Asia Pacific stocks moved further higher in quiet trade on Tuesday, 24
December 2013, catching up with gains on Wall Street overnight after
strong US economic data strengthened optimism on the U.S. economy. The
MSCI Asia Pacific Excluding Japan Index advanced 0.4% to 463.87. The
broader MSCI Asia Pacific Index was little changed at 139.19.
Sentiment was buoyed by another record session on Wall Street, with the Dow Jones industrial average and S&P 500 advancing to all-time highs overnight as economic data (personal spending and consumer confidence) continued to signal a sustained recovery. The Dow Jones closed at a new record high of 16,294.61 (+0.45%) and the S&P 500 rose to 1,827.99 (+0.53%).
The U.S. Commerce Department said on Monday that personal income increased 0.2% in November after declining 0.1% in October. Personal spending rose 0.5%, in-line with consensus expectations, after increasing an upwardly revised 0.4% (from 0.3%) in October.
A separate report showed the Thomson Reuters/University of Michigan final index of consumer sentiment in December climbed to 82.5 from 75.1 a month earlier.
International Monetary Fund chief Christine Lagarde said the Washington D.C.-based institution would raise its 2014 U.S. growth forecast from the current estimate of 2.5%, citing more certainty in 2014. Her remarks came after Friday data showed the U.S. grew at an annualized rate of 4.1% in the third quarter of the year, up from the previous estimate of 3.6%
Among Asian bourses- Japan's benchmark Nikkei225 index closed 18.91 points higher at 15.889.33 after briefly surpassing the psychologically important 16000-level, driven by buying from long-only investors after Wall Street jumped to new records overnight after strong economic data. Japanese markets were closed on Monday for a public holiday.
However, gains on the Tokyo market were limited as investors cashing in profit after the benchmark index surged to fresh six-year peak early today. Japanese stocks have enjoyed a record-breaking rally this year, backed by Tokyo's aggressive fiscal and monetary stimulus aimed at sparking sustainable growth in the world's third-largest economy. The benchmark Nikkei is up 53% this year, on track for its best annual rise since 1972.
The export-oriented Japanese stocks were mostly higher, with Alps Electric Co. rising 3.79%, Tokyo Electron adding 2.53% and Mitsubishi Motors Corp rallying 4.27% after raising its operating profit forecast by 20% for the fiscal year ending in March. Panasonic Corp. dropped 1.65% after news of a joint venture with Israeli firm Tower Semiconductor, which will take over chip making at three Panasonic plants. Asahi Co. fell 3.91% after posting a drop in its nine-month net profit.
In economic news- The Bank of Japan on Tuesday offered a bright outlook for industrial production and exports for the first quarter of 2014, indicating that Japan's economy is expected to gain momentum in the coming months ahead of a sales tax hike in April. As for the output for January-March, (industrial production) is expected to increase broadly on the basis of moderate recovery at home and overseas, the BOJ's latest economic report said. It also said that the front-loaded demand before the consumption tax hike in April 2014 will likely contribute to boosting Japan's industrial production for the fourth quarter of this year and the first quarter of 2014. The BOJ also said that Japan's exports are likely to increase moderately on the back of a moderate recovery of overseas economies. The BOJ has noted that the recovery of exports and capital investment are important factors for Japan's economy not only to gain upward momentum, but also to maintain the path toward achieving a price target of 2% sustained inflation by the first half of fiscal 2015.
Japan's government said on Tuesday that it has drafted the budget for fiscal 2014 totaling a record Y95.882 trillion, up from Y92.612 trillion for the initial fiscal 2013 budget. According to the plan, general-account spending, which excludes debt-servicing costs, will total Y72.612 trillion, up from Y70.370 trillion for this fiscal year, due to increases in public works expenditures supporting the economy and rises in social security expenditures responding to the aging society. Debt-servicing costs will total Y23.270 trillion, up from Y22.242 trillion in fiscal 2013. Fund distribution from the central government to municipalities will decrease to Y16.142 trillion from Y16.393 trillion. Tax revenue is estimated to come to Y50.001 trillion, up from Y43.096 trillion for this fiscal year, which would exceed Y50 trillion for the first time since fiscal 2008, thanks to a consumption tax hike as well as continued economic recovery.
The government also said it plans to sell Y155.100 trillion of government bonds to the market in fiscal 2014, down from an initial Y156.600 trillion for the current fiscal year. Apart from JGBs to be sold to refinance maturing bonds, the MOF will sell Y41.250 trillion in new bonds to finance the fiscal 2014 budget, down from this year's initial plan to sell Y42.851 trillion, thanks to expected rises in tax revenues. Meanwhile, total JGB issuance, which includes sales to financial institutions, individual investors and the public sector, will come to Y181.539 trillion for fiscal 2014, up from an initial plan to sell Y170.545 trillion in fiscal 2013.
The ratio of new government bond issuance to the fiscal 2014 budget will be 43.0%, down from 46.3% for this fiscal year. The outstanding balance of government bonds will total a record Y780.448 trillion, which is equivalent to 156.0% of estimated GDP for fiscal 2014. As a result, Japan will remain the most heavily indebted industrialized nation.
Australia- Headline shares on the Australian financial market moved higher for the fourth consecutive session, with the benchmark S&P/ASX 200 index rising 35.30 points to finish at 5327.20, buoyed by another record session on Wall Street overnight.
Most sectors finished higher, with financials and some names with strong global exposure were leading rally. Meanwhile, buying pressure was also evident in industrials, healthcare, consumer discretionary, energy, utilities and tech stocks, while there was a switch out of property developer stocks.
Australian top four lenders shares extended winning streak after Australia's bank regulator told the group to increase their capital buffers. Australian Prudential Regulation Authority said on Monday that the big four banks must increase the amount of capital they set aside to absorb losses by an extra 1 percentage point from January 2016. The changes, which were broadly consistent with economist expectations, are designed to reduce the risk to the broader Australian economy of a financial institution deemed by the regulator to be systemically important failing.
Among lenders, Commonwealth Bank added 0.5% to A$77.16, Westpac Bank 0.7% to A$32.14, National Australia Bank 0.5% to A$34.78 and Australia & New Zealand Banking Group 0.6% to A$32.13.
Shares in Australia's only listed health insurance provider, Nib Holdings (NHF), jumped for the second day running, rising 1.6% to $2.54, after a 2.5% lift on Monday, after the Federal Government granted approval for an increase in health premiums next year. Multinational insurers QBE Insurance Group jumped 1.13% to A$11.68 and Insurance Australia Group 1.41% to A$5.75.
Consumer related stocks were sharp higher, on expectation of strong demand pickup in Christmas business, with JB Hi-Fi gained 1.2% to A$21.38 and Harvey Norman finished up 1.6% at A$3.15. Supermarket giant Woolworths inched 0.3% higher to A$33.70, and rival Wesfarmers added 0.6% to A$43.79.
Paper merchant and packaging supplier PaperlinX (PPX) announced it will cut 75 jobs in Germany and 65 in the United Kingdom as it continues to restructure operations. PPX rose 2.3% to close at A$0.044.
Northern Star Resources shares continued their strong run, lifting 6.2% to A$0.77, adding to the 6.6% from Monday after the miner announced the purchase of the Plutonic goldmine in Western Australia for US$25 million (A$27.99 million).
China- Key benchmark indices on the China's share market moved up for second day in row, as investors chased for bottom hunting on calming jitters about liquidity crunch after People Bank of China injected 29 billion yuan of liquidity via open market operation. The Shanghai Composite rose 3.20 points to finish at 2092.91, while the CSI 300 Index added 3.65 points to close at 2288.25.
Sentiments for cyclical stocks buoyed after the People Bank of China holds first open market operation in 3-weeks to ease liquidity crunch panic. The People's Bank of China finally responded to the surge in money market rates by injecting 29 billion yuan on Tuesday via seven-day reverse repurchase agreements. It was the first time the PBOC added funding via its biweekly operations since December 3, though the bank said Friday that it added over 300 billion yuan via short-term liquidity operations at the end of last week.
Market gains were, however, limited amid concerns that 29 billion yuan won't make much of a dent in the cash demands of China's financial institutions while the PBOC's reliance on seven-day maturities highlights its unwillingness to provide longer-term funding. Further, the Chinese New Year holiday falls at the end of January and will create fresh strains on the system -- one-month rates already began responding to the onset of that holiday on Monday.
Among SSE sectors, 6/10 sectors of the SSE index advanced, with telecommunication services sector was best performer in the SSE sectoral indices, adding 1.8%, while healthcare issue was worst performer, falling 0.7%. Information technology sector advanced 1.4%, Consumer discretionary up 0.7%, utilities up 0.6% and industrials up 0.2%.
China's money markets rates declined from prior day on Tuesday, on calming jitters over liquidity crunch in the market after People's Bank of China finally responded to the surge in money market rates by injecting 29 billion yuan via seven-day reverse repurchase agreements. The seven-day repo rate, a gauge of borrowing costs among banks and usually watched as an indicator of liquidity stress, traded at a weighted average of 7.00% by late afternoon compared with 7.50% prior day. The overnight repo, a benchmark measure of interbank funding availability, traded at a weighted average of 4.15% compared with 4.62 % previous day.
Hong Kong, shares in Hong Kong market trekked higher in quiet trade, with financials and some names with strong global exposure gaining ground after a solid advance for U.S. shares overnight. The benchmark Hang Seng Index was provisionally ending 257.99 points higher at 23179.55 in the shortened session.
Among the HK 50 blue chips, 49 rose and one fell. Hang Lung Properties (00101) put on 2.7% to HK$24.45, while COSCO Pacific (01199) dipped 0.19% to HK$10.5, making themselves the largest blue-chip gainer and loser respectively.
Market heavyweights were higher. China Mobile (00941) edged up 0.5% to HK$80.95, while HSBC (00005) gained 1.2% to HK$83.5.
Major mainland banks traded broadly higher in Hong Kong after the People's Bank of China added liquidity to the financial system. Agricultural Bank of China climbed 1.34%, Bank of Communications Co rose 1.9%, and Industrial & Commercial Bank of China added 1.35%. Strong gains for financials also pushed international lenders higher, with HSBC Holdings up 1.15% and Standard Chartered added 2.15%.
Elsewhere, China Everbright gained 5.76% on news it was selling some shares of China Everbright Bank Co, which sank 1.3%, extending losses since its trading debut last week.
Shares of FIH Mobile, part of the Foxconn group, gained 9.69%, after the firm said it would swing to a profit for 2013. The stock had enjoyed strong gains in the previous session on news of a partnership with BlackBerry.
India- A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 22.92 points or 0.11%, up about 60 points from the day's low and off close to 75 points from the day's high.
Among the 30-share Sensex pack, 19 stocks declined and rest of them rose. Tata Power Company (down 2.53%), Sesa Sterlite (down 2.33%) and Wipro (down 1.47%) declined.
ICICI Bank gained 0.29%. ICICI Bank on 21 December 2013 said it has cut its home loan rates for new customers by 15 basis points or 0.15 percentage points, as a part of a special scheme. It will be valid till 31 January 2014. Under the scheme, the bank will offer home loans up to Rs. 75 lakh at an interest rate of 10.25%, while loans above Rs. 75 lakh will be charged 10.50%.
Kirloskar Electric Company fell 0.75%. The company said it has successfully exported a generator duty transformer of 24/30 MVA, 115/38.5/10.5 kV for a hydro-electric project in Song-Giang, Vietnam. The announcement was made after market hours on Monday, 23 December 2013. Separately, Kirloskar Electric Company said that the lay-off at the company's factory situated in Mysore has been extended till 24 January 2014.
Elsewhere in the region, South Korea's KOSPI rose 0.24%. Indonesia's Jakarta Composite index added 0.32%. New Zealand's NZX50 index jumped 0.96%. Singapore's Straits Times index gained 0.36%. Malaysia's KLSE Composite added 0.14%. Taiwan's Taiex index shed 0.1%.
Sentiment was buoyed by another record session on Wall Street, with the Dow Jones industrial average and S&P 500 advancing to all-time highs overnight as economic data (personal spending and consumer confidence) continued to signal a sustained recovery. The Dow Jones closed at a new record high of 16,294.61 (+0.45%) and the S&P 500 rose to 1,827.99 (+0.53%).
The U.S. Commerce Department said on Monday that personal income increased 0.2% in November after declining 0.1% in October. Personal spending rose 0.5%, in-line with consensus expectations, after increasing an upwardly revised 0.4% (from 0.3%) in October.
A separate report showed the Thomson Reuters/University of Michigan final index of consumer sentiment in December climbed to 82.5 from 75.1 a month earlier.
International Monetary Fund chief Christine Lagarde said the Washington D.C.-based institution would raise its 2014 U.S. growth forecast from the current estimate of 2.5%, citing more certainty in 2014. Her remarks came after Friday data showed the U.S. grew at an annualized rate of 4.1% in the third quarter of the year, up from the previous estimate of 3.6%
Among Asian bourses- Japan's benchmark Nikkei225 index closed 18.91 points higher at 15.889.33 after briefly surpassing the psychologically important 16000-level, driven by buying from long-only investors after Wall Street jumped to new records overnight after strong economic data. Japanese markets were closed on Monday for a public holiday.
However, gains on the Tokyo market were limited as investors cashing in profit after the benchmark index surged to fresh six-year peak early today. Japanese stocks have enjoyed a record-breaking rally this year, backed by Tokyo's aggressive fiscal and monetary stimulus aimed at sparking sustainable growth in the world's third-largest economy. The benchmark Nikkei is up 53% this year, on track for its best annual rise since 1972.
The export-oriented Japanese stocks were mostly higher, with Alps Electric Co. rising 3.79%, Tokyo Electron adding 2.53% and Mitsubishi Motors Corp rallying 4.27% after raising its operating profit forecast by 20% for the fiscal year ending in March. Panasonic Corp. dropped 1.65% after news of a joint venture with Israeli firm Tower Semiconductor, which will take over chip making at three Panasonic plants. Asahi Co. fell 3.91% after posting a drop in its nine-month net profit.
In economic news- The Bank of Japan on Tuesday offered a bright outlook for industrial production and exports for the first quarter of 2014, indicating that Japan's economy is expected to gain momentum in the coming months ahead of a sales tax hike in April. As for the output for January-March, (industrial production) is expected to increase broadly on the basis of moderate recovery at home and overseas, the BOJ's latest economic report said. It also said that the front-loaded demand before the consumption tax hike in April 2014 will likely contribute to boosting Japan's industrial production for the fourth quarter of this year and the first quarter of 2014. The BOJ also said that Japan's exports are likely to increase moderately on the back of a moderate recovery of overseas economies. The BOJ has noted that the recovery of exports and capital investment are important factors for Japan's economy not only to gain upward momentum, but also to maintain the path toward achieving a price target of 2% sustained inflation by the first half of fiscal 2015.
Japan's government said on Tuesday that it has drafted the budget for fiscal 2014 totaling a record Y95.882 trillion, up from Y92.612 trillion for the initial fiscal 2013 budget. According to the plan, general-account spending, which excludes debt-servicing costs, will total Y72.612 trillion, up from Y70.370 trillion for this fiscal year, due to increases in public works expenditures supporting the economy and rises in social security expenditures responding to the aging society. Debt-servicing costs will total Y23.270 trillion, up from Y22.242 trillion in fiscal 2013. Fund distribution from the central government to municipalities will decrease to Y16.142 trillion from Y16.393 trillion. Tax revenue is estimated to come to Y50.001 trillion, up from Y43.096 trillion for this fiscal year, which would exceed Y50 trillion for the first time since fiscal 2008, thanks to a consumption tax hike as well as continued economic recovery.
The government also said it plans to sell Y155.100 trillion of government bonds to the market in fiscal 2014, down from an initial Y156.600 trillion for the current fiscal year. Apart from JGBs to be sold to refinance maturing bonds, the MOF will sell Y41.250 trillion in new bonds to finance the fiscal 2014 budget, down from this year's initial plan to sell Y42.851 trillion, thanks to expected rises in tax revenues. Meanwhile, total JGB issuance, which includes sales to financial institutions, individual investors and the public sector, will come to Y181.539 trillion for fiscal 2014, up from an initial plan to sell Y170.545 trillion in fiscal 2013.
The ratio of new government bond issuance to the fiscal 2014 budget will be 43.0%, down from 46.3% for this fiscal year. The outstanding balance of government bonds will total a record Y780.448 trillion, which is equivalent to 156.0% of estimated GDP for fiscal 2014. As a result, Japan will remain the most heavily indebted industrialized nation.
Australia- Headline shares on the Australian financial market moved higher for the fourth consecutive session, with the benchmark S&P/ASX 200 index rising 35.30 points to finish at 5327.20, buoyed by another record session on Wall Street overnight.
Most sectors finished higher, with financials and some names with strong global exposure were leading rally. Meanwhile, buying pressure was also evident in industrials, healthcare, consumer discretionary, energy, utilities and tech stocks, while there was a switch out of property developer stocks.
Australian top four lenders shares extended winning streak after Australia's bank regulator told the group to increase their capital buffers. Australian Prudential Regulation Authority said on Monday that the big four banks must increase the amount of capital they set aside to absorb losses by an extra 1 percentage point from January 2016. The changes, which were broadly consistent with economist expectations, are designed to reduce the risk to the broader Australian economy of a financial institution deemed by the regulator to be systemically important failing.
Among lenders, Commonwealth Bank added 0.5% to A$77.16, Westpac Bank 0.7% to A$32.14, National Australia Bank 0.5% to A$34.78 and Australia & New Zealand Banking Group 0.6% to A$32.13.
Shares in Australia's only listed health insurance provider, Nib Holdings (NHF), jumped for the second day running, rising 1.6% to $2.54, after a 2.5% lift on Monday, after the Federal Government granted approval for an increase in health premiums next year. Multinational insurers QBE Insurance Group jumped 1.13% to A$11.68 and Insurance Australia Group 1.41% to A$5.75.
Consumer related stocks were sharp higher, on expectation of strong demand pickup in Christmas business, with JB Hi-Fi gained 1.2% to A$21.38 and Harvey Norman finished up 1.6% at A$3.15. Supermarket giant Woolworths inched 0.3% higher to A$33.70, and rival Wesfarmers added 0.6% to A$43.79.
Paper merchant and packaging supplier PaperlinX (PPX) announced it will cut 75 jobs in Germany and 65 in the United Kingdom as it continues to restructure operations. PPX rose 2.3% to close at A$0.044.
Northern Star Resources shares continued their strong run, lifting 6.2% to A$0.77, adding to the 6.6% from Monday after the miner announced the purchase of the Plutonic goldmine in Western Australia for US$25 million (A$27.99 million).
China- Key benchmark indices on the China's share market moved up for second day in row, as investors chased for bottom hunting on calming jitters about liquidity crunch after People Bank of China injected 29 billion yuan of liquidity via open market operation. The Shanghai Composite rose 3.20 points to finish at 2092.91, while the CSI 300 Index added 3.65 points to close at 2288.25.
Sentiments for cyclical stocks buoyed after the People Bank of China holds first open market operation in 3-weeks to ease liquidity crunch panic. The People's Bank of China finally responded to the surge in money market rates by injecting 29 billion yuan on Tuesday via seven-day reverse repurchase agreements. It was the first time the PBOC added funding via its biweekly operations since December 3, though the bank said Friday that it added over 300 billion yuan via short-term liquidity operations at the end of last week.
Market gains were, however, limited amid concerns that 29 billion yuan won't make much of a dent in the cash demands of China's financial institutions while the PBOC's reliance on seven-day maturities highlights its unwillingness to provide longer-term funding. Further, the Chinese New Year holiday falls at the end of January and will create fresh strains on the system -- one-month rates already began responding to the onset of that holiday on Monday.
Among SSE sectors, 6/10 sectors of the SSE index advanced, with telecommunication services sector was best performer in the SSE sectoral indices, adding 1.8%, while healthcare issue was worst performer, falling 0.7%. Information technology sector advanced 1.4%, Consumer discretionary up 0.7%, utilities up 0.6% and industrials up 0.2%.
China's money markets rates declined from prior day on Tuesday, on calming jitters over liquidity crunch in the market after People's Bank of China finally responded to the surge in money market rates by injecting 29 billion yuan via seven-day reverse repurchase agreements. The seven-day repo rate, a gauge of borrowing costs among banks and usually watched as an indicator of liquidity stress, traded at a weighted average of 7.00% by late afternoon compared with 7.50% prior day. The overnight repo, a benchmark measure of interbank funding availability, traded at a weighted average of 4.15% compared with 4.62 % previous day.
Hong Kong, shares in Hong Kong market trekked higher in quiet trade, with financials and some names with strong global exposure gaining ground after a solid advance for U.S. shares overnight. The benchmark Hang Seng Index was provisionally ending 257.99 points higher at 23179.55 in the shortened session.
Among the HK 50 blue chips, 49 rose and one fell. Hang Lung Properties (00101) put on 2.7% to HK$24.45, while COSCO Pacific (01199) dipped 0.19% to HK$10.5, making themselves the largest blue-chip gainer and loser respectively.
Market heavyweights were higher. China Mobile (00941) edged up 0.5% to HK$80.95, while HSBC (00005) gained 1.2% to HK$83.5.
Major mainland banks traded broadly higher in Hong Kong after the People's Bank of China added liquidity to the financial system. Agricultural Bank of China climbed 1.34%, Bank of Communications Co rose 1.9%, and Industrial & Commercial Bank of China added 1.35%. Strong gains for financials also pushed international lenders higher, with HSBC Holdings up 1.15% and Standard Chartered added 2.15%.
Elsewhere, China Everbright gained 5.76% on news it was selling some shares of China Everbright Bank Co, which sank 1.3%, extending losses since its trading debut last week.
Shares of FIH Mobile, part of the Foxconn group, gained 9.69%, after the firm said it would swing to a profit for 2013. The stock had enjoyed strong gains in the previous session on news of a partnership with BlackBerry.
India- A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 22.92 points or 0.11%, up about 60 points from the day's low and off close to 75 points from the day's high.
Among the 30-share Sensex pack, 19 stocks declined and rest of them rose. Tata Power Company (down 2.53%), Sesa Sterlite (down 2.33%) and Wipro (down 1.47%) declined.
ICICI Bank gained 0.29%. ICICI Bank on 21 December 2013 said it has cut its home loan rates for new customers by 15 basis points or 0.15 percentage points, as a part of a special scheme. It will be valid till 31 January 2014. Under the scheme, the bank will offer home loans up to Rs. 75 lakh at an interest rate of 10.25%, while loans above Rs. 75 lakh will be charged 10.50%.
Kirloskar Electric Company fell 0.75%. The company said it has successfully exported a generator duty transformer of 24/30 MVA, 115/38.5/10.5 kV for a hydro-electric project in Song-Giang, Vietnam. The announcement was made after market hours on Monday, 23 December 2013. Separately, Kirloskar Electric Company said that the lay-off at the company's factory situated in Mysore has been extended till 24 January 2014.
Elsewhere in the region, South Korea's KOSPI rose 0.24%. Indonesia's Jakarta Composite index added 0.32%. New Zealand's NZX50 index jumped 0.96%. Singapore's Straits Times index gained 0.36%. Malaysia's KLSE Composite added 0.14%. Taiwan's Taiex index shed 0.1%.
