Asia Pacific share market declined on Monday, 6 January 2014, as
profit-taking in most sectors of the markets after a gauge of China's
services industries dropped, signalling growth may slow in the world
second-biggest economy.
Investment rationale turned further bearish after data showed growth in China's services sector slowed sharply in December. HSBC China services Purchasing Managers' Index fell to 50.9 in December from 52.5 in November. New order growth reported by the service providers in December was the weakest in six months, HSBC said.
A PMI survey of the services industry by Markit Economics and HSBC came after official service PMI released on Friday (3 January 2014) showed growth in China's services sector fell to a four-month low in December. The official purchasing managers' index (PMI) for the non-manufacturing sector dropped to 54.6 in December from November's 56, the National Bureau of Statistics said on Friday.
The services PMI follows two manufacturing PMIs out last week that showed growth in China's factories slowing in December as export orders weakened. The manufacturing Purchasing Managers' Index compiled by HSBC and Markit (released on Thursday, 2 January 2014) stood at 50.5, unchanged from the initial flash reading released earlier last month, but lower than the final November print of 50.8, indicating weakness in the Chinese manufacturing sector. The HSBC report came one day after the official Purchasing Managers' Index (PMI), published by the National Bureau of Statistics, dipped to 51.0 in December from November's 51.4, as export orders and output weakened.
Turnover across the region was relatively light as investors across the region were positioning themselves ahead of key data due this week. Investors are waiting to scrutinize the minutes of the Federal Reserve's December meeting amid expectations it might accelerate the pace of reducing its monetary stimulus on the back of rising economic momentum. Manufacturing, payrolls and trade balance data due this week will reveal if U.S. economic recovery can be sustained.
In China, trade, inflation and loans data due later in the week which expected to colour regional sentiments. Two surveys last week showed manufacturing activity has weakened in December, which analysts said pointed to a downturn in business cycle.
Among Asian bourses, shares in the Tokyo market finished first trading session of Calendar Year 2014 with sour note, as investors opted cashing out profit off the table after market rallied to highest level in six years in 2013. Meanwhile, strengthening yen and disappointing China economic data also intensified selling. The benchmark Nikkei Stocks Average tanked 2.35% to finish the session at 15908.88. The benchmark surged about 57% YoY in 2013.
Export related shares were biggest decliner in the Tokyo market due to hardening of Yen against the US dollar, which eats overseas earnings when repatriated home. The dollar slipped to 104.33 yen from 104.85 yen in New York Friday, and well off the 105.41 yen it hit at the start of last week, which was a five-year high.
Sharp Corp dropped 2.1%, Komatsu 2.20% and Advantest Corp. 4.13%. Auto makers also lost ground, with Toyota Motor Corp down 1.87% and Honda Motor Co. 1.27% lower despite a Nikkei news report saying the firm was hiking its annual domestic-sales target more than 20% than that for the previous year. However, Nissan Motor Co. rose 1.58% after posting increase of more than 10% in U.S. sales for December.
Toshiba Corp. also bucked the downtrend, improving by 0.9% as a separate Nikkei report said it and South Korea's SK Hynix Inc. would beat out U.S. rival Micron Technology Inc. in production of next-generation memory chips, due out as early as fiscal 2016.
Japans headline Business Activity Index rose to 52.1 from Novembers three-month low of 51.8. This reading signalled a small acceleration in the rate of business activity growth and continued the longest sequence of expansion to date. Services business activity expanded for the fourteenth successive month in December, Markit Economics reported Monday. At the same time, the Composite Output Index was unchanged in December, at 54.0, signalling a solid expansion. New business at Japanese service providers increased for the fifth consecutive month in December. As a result, business sentiment among service providers improved sharply. However, staffing levels in services dropped fractionally following a four-month sequence of expansion. Prices charged by service providers rose at the sharpest rate in seven months in December. Service sector input prices rose for a fourteenth month, albeit at a slower pace.
In Australia, Australian stocks declined for second consecutive session, with the benchmark S&P/ASX 200 Index down by 25.20 points to 5324.90, as investors cashing in profit amid more evidence that the world's second-biggest economy is starting the new year sluggishly.
Selling in the Sydney market also fueled by data showing the Australian Industry Group Australian Performance of Services Index slipped 2.8 points to 46.1 in December, indicating the sector is contracting. The index had previously risen for three consecutive months since September, the month of the federal election, reaching a high of 48.9 points in November.
All sectors slipped into the red, with miners and energy players lead retreat on slumping commodity prices. Metals and mining was the worst-performing ¬sector in Sydney bourse, with BHP Billiton falling 0.6% to A$37.56 and Rio Tinto loosing 0.9% to A$67.75. Fortescue Metals lost 1.9% to A$5.71.
Energy stocks went lower on tracking drop in crude-oil futures prices, with the Woodside Petroleum down 1.1% to A$37.70, while Karoon Gas Australia shed 5.06% to A$4.13 and Santos lost 1.6% to A$14.33.
The big four banks were mostly lower on Monday. ANZ and Westpac each dropped 0.7% to A$31.99 and A$32.12 respectively, while National Australia Bank fell 0.4% to A$34.55. Commonwealth Bank edged up 2 cents to A$77.60.
In China, shares in the mainland China's financial market dropped to its lowest level in five months, after data showed the services sectors in China softened in December. Selloff pressure in the Shanghai market also attributed to mainland's tightened liquidity and the re-launch of A-share IPO after a moratorium on new listings since late 2012.
The benchmark Shanghai Composite index declined 37.43 points to finish at 2045.71, while the CSI 300 Index dropped 52.14 points to close at 2238.64. The gauge has slumped 3.3% in the first three trading days of 2014.
Selling pressure dominated the market amid concerns about the impact of a reopened initial-public-offering market continued to weigh on local sentiment. Fifteen companies published their IPO prospectuses on the Shanghai and Shenzhen exchanges on Monday. Last week, five companies were granted approval to start marketing deals. Before the suspension of IPOs, China's domestic stock market had been weighed for several years by a constant supply of shares of new companies coming to the market.
HSBC's China services Purchasing Managers' Index also weighed on sentiment. The gauge of expansion intentions in the services sector fell to 50.9 in December from 52.5 in November. This followed numbers released last week that showed a deceleration in both China manufacturing and services sectors.
Shares of rail-related stocks tumbled the most, with China Railway Group down nearly 5% after the company said its president died in an accident. CSR Corp., the nation's biggest train maker, fell 3.9%.
Shares of coal producers dropped on reports spot coal prices may extend declines in the near term amid stable inventory at Qinhuangdao Port and rising production in Shanxi province, China Shenhua Energy Co. dropped 3.5%.
In Hong Kong, shares in city bourses extended losing streak as weaker Chinese economic data triggered profit-taking in most sectors of the market. The benchmark Hang Seng Index provisionally ended 133.13 points lower at 22684.15, while Hang Seng China Enterprises Index lost 146.21 points to 10290.55.
Among the HK 50 blue chips, 41 fell and two rose, with seven stocks remaining steady. Galaxy Ent added 1.2% to HK$71.5, while China Merchants fell 3.4% to HK$26.7, making themselves the biggest blue-chip gainer and loser.
Mainland developers were softer. COLI (00688) weakened 2.6% to HK$20.9. CR Land (01109) dipped 1.5% to HK$18.84. Shimao Property (00813) plunged 3.6% to HK$17.16.
Elsewhere, HKTV (01137) slid 3.9% to HK$3.46 on news that China Mobile's parent triggered an internal probe on the mainland carrier's proposed sale of its mobile TV assets to HKTV.
In India, key benchmark indices edged lower on first trading day of the week after Markit Economics said business conditions in the Indian private sector economy continued to deteriorate in December 2013. The S&P BSE Sensex lost 64.06 points or 0.31% to settle at 20,787.30, its lowest closing level since 19 December 2013.
In the foreign exchange market, Indian rupee edged lower against the dollar as the US Federal Reserve prepared to start cutting bond purchases amid data that signaled the recovery of the world's biggest economy is picking up speed.
Indian index heavyweight and cigarette major ITC extended gains in late trade. Index heavyweight Reliance Industries declined in volatile trade. Hero MotoCorp dropped. Infosys edged lower in volatile trade. Tata Consultancy Services (TCS) edged higher in volatile trade.
In the pharma pack, Lupin and Aurobindo Pharma scaled record highs. Bank stocks dropped. Shares of offshore oil services providers edged higher on renewed buying. Shares of fast moving electrical goods (FMEG) company Havells India hit record high. Telecom stocks were mixed after the Delhi High Court today, 6 January 2014, upheld the TDSAT order of an audit of private telecom companies and allowed the Comptroller and Auditor General to audit the accounts of the companies. Shares of realty firm Sobha Developers dropped after the company said that its sales volume declined in Q3 December 2013 over Q3 December 2012.
Elsewhere in the region, New Zealand's NZX50 index shed 0.1%. Indonesia's Jakarta Composite index lost 1.3%. South Korea's KOSPI jumped 0.4%. Taiwan's Taiex index shed 0.5%. Malaysia's KLSE Composite dropped 0.3%. Singapore's Straits Times index fell 0.2%.
Investment rationale turned further bearish after data showed growth in China's services sector slowed sharply in December. HSBC China services Purchasing Managers' Index fell to 50.9 in December from 52.5 in November. New order growth reported by the service providers in December was the weakest in six months, HSBC said.
A PMI survey of the services industry by Markit Economics and HSBC came after official service PMI released on Friday (3 January 2014) showed growth in China's services sector fell to a four-month low in December. The official purchasing managers' index (PMI) for the non-manufacturing sector dropped to 54.6 in December from November's 56, the National Bureau of Statistics said on Friday.
The services PMI follows two manufacturing PMIs out last week that showed growth in China's factories slowing in December as export orders weakened. The manufacturing Purchasing Managers' Index compiled by HSBC and Markit (released on Thursday, 2 January 2014) stood at 50.5, unchanged from the initial flash reading released earlier last month, but lower than the final November print of 50.8, indicating weakness in the Chinese manufacturing sector. The HSBC report came one day after the official Purchasing Managers' Index (PMI), published by the National Bureau of Statistics, dipped to 51.0 in December from November's 51.4, as export orders and output weakened.
Turnover across the region was relatively light as investors across the region were positioning themselves ahead of key data due this week. Investors are waiting to scrutinize the minutes of the Federal Reserve's December meeting amid expectations it might accelerate the pace of reducing its monetary stimulus on the back of rising economic momentum. Manufacturing, payrolls and trade balance data due this week will reveal if U.S. economic recovery can be sustained.
In China, trade, inflation and loans data due later in the week which expected to colour regional sentiments. Two surveys last week showed manufacturing activity has weakened in December, which analysts said pointed to a downturn in business cycle.
Among Asian bourses, shares in the Tokyo market finished first trading session of Calendar Year 2014 with sour note, as investors opted cashing out profit off the table after market rallied to highest level in six years in 2013. Meanwhile, strengthening yen and disappointing China economic data also intensified selling. The benchmark Nikkei Stocks Average tanked 2.35% to finish the session at 15908.88. The benchmark surged about 57% YoY in 2013.
Export related shares were biggest decliner in the Tokyo market due to hardening of Yen against the US dollar, which eats overseas earnings when repatriated home. The dollar slipped to 104.33 yen from 104.85 yen in New York Friday, and well off the 105.41 yen it hit at the start of last week, which was a five-year high.
Sharp Corp dropped 2.1%, Komatsu 2.20% and Advantest Corp. 4.13%. Auto makers also lost ground, with Toyota Motor Corp down 1.87% and Honda Motor Co. 1.27% lower despite a Nikkei news report saying the firm was hiking its annual domestic-sales target more than 20% than that for the previous year. However, Nissan Motor Co. rose 1.58% after posting increase of more than 10% in U.S. sales for December.
Toshiba Corp. also bucked the downtrend, improving by 0.9% as a separate Nikkei report said it and South Korea's SK Hynix Inc. would beat out U.S. rival Micron Technology Inc. in production of next-generation memory chips, due out as early as fiscal 2016.
Japans headline Business Activity Index rose to 52.1 from Novembers three-month low of 51.8. This reading signalled a small acceleration in the rate of business activity growth and continued the longest sequence of expansion to date. Services business activity expanded for the fourteenth successive month in December, Markit Economics reported Monday. At the same time, the Composite Output Index was unchanged in December, at 54.0, signalling a solid expansion. New business at Japanese service providers increased for the fifth consecutive month in December. As a result, business sentiment among service providers improved sharply. However, staffing levels in services dropped fractionally following a four-month sequence of expansion. Prices charged by service providers rose at the sharpest rate in seven months in December. Service sector input prices rose for a fourteenth month, albeit at a slower pace.
In Australia, Australian stocks declined for second consecutive session, with the benchmark S&P/ASX 200 Index down by 25.20 points to 5324.90, as investors cashing in profit amid more evidence that the world's second-biggest economy is starting the new year sluggishly.
Selling in the Sydney market also fueled by data showing the Australian Industry Group Australian Performance of Services Index slipped 2.8 points to 46.1 in December, indicating the sector is contracting. The index had previously risen for three consecutive months since September, the month of the federal election, reaching a high of 48.9 points in November.
All sectors slipped into the red, with miners and energy players lead retreat on slumping commodity prices. Metals and mining was the worst-performing ¬sector in Sydney bourse, with BHP Billiton falling 0.6% to A$37.56 and Rio Tinto loosing 0.9% to A$67.75. Fortescue Metals lost 1.9% to A$5.71.
Energy stocks went lower on tracking drop in crude-oil futures prices, with the Woodside Petroleum down 1.1% to A$37.70, while Karoon Gas Australia shed 5.06% to A$4.13 and Santos lost 1.6% to A$14.33.
The big four banks were mostly lower on Monday. ANZ and Westpac each dropped 0.7% to A$31.99 and A$32.12 respectively, while National Australia Bank fell 0.4% to A$34.55. Commonwealth Bank edged up 2 cents to A$77.60.
In China, shares in the mainland China's financial market dropped to its lowest level in five months, after data showed the services sectors in China softened in December. Selloff pressure in the Shanghai market also attributed to mainland's tightened liquidity and the re-launch of A-share IPO after a moratorium on new listings since late 2012.
The benchmark Shanghai Composite index declined 37.43 points to finish at 2045.71, while the CSI 300 Index dropped 52.14 points to close at 2238.64. The gauge has slumped 3.3% in the first three trading days of 2014.
Selling pressure dominated the market amid concerns about the impact of a reopened initial-public-offering market continued to weigh on local sentiment. Fifteen companies published their IPO prospectuses on the Shanghai and Shenzhen exchanges on Monday. Last week, five companies were granted approval to start marketing deals. Before the suspension of IPOs, China's domestic stock market had been weighed for several years by a constant supply of shares of new companies coming to the market.
HSBC's China services Purchasing Managers' Index also weighed on sentiment. The gauge of expansion intentions in the services sector fell to 50.9 in December from 52.5 in November. This followed numbers released last week that showed a deceleration in both China manufacturing and services sectors.
Shares of rail-related stocks tumbled the most, with China Railway Group down nearly 5% after the company said its president died in an accident. CSR Corp., the nation's biggest train maker, fell 3.9%.
Shares of coal producers dropped on reports spot coal prices may extend declines in the near term amid stable inventory at Qinhuangdao Port and rising production in Shanxi province, China Shenhua Energy Co. dropped 3.5%.
In Hong Kong, shares in city bourses extended losing streak as weaker Chinese economic data triggered profit-taking in most sectors of the market. The benchmark Hang Seng Index provisionally ended 133.13 points lower at 22684.15, while Hang Seng China Enterprises Index lost 146.21 points to 10290.55.
Among the HK 50 blue chips, 41 fell and two rose, with seven stocks remaining steady. Galaxy Ent added 1.2% to HK$71.5, while China Merchants fell 3.4% to HK$26.7, making themselves the biggest blue-chip gainer and loser.
Mainland developers were softer. COLI (00688) weakened 2.6% to HK$20.9. CR Land (01109) dipped 1.5% to HK$18.84. Shimao Property (00813) plunged 3.6% to HK$17.16.
Elsewhere, HKTV (01137) slid 3.9% to HK$3.46 on news that China Mobile's parent triggered an internal probe on the mainland carrier's proposed sale of its mobile TV assets to HKTV.
In India, key benchmark indices edged lower on first trading day of the week after Markit Economics said business conditions in the Indian private sector economy continued to deteriorate in December 2013. The S&P BSE Sensex lost 64.06 points or 0.31% to settle at 20,787.30, its lowest closing level since 19 December 2013.
In the foreign exchange market, Indian rupee edged lower against the dollar as the US Federal Reserve prepared to start cutting bond purchases amid data that signaled the recovery of the world's biggest economy is picking up speed.
Indian index heavyweight and cigarette major ITC extended gains in late trade. Index heavyweight Reliance Industries declined in volatile trade. Hero MotoCorp dropped. Infosys edged lower in volatile trade. Tata Consultancy Services (TCS) edged higher in volatile trade.
In the pharma pack, Lupin and Aurobindo Pharma scaled record highs. Bank stocks dropped. Shares of offshore oil services providers edged higher on renewed buying. Shares of fast moving electrical goods (FMEG) company Havells India hit record high. Telecom stocks were mixed after the Delhi High Court today, 6 January 2014, upheld the TDSAT order of an audit of private telecom companies and allowed the Comptroller and Auditor General to audit the accounts of the companies. Shares of realty firm Sobha Developers dropped after the company said that its sales volume declined in Q3 December 2013 over Q3 December 2012.
Elsewhere in the region, New Zealand's NZX50 index shed 0.1%. Indonesia's Jakarta Composite index lost 1.3%. South Korea's KOSPI jumped 0.4%. Taiwan's Taiex index shed 0.5%. Malaysia's KLSE Composite dropped 0.3%. Singapore's Straits Times index fell 0.2%.
