Asian stocks extend rally on positive earnings, and economic data

TOKYO (Reuters) - Asian shares climbed on Friday after upbeat U.S. corporate earnings, solid U.S. economic data, and an unexpected uptick in euro zone business sentiment helped ease concerns that the global economy was losing momentum.

Japan's Nikkei share average rose 1.4 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 per cent.

Results from Caterpillar Inc and 3M Co reassured investors that companies with large overseas revenue streams could deliver solid profits, despite concerns about global economic growth.

The markets ignored positive earnings earlier this month, when the world's share prices hit multi-month lows, overwhelmed by fears that sluggishness in Europe and Asia could deal a severe blow to the U.S. economy as well.

But a steady flow of solid earnings helped to ease many such concerns for now.

With 177 of the S&P 500 companies having posted third-quarter results, 69.5 per cent have beaten expectations, better than the 67 percent beat rate over the past four quarters, and higher than the 20-year average of 63 per cent, Thomson Reuters data showed.

"The markets had fallen on sentiment rather than on facts. And the sentiment is coming back," said Soichiro Monji, chief strategist at Daiwa SB Investments.

New claims for U.S. unemployment benefits also held below 300,000 for a sixth straight week last week.

In the euro zone a survey showed businesses performed much better than anyone expected this month, even though it also pointed to strong deflationary pressure in the region.

Wall Street shares rose on Thursday as a result, with S&P 500 index hitting two-week highs, although their gains were pared back in late session on news of the first Ebola case seen in New York.