark, 74 percent of U.S. companies have topped expectations, above the 72 percent beat rate for the past four quarters.

The U.S. House of Representatives helped pave the way on Thursday for deep tax cuts sought by President Donald Trump, passing a budget blueprint for fiscal 2018 that will enable the tax legislation to win congressional approval without any Democratic votes.

“On the whole, growth shares were strong yesterday both in the U.S. and in Europe. And now that the Republicans can pass the tax reform, the tax cut debate now looks set to kick off next week,” said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

German shares .GDAXI hit record high on Thursday while the pan-European Eurofirst 300 Index .FTSE gained 1.1 percent, its biggest gains in 3 1/2 months, after the ECB extended its bond buying program to September.

Although the ECB halved the size of its bond purchasing to 30 billion euro per month from January, it also promised years of stimulus and even left the door open to backtracking.

Euro zone bond yields plunged, with the benchmark 10-year German Bund yield falling about 6 basis points to 0.42 percent, the biggest daily fall in nine months DE10YT=TWEB.

Yields on debt issued by Southern European countries seen as less creditworthy also fell, with the premium that investors demand from Italian bonds IT10YT=TWEB falling to 1.53 percentage points, near 7 1/2-month low touched in early August.

Spanish debt yields ES10YT=TWEB also fell on hopes of a breakthrough in the Catalan crisis, although the risk of direct confrontation between Madrid and Barcelona remains.

The Spanish Senate is to due to approve the take-over of Catalonia’s institutions and police on Friday, and give the government in Madrid the power to remove the Catalan president, a move that could spark civil protests.

In the currency market, the ECB’s dovish stance sent the euro EUR= to a three-month low of $1.1631.

The dollar was little moved against the yen at 114.09 JPY=, near Wednesday’s three-month high of 114.245.

On the other hand, Brent crude futures held firm after closing at a 27-month high on Thursday as the market focused in on Saudi Arabia’s comments about ending a global supply glut, brushing off an unexpected increase in U.S. crude inventories and high U.S. production and exports.

Brent LCOc1 stood little changed at $59.32 a barrel, just below Thursday’s high of $59.55

U.S. West Texas Intermediate crude CLc1 fetched $52.64 a barrel, flat from Thursday’s six-month closing high.

Reporting by Hideyukia Sano; Editing by Eric Meijer

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/_4TJD9andHU/asian-shares-gain-after-upbeat-earnings-from-u-s-tech-titans-idUSKBN1CW030