Across Asia, regional markets are all pushing higher in afternoon trade after Intel reported a stronger-than-expected Q2 result and Singapore upgraded its 2010 economic growth forecast. Japan's Nikkei 225 is the best performer, up 2.7% while the Kospi, Hang Seng and Shanghai Composite are all gainer between 0.6% and 1.3%.

In Australia, the ASX 200 closed the session 1.9% firmer at 4462.4, the high of the session. After the strong performance in the US overnight we saw broad based gains across our market with the heavyweight materials, financials, energy and industrial sectors all convincingly higher, as a solid start to the US earnings season buoyed investor sentiment.

We've seen a very good start to the earnings season. It's forcing a lot of bearish analysts to review their positions and cover back where appropriate, hence the rally we saw in Intel after hours. It's not just headline figures that are impressive, but outlook statements are upping guidance, which is very encouraging.

A tell tale sign for us confirming a change in sentiment was the market's non-reaction to Moody's two-notch downgrade of Portugal's credit rating. Only a week ago, this would have precipitated a massive sell off. The fact that the market was able to take this in its stride perhaps suggests that the worst of the European sovereign debt crisis is behind us. It looks like the glass is half full again.

Looking ahead, tonight's result from JPMorgan will be crucial as many analysts have seen the financial space as a potential area of weakness, concerned about how new financial regulations might impact forward earnings and outlooks.

The financial sector was the standout performer, rising 2.4% for the session after US financials rose 2.6%. CBA was one of the top performers, up 3.1% after its treasurer Lyn Cobley said the firm is well placed for any volatility in funding costs, given it is way ahead of its funding schedule for the year and deposit growth is going well. Nonetheless, she echoed recent views of smaller Australian banks, saying funding costs could increase further in the coming months.

Elsewhere, the remainder of the four major banks were all firmer between 1.6% and 3.2%. Macquarie Group added 2.3%.

The materials sector had a very strong session too, rising 2% after commodities surged overnight. Bluescope Steel was the top performer, up 3.2% while Fortescue, BHP and Rio Tinto all gained between 1.3% and 2.8%.

In a commodities report from Triland Metals, it said sentiment in the base metals market appears to be improving. The broker believes that with the euro getting stronger again and participants looking to focus more on good news, it seems the current context is more favourable to further gains. In particular, Triland said investors overnight shrugged off potentially worrying macroeconomic news to focus on the strong start to the US earnings season. Both Alcoa and South Korea's Posco reported stronger-than-expected profits, helping push metals back into positive territory. Elsewhere, another market participant cited the surge in US equities, but said weaker Chinese import numbers moderated the rise in metal prices.

Elsewhere, In a comment from RBS, it said it's not surprising shares in Indophil Resources were down 42.5%, its lowest level since August 2009, given the stock was in a trading halt since early June. The broker said when it went into the trading halt there was a bid for them at $1.28. RBS continued saying the bid from China's diversified giant Zijin Mining Group has since fallen apart as the clock ran out on Chinese regulatory approvals. However, Indophil said this morning it had received strong expressions of interest from other parties and opened its data room.

Industrials chipped in with significant gains too, with the sector up 1.9%. Once again, Downer EDI led the way, jumping another 5.3% as bargain hunters top up the coffers. Leighton Holdings, Toll Holdings, James Hardies and United Group were all up between 2.1% and 2.8%.

A 3.5% surge in Crude Oil futures overnight boosted the energy sector. It rose 1.5%, with Whitehaven Coal, WorleyParsons, Woodside Petroleum and Caltex all up more than 1.4%.

Investors will be hoping its third-time lucky for Linc Energy after a report out of India said it's finally close to selling a coal tenement in Queensland to Adani Enterprises for US$1 billion. Linc has been trying to sell its Queensland assets for close to two years, and after two deals that fell through (both involving Chinese companies), has left investors disappointed. Consequently, the news on the sale has been met with some skepticism, although the detail in the The Economic Times report is getting investors excited again, with Linc's shares up more than 30%. Citing two unnamed sources, the report said Adani expected to make an initial upfront payment to Linc of US$435 million in the next few days, with the rest to come over the next few months. In response, Linc said it's still talking to a number of parties, but hasn't finalised material terms with any of them yet.

Ben Potter Research Analyst

IG Markets - CFD trading