Asia Pacific share market advanced on Thursday, 22 May 2014, as appetite
for risker assets buoyed up on tracking strength from global markets
last night, thanks to comments from the U.S. central bank hinting rates
are likely to remain at rock bottom levels for longer.
Meanwhile, buying momentum accelerated on better than forecasted preliminary data on China's manufacturing industry.
Regional market commenced trading with front footing today, following gain in Wall Street overnight after the Federal Reserve's reassurance that interest rates would not rise anytime soon. The U.S. Fed meeting minutes confirmed that rates will remain low for a "considerable period" after the bond buying program ends.
The Fed began "tapering", or trimming, the bank's monthly bond buying purchases, known as quantitative easing, in January (although it announced the move in December). In April, the Fed announced it had cut its purchases to $45bn a month, from a high of $85bn. The Fed has kept its target rate at 0% since 2008, when it slashed rates in an effort to stimulate the economy and combat the recession. Most observers expect a rate rise in the latter half of 2015.
Further support came from upbeat Chinese factory activity data. The HSBC Flash Manufacturing PMI for April reflected a rise to 49.7, a five-month high and up from 48.1 last month while the flash output index rose to 50.3 from 47.9. While the PMI is just off the 50 point level that indicates growth, it is a sign the manufacturing sector has stabilised. The improvement in the PMI was broad-based with both new orders and new export orders back in expansionary territory, HSBC China chief economist Hongbin Qu said.
Among Asian bourses, Australian share market advanced, with every sector measured by the ASX rose, led by materials & resources and energy shares, thanks to strong lead from Wall Street overnight and better than expected flash reading on Chinese manufacturing. The benchmark S&P/ASX200 and the broader All Ordinaries each rose by 1% to 5479.90 and 5458.10, respectively.
Shares in energy sectors went up, with Woodside Petroleum leading the rally, up by 1.2% to A$41.72 following an investor briefing on the heels of Wednesday's announcement it has abandoned an Israeli joint venture. Shareholders now expect a special dividend if the company cannot identify a new investment opportunity. Rumoured Woodside takeover target Oil Search added 1.2% to A$9.25. Origin Energy rose by 1.9% to A$15.23 and Santos 1% to A$14.17.
Gains in the shares of big four banks also helped propel the market higher. Commonwealth Bank of Australia rose 0.6% to A$80.65, while Westpac Banking Corporation added 0.6% to A$33.86. ANZ Banking Group lifted 1.2% to A$33.41 and National Australia Bank gained 1.5% to A$33.54.
Materials & resources stocks surged sharply, after a monthly measure of Chinese factory activity unexpectedly jumped to a five-month high. Fortescue Metals was up 3.6% to A$4.59. Rio Tinto added 2.6% to A$60.96, while rival BHP Billiton jumped 1.3% to A$37.67.
Building materials supplier James Hardie lifted 5.7% to $14.47 after showing full year profit rose 118.7%. The result was in the upper range of the company's guidance and investors welcomed a move to up the final dividend from 13 cents to 20 cents and pay out another special dividend of 20 cents.
Logistics group Qube Holdings jumped 6.4% to A$2.33 as its joint bid with industrial rail provider Aurizon won a government to develop an intermodal terminal at Moorebank in western Sydney. The freight hub, which is estimated to be a A$1 billion development, will facilitate the transfer of goods between trucks and trains.
Rare earths miner Lynas climbed up 9.1% to A$0.12 amid reports China, the world's biggest producer, is considering raising the taxes on rare earths
In New Zealand, equities on the New Zealand share market rose, as a five day slide gave investors confidence to buy companies offering dependable returns such as Argosy Property, Precinct Properties New Zealand, Goodman Property Trust and Kiwi Income Property Trust. The NZX 50 Index rose 20.267 points, or 0.4%, to 5128.840.
Heartland New Zealand rose 2.3% to 89 NZ cents, after international credit rating agency Standard & Poor's upgraded the lender's long term credit rating one notch to a BBB rating.
Chorus fell 2.3% to NZ$1.71 after the Commerce Commission extended the deadline for its final decision on the telecommunications network operator's copper pricing.
DNZ Property Fund, the sixth-biggest property stock on the NZX 50 Index by market capitalisation, was unchanged at NZ$1.60 after it posted an 8.7% drop in annual profit after writing down the value of some Wellington and Auckland holdings.
In Japan, Japanese share market ended sharp higher, as investors chased for risker assets across the board on dovish set of FOMC Meeting Minutes and significantly better-than-anticipated Chinese manufacturing PMI reading. Meanwhile, sharp decline in the yen against dollar and Japan Post Insurance Co plans to increase investment in domestic stocks also gave a lift to shares. The benchmark Nikkei index added 2.11% to 14337.79, while the Topix index of all first-section shares climbed 1.68% to 1169.34
Japan Post Insurance Co., which manages about $846 billion in assets, announced plans to increase investment in domestic stocks by as much as 350 billion yen ($3.4 billion) this fiscal year. Japan Post also plans to boost overseas bond holdings by the equivalent of $6.4 billion.
Japanese exporters were major gainer on the market today, with Companies that do business in China and the U.S. rose the most. Alps Electric Co., a maker of electronic parts that gets 16% of revenue from China, added 3.1% to 1,160 yen. Panasonic Corp, an electronics manufacturer that generates 15% of sales in the Americas, advanced 1.9% to 1,065 yen. Daikin gained 2.9% to 5,759 yen. Nissan increased 1.3% to 908 yen.
Financials were higher following news that government-controlled Japan Post Insurance Life will increase its investment in local stocks. Nomura closed 3.8% higher, Credit Saison ending up 2.7% and Sumitomo Mitsui Financial Group finishing nearly 2% higher.
Kansai Electric Power Co lost 4% to 902 yen after a court ruled against restarting its two reactors. The Fukui District Court said the need for nuclear power does not trump individuals' rights to safety.
Sanrio plunged 16% to 2,598 yen on brokerage houses cut in target price. Goldman Sachs Group Inc. revised down its targets for the company, citing a waning outlook for U.S. sales.
Mitsui Mining & Smelting Co. advanced 4.2% to 250 yen on brokerage houses upward revision in target price. The metal producer's price target was raised to 340 yen from 325 yen at Nomura Holdings Inc., with buy rating.
In China, Mainland China share market declined for the first time in three consecutive sessions, after washing out intraday gain spurred by better than expected flash reading on Chinese manufacturing for May. The benchmark Shanghai Composite finished 3.67 points lower at 2021.29, on turnover of 59.50 billion yuan. The benchmark index touched intraday peak of 2041.96.
The Chinese market rose during morning trading hour today, on tracking strength from global markets last night and better than forecasted preliminary data on China's manufacturing industry. But, Mainland shares entered negative territory right before the market close after trading at a one-week high throughout the session, due to late hour profit taking.
Property stocks rose despite a sector downgrade by Moody's late on Wednesday. China Vanke rose 1.9% to 7.89 yuan, while China Merchants Property added 1.7% to 16.95 yuan.
Gas stocks rose on news that China and Russia have signed a $400 billion gas deal. Changchun Gas Co rallied by the daily trading limit of 10% to 7.68 yuan.
In Hong Kong, HK stocks closed higher, , following upbeat Chinese factory activity data and the Federal Reserve's reassurance that interest rates would not rise anytime soon. The benchmark Hang Seng Index was up 117.24 points to 22953.76 on turnover of HK$62.52 billion.
Shares of financial companies went up, as market rumuors circulated that the PBoC released RMB300-500 billion to China Development Bank (CDB) and CCB (00939), with Chinese lenders listed in HK led the rally. Among banks, CCB, ICBC (13098) and ABC (01288) rose 1.4% to 1.5%. BankComm (03328), CM Bank (03968) and CQRC Bank (03618) also put on 1.7%. Citic Bank (00998) rose 1.9%.
Insurers were also higher, with Ping An (02318) rising 2.3% to HK$58.05 after the insurer said yesterday that it plans to separately listed its online loans and finance business. China Life (02628) jumped 2% to HK$20.45.
Solar silicon makers were higher on catch-up buying orders after the NDRC announced 80 projects to lure private investment, including five major industries of infrastructure, information, gas pipeline, clean energy and coal chemical. GCL-Poly (03800) soared 6.72% to HK$2.54. Xinyi Solar (00698) shot up 14% to HK$2.16. China Windpower (00182) added 7% to HK$0.61. C Transmission (00658) ascended 6.4%.
In India, key benchmark indices finished the session at near record high on renewed buying from funds and investors in consumer durables, realty, power and PSU sector stocks amid a firming trend in the global markets. The BSE barometer settled at 24374.40, up 76.38 points, or 0.31%. Meanwhile, the National Stock Exchange Nifty closed 23.50 points or 0.32% higher at a fresh record close of 7276.40.
Coal India jumped 4.84% to Rs 390.15 on reports that the newly elected PM designate Narendra Modi is exploring to break up the company and opening up the sector to foreign investment. The stock hit 52-week high of Rs 401 in intraday trade.
Maruti Suzuki India surged 4.14% to Rs 2,258 after a foreign brokerage put an aggressive three-year target of Rs 4,500 on the stock. The foreign brokerage said that the Maruti Suzuki India stock price could double in three years in a bull scenario in which personal vehicle industry volume grows at a compounded annual growth rate of 20% due to pent-up demand should the economic growth pick up.
Realty stocks were in demand on renewed buying. DLF (up 9.92%), Godrej Properties (up 2.37%), Indiabulls Real Estate (up 6.89%), Parsvnath Developers (up 4.98%), Housing Development & Infrastructure (HDIL) (up 4.71%), D B Realty (up 3.74%) and Unitech (up 9.02%) gained. Oberoi Realty dropped 1.6%. Sobha Developers shed 0.9%.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index jumped 1.21%. South Korea's KOSPI index was up 0.36%. New Zealand's NZX50 added 0.4%. Singapore's Straits Times index rose 0.12%. Indonesia's Jakarta Composite Index added 1.21%. Malaysia's KLSE Composite declined 0.1%.
Meanwhile, buying momentum accelerated on better than forecasted preliminary data on China's manufacturing industry.
Regional market commenced trading with front footing today, following gain in Wall Street overnight after the Federal Reserve's reassurance that interest rates would not rise anytime soon. The U.S. Fed meeting minutes confirmed that rates will remain low for a "considerable period" after the bond buying program ends.
The Fed began "tapering", or trimming, the bank's monthly bond buying purchases, known as quantitative easing, in January (although it announced the move in December). In April, the Fed announced it had cut its purchases to $45bn a month, from a high of $85bn. The Fed has kept its target rate at 0% since 2008, when it slashed rates in an effort to stimulate the economy and combat the recession. Most observers expect a rate rise in the latter half of 2015.
Further support came from upbeat Chinese factory activity data. The HSBC Flash Manufacturing PMI for April reflected a rise to 49.7, a five-month high and up from 48.1 last month while the flash output index rose to 50.3 from 47.9. While the PMI is just off the 50 point level that indicates growth, it is a sign the manufacturing sector has stabilised. The improvement in the PMI was broad-based with both new orders and new export orders back in expansionary territory, HSBC China chief economist Hongbin Qu said.
Among Asian bourses, Australian share market advanced, with every sector measured by the ASX rose, led by materials & resources and energy shares, thanks to strong lead from Wall Street overnight and better than expected flash reading on Chinese manufacturing. The benchmark S&P/ASX200 and the broader All Ordinaries each rose by 1% to 5479.90 and 5458.10, respectively.
Shares in energy sectors went up, with Woodside Petroleum leading the rally, up by 1.2% to A$41.72 following an investor briefing on the heels of Wednesday's announcement it has abandoned an Israeli joint venture. Shareholders now expect a special dividend if the company cannot identify a new investment opportunity. Rumoured Woodside takeover target Oil Search added 1.2% to A$9.25. Origin Energy rose by 1.9% to A$15.23 and Santos 1% to A$14.17.
Gains in the shares of big four banks also helped propel the market higher. Commonwealth Bank of Australia rose 0.6% to A$80.65, while Westpac Banking Corporation added 0.6% to A$33.86. ANZ Banking Group lifted 1.2% to A$33.41 and National Australia Bank gained 1.5% to A$33.54.
Materials & resources stocks surged sharply, after a monthly measure of Chinese factory activity unexpectedly jumped to a five-month high. Fortescue Metals was up 3.6% to A$4.59. Rio Tinto added 2.6% to A$60.96, while rival BHP Billiton jumped 1.3% to A$37.67.
Building materials supplier James Hardie lifted 5.7% to $14.47 after showing full year profit rose 118.7%. The result was in the upper range of the company's guidance and investors welcomed a move to up the final dividend from 13 cents to 20 cents and pay out another special dividend of 20 cents.
Logistics group Qube Holdings jumped 6.4% to A$2.33 as its joint bid with industrial rail provider Aurizon won a government to develop an intermodal terminal at Moorebank in western Sydney. The freight hub, which is estimated to be a A$1 billion development, will facilitate the transfer of goods between trucks and trains.
Rare earths miner Lynas climbed up 9.1% to A$0.12 amid reports China, the world's biggest producer, is considering raising the taxes on rare earths
In New Zealand, equities on the New Zealand share market rose, as a five day slide gave investors confidence to buy companies offering dependable returns such as Argosy Property, Precinct Properties New Zealand, Goodman Property Trust and Kiwi Income Property Trust. The NZX 50 Index rose 20.267 points, or 0.4%, to 5128.840.
Heartland New Zealand rose 2.3% to 89 NZ cents, after international credit rating agency Standard & Poor's upgraded the lender's long term credit rating one notch to a BBB rating.
Chorus fell 2.3% to NZ$1.71 after the Commerce Commission extended the deadline for its final decision on the telecommunications network operator's copper pricing.
DNZ Property Fund, the sixth-biggest property stock on the NZX 50 Index by market capitalisation, was unchanged at NZ$1.60 after it posted an 8.7% drop in annual profit after writing down the value of some Wellington and Auckland holdings.
In Japan, Japanese share market ended sharp higher, as investors chased for risker assets across the board on dovish set of FOMC Meeting Minutes and significantly better-than-anticipated Chinese manufacturing PMI reading. Meanwhile, sharp decline in the yen against dollar and Japan Post Insurance Co plans to increase investment in domestic stocks also gave a lift to shares. The benchmark Nikkei index added 2.11% to 14337.79, while the Topix index of all first-section shares climbed 1.68% to 1169.34
Japan Post Insurance Co., which manages about $846 billion in assets, announced plans to increase investment in domestic stocks by as much as 350 billion yen ($3.4 billion) this fiscal year. Japan Post also plans to boost overseas bond holdings by the equivalent of $6.4 billion.
Japanese exporters were major gainer on the market today, with Companies that do business in China and the U.S. rose the most. Alps Electric Co., a maker of electronic parts that gets 16% of revenue from China, added 3.1% to 1,160 yen. Panasonic Corp, an electronics manufacturer that generates 15% of sales in the Americas, advanced 1.9% to 1,065 yen. Daikin gained 2.9% to 5,759 yen. Nissan increased 1.3% to 908 yen.
Financials were higher following news that government-controlled Japan Post Insurance Life will increase its investment in local stocks. Nomura closed 3.8% higher, Credit Saison ending up 2.7% and Sumitomo Mitsui Financial Group finishing nearly 2% higher.
Kansai Electric Power Co lost 4% to 902 yen after a court ruled against restarting its two reactors. The Fukui District Court said the need for nuclear power does not trump individuals' rights to safety.
Sanrio plunged 16% to 2,598 yen on brokerage houses cut in target price. Goldman Sachs Group Inc. revised down its targets for the company, citing a waning outlook for U.S. sales.
Mitsui Mining & Smelting Co. advanced 4.2% to 250 yen on brokerage houses upward revision in target price. The metal producer's price target was raised to 340 yen from 325 yen at Nomura Holdings Inc., with buy rating.
In China, Mainland China share market declined for the first time in three consecutive sessions, after washing out intraday gain spurred by better than expected flash reading on Chinese manufacturing for May. The benchmark Shanghai Composite finished 3.67 points lower at 2021.29, on turnover of 59.50 billion yuan. The benchmark index touched intraday peak of 2041.96.
The Chinese market rose during morning trading hour today, on tracking strength from global markets last night and better than forecasted preliminary data on China's manufacturing industry. But, Mainland shares entered negative territory right before the market close after trading at a one-week high throughout the session, due to late hour profit taking.
Property stocks rose despite a sector downgrade by Moody's late on Wednesday. China Vanke rose 1.9% to 7.89 yuan, while China Merchants Property added 1.7% to 16.95 yuan.
Gas stocks rose on news that China and Russia have signed a $400 billion gas deal. Changchun Gas Co rallied by the daily trading limit of 10% to 7.68 yuan.
In Hong Kong, HK stocks closed higher, , following upbeat Chinese factory activity data and the Federal Reserve's reassurance that interest rates would not rise anytime soon. The benchmark Hang Seng Index was up 117.24 points to 22953.76 on turnover of HK$62.52 billion.
Shares of financial companies went up, as market rumuors circulated that the PBoC released RMB300-500 billion to China Development Bank (CDB) and CCB (00939), with Chinese lenders listed in HK led the rally. Among banks, CCB, ICBC (13098) and ABC (01288) rose 1.4% to 1.5%. BankComm (03328), CM Bank (03968) and CQRC Bank (03618) also put on 1.7%. Citic Bank (00998) rose 1.9%.
Insurers were also higher, with Ping An (02318) rising 2.3% to HK$58.05 after the insurer said yesterday that it plans to separately listed its online loans and finance business. China Life (02628) jumped 2% to HK$20.45.
Solar silicon makers were higher on catch-up buying orders after the NDRC announced 80 projects to lure private investment, including five major industries of infrastructure, information, gas pipeline, clean energy and coal chemical. GCL-Poly (03800) soared 6.72% to HK$2.54. Xinyi Solar (00698) shot up 14% to HK$2.16. China Windpower (00182) added 7% to HK$0.61. C Transmission (00658) ascended 6.4%.
In India, key benchmark indices finished the session at near record high on renewed buying from funds and investors in consumer durables, realty, power and PSU sector stocks amid a firming trend in the global markets. The BSE barometer settled at 24374.40, up 76.38 points, or 0.31%. Meanwhile, the National Stock Exchange Nifty closed 23.50 points or 0.32% higher at a fresh record close of 7276.40.
Coal India jumped 4.84% to Rs 390.15 on reports that the newly elected PM designate Narendra Modi is exploring to break up the company and opening up the sector to foreign investment. The stock hit 52-week high of Rs 401 in intraday trade.
Maruti Suzuki India surged 4.14% to Rs 2,258 after a foreign brokerage put an aggressive three-year target of Rs 4,500 on the stock. The foreign brokerage said that the Maruti Suzuki India stock price could double in three years in a bull scenario in which personal vehicle industry volume grows at a compounded annual growth rate of 20% due to pent-up demand should the economic growth pick up.
Realty stocks were in demand on renewed buying. DLF (up 9.92%), Godrej Properties (up 2.37%), Indiabulls Real Estate (up 6.89%), Parsvnath Developers (up 4.98%), Housing Development & Infrastructure (HDIL) (up 4.71%), D B Realty (up 3.74%) and Unitech (up 9.02%) gained. Oberoi Realty dropped 1.6%. Sobha Developers shed 0.9%.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index jumped 1.21%. South Korea's KOSPI index was up 0.36%. New Zealand's NZX50 added 0.4%. Singapore's Straits Times index rose 0.12%. Indonesia's Jakarta Composite Index added 1.21%. Malaysia's KLSE Composite declined 0.1%.
