Asia shares track Wall Street higher as investors await earnings

Asian shares climbed in early trade on Tuesday after Wall Street hit record highs overnight, as investors awaited the second-quarter earnings season and a batch of economic data, including key US inflation figures later in the day.

Investors are bracing for an eventful week which will include the start of the US earnings season, inflation data from several countries and a testimony by Federal Reserve Chair Jerome Powell. The testimony will be scrutinised for any clues on the timing of potential US tapering.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5 per cent, tracking a Wall Street rally overnight. The index is down 3.1 per cent so far this month.

Australian shares were up 0.49 per cent, while Japan's Nikkei stock index rose 0.79 per cent.

China's blue-chip CSI300 index was down 0.1 per cent, while Hong Kong's Hang Seng index rose 0.65 per cent.

Overnight, Wall Street's main indexes closed at their highest levels ever, lifted by Tesla and bank stocks. Tesla rallied over 4 per cent and was the top contributor to gains in the S&P 500 and Nasdaq.

CEO Elon Musk insisted in court on Monday he does not control Tesla, and he said he did not enjoy being the electric vehicle company's chief executive as he took the stand to defend the company's 2016 acquisition of SolarCity.

The S&P 500 banks index climbed 1.3 per cent ahead of quarterly earnings reports this week from major banks. JPMorgan Chase rose over 1 per cent and Goldman Sachs rallied more than 2 per cent, fuelling the Dow's gains.

"Financials have been unloved for the best part of two months as yield curves have flattened and reflation bets unwound. With earnings season upon us and US (10-year) yields now looking like they may have found a bottom, we could see some rotation back into banks," said ANZ analysts in a note.

The next question is whether company earnings will support Wall Street's run higher.

S&P 500 companies' earnings per share for the June quarter are expected to rise 66 per cent, according to IBES data from Refinitiv. JPMorgan, Goldman Sachs, Bank of America and other big banks kick off results from Tuesday.

US inflation data on Tuesday will also be in particular focus as investors try to gauge whether recent price pressures in the world's largest economy persist.

Concerns that climbing cases of the Delta variant around the world could derail a global economic recovery have fuelled appetite for safe-haven US Treasuries. The benchmark US 10-year bond yield fell last week to a five-month low of 1.25 per cent.

While markets have since stabilised, yields are not far off 4-1/2 month lows at 1.3695 per cent.

In currency markets, the dollar index, which tracks the greenback against a basket of major currencies, was last down at 92.214, after touching a three-month top of 92.844 last week.

US crude ticked up 0.3 per cent to $74.32 a barrel. Brent crude rose to $75.37 per barrel.

Gold was slightly higher. Spot gold was traded at $1807.35 per ounce.