By Wayne Cole
SYDNEY (Reuters) - Asian shares sought to rally for a third session on Tuesday as hopes for upbeat corporate earnings buoyed Wall Street, while several high-profile resignations from Britain's government kept sterling on the defensive.
Sentiment has been soothed by a bounce in Chinese shares which saw Shanghai blue chips <.CSI300> climb 2.8 percent on Monday for the biggest daily jump since August 2016.
Both the Dow and S&P 500 boasted their biggest gains in more than a month overnight, as bank shares jumped ahead of earnings reports later this week. The S&P banks index <.SPXBK> posted its sharpest rise since March 26.
The Dow <.DJI> rose 1.31 percent, while the S&P 500 <.SPX> gained 0.88 percent and the Nasdaq <.IXIC> 0.88 percent.
Prime Minister Theresa May's foreign minister and Brexit negotiator quit on Monday in protest at her plans to keep close trade ties with the European Union after Britain leaves the bloc, stirring rebellion in her party's ranks.
The uncertainty saw sterling sink as deep as $1.3189 at one stage before bouncing somewhat to $1.3254
"Heightened political risk at home coupled with Brexit uncertainty may prompt the BOE to repeatedly delay monetary policy normalization in 2018," said Lukman Otunuga, a research analyst at broker FXTM.
"If expectations continue to diminish over the central bank raising UK interest rates, sterling is at risk of experiencing heavy losses down the road."
The pound's pain was a boon for the U.S. dollar which rallied broadly on expectations the Federal Reserve will keep raising its interest rates.
(Reporting by Wayne Cole; Editing by Eric Meijer)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)