Asia stocks up after US debate

Asian stocks advanced on Thursday, propelled by strong US earnings and oil prices near a 15-month high, as the third and final US presidential debate before the Nov 8 election ended.

MSCI`s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent. Japan`s Nikkei extended gains to 1 per cent.

China`s CSI 300 reversed earlier gains to fall 0.1 per cent, while Hong Kong`s Hang Seng index climbed 0.5 per cent.

In the final debate between Republican presidential candidate Donald Trump and Democrat Hillary Clinton, Trump tried to reverse the momentum in an election that polls show is tilting away from him.

"Never in the history of the US has a candidate faced such a deficit in the polls as Trump currently holds, with at least two well-known sites (that model the probability of the outcome) putting an 85-90 per cent chance of a Clinton win," Chris Weston, chief market strategist at IG in Melbourne, wrote in a note."But as 2016 has shown us, not just in politics, but in markets too, it can often pay to expect the unexpected."

At the end of the debate, the Mexican peso had inched up against the dollar.

The US dollar slipped 0.2 per cent to 18.46 pesos, extending losses to 2.9 per cent this week.

Trump`s radical positions on Mexican migration and trade could severely disadvantage the US`s southern neighbor if he wins, so a stronger Mexican peso reflects lower market expectations of a Trump win.

Trump refused to say in the debate whether he would accept the outcome of the Nov 8 election, after earlier urging supporters to patrol polling places in inner cities to prevent voter fraud.

Trump and Clinton sparred over the influence of Vladimir Putin, with Clinton calling Trump the Russian president`s puppet and Trump claiming Putin had repeatedly outsmarted Clinton.

Trump also accused Clinton`s campaign of orchestrating a series of accusations by women who said the businessman made unwanted sexual advances against them, saying the stories were "totally false."

Overnight, the S&P 500 index and the Dow Jones Industrial Average closed up 0.2 per cent, after Morgan Stanley posted a better-than-expected quarterly profit to round out a string of solid results from big US banks.

With 70 companies in the S&P 500 having reported earnings through Wednesday morning, 80 per cent have topped earnings expectations. Third quarter earnings are now expected to increase 0.5 per cent, according to Thomson Reuters I/B/E/S, which would be the first quarter of growth in five.

"We`re up because the (earnings) numbers are so great, the forward guidance is great and the banks just knocked it out of the park," said Ken Polcari, Director of the NYSE floor division at O`Neil Securities in New York.

Energy shares also contributed to the gains on Wall Street, as oil prices jumped after a surprisingly large inventory drop of 5.2 million barrels, compared with a forecast for a 2.7-million barrel build. It was the sixth week of declines in seven weeks.

US crude slid 0.4 per cent to $51.39 on Thursday, after surging 2.6 per cent to close at $51.60 in the previous session. It earlier touched $51.93, the highest since July 2015.

Brent crude slipped 0.2 per cent to $52.56 on Thursday, after climbing 1.9 per cent on Wednesday.

The dollar was steady at 103.52 to 103.62 yen on Thursday after falling 0.4 per cent on Wednesday.

The Australian dollar retreated 0.4 per cent to $0.7692 after data showed Australia shed a whopping 53,000 full-time jobs in September, although unemployment held at a three-year low of 5.6 per cent.

The euro was flat at $1.0979, ahead of the European Central Bank`s policy meeting on Thursday.

Investors are focused on whether ECB President Mario Draghi will give any indication of if and when the central bank may begin tapering its bond purchase program.