Asian stocks extended gains for a fifth consecutive day on Wednesday, as renewed optimism about the world's biggest economy brightened the outlook for risk assets while the euro held on to previous gains as political concerns in France ebbed, according to Reuters. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, hovering near their highest since June 2015. Stock markets in Japan and Australia led gainers. "We are carrying on the momentum from the overnight rally in the U.S. markets and financials are in the spotlight on expectations of good earnings, said Alex Wong, a fund manager at Ample Capital Ltd in Hong Kong, with about $130 million under management. A strong finish to U.S. markets was the main driver. The Nasdaq Composite hit a record high on Tuesday, while the Dow and S&P 500 brushed against recent peaks as strong earnings underscored the health of corporate America. Fanning the market's rally were reports that President Donald Trump's tax reform proposals, due to be announced on Wednesday, would include a slashing of the corporate tax rate and lower taxes on offshore earnings stockpiled by U.S. companies overseas. The threat of a U.S. government shutdown this weekend also receded after Trump backed away from demanding Congress include funding for his planned border wall with Mexico in a spending bill. Financials led the Hong Kong stock market higher as fund managers bet on expectations the quality of banks' balance sheets will likely get better on an improving economic cycle and cheaper valuations. In Hong Kong, for example, the financial sector trades at a forward price-to-earnings ratio of 8.7 times compared with traditional market darlings of technology stocks at 29 times, according to Thomson Reuters data.
