The Intel Effect Leads Asian Markets Higher

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hello to our CCTV Business Channel viewers.

I am Saijal Patel and you're watching Asia Market Daily, co-produced by CCTV Business Channel and CNBC, first in business worldwide.

First up, stock markets across Asia cheering on the latest Intel earnings report from US overnight.

The tech heavyweight issued stellar 2nd quarter results and says they're seeing clear signs of renewed spending by corporations.

Such optimism is exactly what the markets were hoping for as one US strategist explains.

(SOT) Yu-Dee Chang, Principal and Chief Advisor, ACE Investment Strategists, LLC:

“I think basically the backward looking earnings are expected to be pretty good, right. so people are saying what's important is the outlook going forward, but i think there's a bit new answers now. People are really keeping a very close eye not on the bottom line but on the sales number, the revenue number, I think whichever company comes out with better, yeah, better revenue numbers, are actually getting rewarded 061534 in this case, Intel really pretty much blown analysts' expectations out of the water on their top line growth.”

Japan's Nikkei leading the gains across Asia, surging almost 3 percent.

Others like Taiex and Kospi also powering ahead.

Asia's top chip and PC-related shares getting the biggest boost.

The world's top maker of DRAM memory, Samsung Electronics was up 3 percent.

Others like China's Lenovo and Taiwan's TSMC also edged higher and Acer, the world's number 2 PC brand hit a 3-week high.

Analysts say Microsoft and IBM's results in the next 2 weeks will determine the strength of this rally.

While the markets cheer, governments in the US and Europe are still working hard to piece together reforms that will strengthen their economies.

Overnight in the US, the Senate Democrats appeared to have nailed down the 60 votes needed to see through a historic overhaul of US financial regulations.

The final vote is expected to come through this Thursday. CNBC's Eamon Jarvis reports from Washington.

It looks like Barack Obama is well on its way to big legislative victory this week on Wall Street reform legislation. And that put the president in a thankful mood today.

(SOT) Barack Obama, US President:

"Three Republican senators have put politics and partisanship aside to support this reform and I am grateful for their decision as well as all the Democrats who have worked so hard to make this reform a reality."

The three senators in question are Scott Brown of Massachusetts, Susan Collins and Olympia Snowe of Maine have each come out in favor of the reform bill within the past 48 hours. That gives the White House a bipartisan gloss for a bill that would be passed largely on Democratic votes, with most republicans in opposition. But, with the Yes votes in hand, the senators now expected to pass the bill on Thursday morning, sending the biggest overhaul the US financial system since the Great Depression to the presidents desk for a signature. Back to you.

European finance ministers meeting in Brussels overnight remained divided over what data to publish in bank stress tests due on July 23.

But pledged to make the results as transparent as possible.

CNBC's Carolina Cimmenti reports:

Here in Brussels the eco fin meeting of the 27 EU finance ministers, the main topic was obviously the stress test.

These finance ministers were supposed to discuss and agree on what details they want to see in the publishing of the results of their banking systems. Now we know that they didn't find an agreement so on July 23, most likely we are only going to see the consolidated results of the 91 banks being tested in Europe.

We are only going to have a bank-by-bank result after this date. And this is because there is a lot of disparity. Some countries in Europe like the Netherlands would like to show every kind of detail in their banking sector: the tier 1 ratio and everything related to results. Greece has said as well, that they would like to show as much transparency as they can to reassure the markets about their banking system. But all other countries like Germany, France and Spain, they are skeptical, they said they are not convinced yet of how much, how far they want to go with the transparency of their banks' results, that means, they will keep discussing that because the bank by bank results are only going to be published together, although they are going to be published by different authorities in every of the 27 European countries, back to you.

Moving onto the commodities front, euro zone's woes bringing an extra shine to gold prices.

Spot gold levels today still hovering around the $1200 per ounce support level, after gaining almost 2 percent yesterday.

Thomas Wrigglesworth , Head of Mining Research at Citi Hong Kong tells us where he thinks prices could be headed.

(SOT) Thomas Wrigglesworth, Head of Asia Pacific Metals & Mining Research, Citi:

“I think at the moment, gold's broken below its 50-day moving average, looks to be stabilizing around the 1200-level. I think we got good support levels here, we could potentially see a pull back around the 1100 level, but in the light of poor macroeconomic data, I do think we'd see gold go above 1250, that's our houseful cost for this year and we could see it. And I think the next the next structural level above that is as high as say, 1400, but we'd be shocked to see that kind of move.”

Let's take a look at how gold has performed recently.

Prices are up 11.3 percent in the last quarter.

Citi analysts are saying that gold prices could go higher - they've raised their outlook for this year and next by 10-percent each

Now, we know China makes up for 11 percent of the world's gold demand.

And last year, gold demand in China grew 13 percent on year.

Now let's also take a look at some of the bigger China names that foreign investors pay attention to. These gold stocks are listed in Hong Kong.

Zi-Jin gold is China's biggest, with a market cap of 72 billion.

We also have Zhao-Jin Mining at almost 26 billion and Real Gold at 10billion.

In terms of price to earnings ratios, here's how they compare to the Hang Seng Index.

Amongst the companies in the base metals sector, Citi says they think Real Gold is the most attractive stock, given its gold exposure and volume growth.

So, how should one decide on what's better - buying gold? Or investing in a Hong Kong listed stock? Here's what Citi is advising.

(SOT) Thomas Wrigglesworth, Head of Asia Pacific Metals & Mining Research, Citi:

“I think if you actually look at the correlation between Zhaojin and real gold with the gold price in Hong Kong China, it's been above 90%. For every 10% move in the gold price, we see a 9% move in the stocks. And Zijin's kind of dropped away that relationship because of base metals exposure. Certainly, these companies not only give you that gold price performance but also give you volume growth, which is obviously what the pure commodity doesn't. Certainly in the case of real gold there is plenty of volume growth going forward. So I think these are interesting opportunities.”

Well, that wraps up today's business highlights.

I'm Saijal Patel from CNBC - first in business worldwide.

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