Asia pacific shares closed mixed on Tuesday, 17 June 2014, as investors
trimmed risk holdings amidst geopolitical concerns in Iraq together with
a downgrade for US growth estimates. The MSCI Asia Pacific Index lost
less than 0.1%.
An escalation of violence in the Middle East pushed oil prices higher and contributed to declines in Asia-Pacific equities. In Iraq, Kurdish troops are defending the fourth-largest oilfield against Islamist militants. Army troops killed more than 270 rebels yesterday in Iraq, OPEC's second-biggest crude producer, as the prospect of civil war intensifies with Sunni Muslim insurgents controlling territory north of Baghdad.
The International Monetary Fund yesterday cut its economic growth forecast for the U.S. in 2014. The IMF now sees expansion of 2%, down from an April estimate of 2.8%, while it left its 2015 prediction unchanged at 3%.
Trading turnover was generally quiet, as markets waited for the conclusion of the Federal Reserve's policy meeting on Wednesday, which will give an update on the direction of monetary policy in the world's largest economy.
Among Asian bourses
Miners sink Australia market
Australian share market declined amidst continued iron ore weakness, geopolitical concerns in Iraq and Russia together with a downgrade for US growth estimates. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 0.2% to 5400.70 and 5380.70, respectively.
Sydney shares took a soft lead from offshore after equities in the United States edged higher, while London's FTSE moved modestly lower. Investors are cautious amid increasing geo-political risk in Iraq, and waiting on announcements from the US Federal Reserve and Bank of England on Wednesday night for any hints as to the future direction of global monetary policy.
Today was one of the busier days for economic news locally, with the results of a weekly consumer confidence survey, RBA Board minutes, data on car sales and a quarterly publication on agricultural commodities issued. The highlight though is the RBA's latest board meeting minutes. Comments suggest that Australia's central bank is in no rush to lift interest rates.
Shares of material and resources companies declined after the price of iron ore fell below US$90 per tonne last night for the first time since September 2012. The weaker ore price is squeezing profit margins for global producers of the metal. Resources giant BHP Billiton dropped 0.7% to A$35.36. Main rival Rio Tinto lost 1% to A$57.45. Fortescue Metals Group declined 3% to A$3.94.
Energy stocks were weaker as investors booked profit following recent surge on spike in crude oil price. The price of oil was largely flat overnight; however surged by 4% last week partly due to violence in Iraq. Origin Energy was down 0.2% to A$14.28, Santos 1.5% to A$14.50 and Oil Search 0.5% to A$9.77.
Australia's biggest oil producer Woodside Petroleum was in trading halt after announcing that Royal Dutch Shell PLC will sell 19% of it´s holding in WPL in a transaction that will yield A$6.1 billion. 50% of the shares will be sold to institutional investors, while Woodside would buy the remainder 78 million shares (9.5% of the company) from Shell at a discounted price of A$36.49. Shell will retain a 4.1% stake.
The retailers were mostly firmer, with the latest weekly ANZ/Roy Morgan survey results on consumer confidence rising 1%. Myer was up 1% to A$2.02 while surfwear retailer Billabong (BBG) rose 4% to A$0.515. David Jones added 0.5% to A$3.88 on heavy volume ahead of an investor meeting on South Africa's Woolworths' bid.
Gambling was the best performing sub-sector after casino operator Echo Entertainment upgraded its profit guidance on Monday. Echo added another 2.7% to A$3.06, while Tatts Group, Aristocrat Leisure, and Tabcorp all rose on the positive sentiment for the sector.
Nikkei bounces 0.3%
Japan market closed higher, recovering slightly from a sharp fall in the previous session, supported by a weaker yen, which stabilized after the dollar softened overnight. But, jitters over the growing unrest in Iraq capped gains. The benchmark Nikkei 225 index grew 0.29% to finish at 14975.97, while the Topix index of all first-section shares added 0.29% to 1238.20.
Investors took advantage of cheaper valuations after the Nikkei tumbled more than 1% on Monday in reaction to the fighting in Iraq, where militants are sweeping towards Baghdad after taking over several towns. Meanwhile, buoyant dollar and higher Wall Street stocks supported the Japanese market.
In foreign exchange trade, the greenback was last trading at 102.03 yen, compared with 101.83 yen late Monday in the New York. A weaker yen is positive for exporters' shares as it improves their profitability.
Shares of exporters and inflation-sensitive stocks such as brokerages and real estate companies climbed up, on the back of yen weakening against the US dollar. Daikin Industries gained 1.8% to 6351 yen and Canon Inc rose 0.2% to 3391 yen while Uniqlo clothing chain operator Fast Retailing added 0.30% to end at 33250 yen. Among financials, Daiwa Securities Group rose 0.7% to 853 yen.
Casino-related stocks rose sharply on speculative buying following afternoon news that Japan will begin legislative procedures Wednesday to eventually legalize casino gambling. Konami Corp rose 2.1% to 2300 yen, while Sega Sammy Holdings added 2.6% and Japan Cash Machine surged 8.4%.
Kobe Bussan Co. slumped 3.9% to 2,969 yen after the Japanese supermarket operator's first-half net income plunged.
Mitsubishi Heavy Industries fell 1.42% to 621 yen after the Japanese giant and Germany's Siemens on Monday unveiled the terms of their joint bid for the energy assets of French industrial jewel Alstom, also coveted by US industry giant General Electric
Shares of SoftBank Corp declined 2.5% to 7483 yen on concerns over the growth rate at its Chinese e-commerce affiliate Alibaba Group Holdings, in which it owns a 34% stake. Alibaba, which will list its shares in the U.S. this autumn, reported that its quarterly operating margin fell to 45.3% from 51.3% a year ago.
China market ends 0.92% down
Mainland China share market declined on Tuesday, 17 June 2014, as profit booking triggered across the board after the key bourses surged to highest level in two-month yesterday and as foreign direct investment in the world's second-largest economy unexpectedly declined. The benchmark Shanghai Composite closed 0.92% down from prior day to 2066.70. Market turnover decreased to 70.92 billion yuan from yesterday's 79.95 billion yuan.
The Ministry of Commerce said on Tuesday that non-financial foreign direct investment in China totalled $8.6 billion in May, down 6.7% from a year earlier and also below April's $8.7 billion figure. FDI in the first five months of the year was still up 2.8% year-over-year, at $48.91 billion. FDI from the 28 EU nations was down 22.1% year-over-year in the January-to-May period, the Ministry of Commerce said Tuesday. Investment from the U.S. was down 9.3%.
A survey published last month by the European Union Chamber of Commerce in China found that European companies were becoming more cautious about investing in the world's second-largest economy. Only one in five said China was their top destination for new investments, down from one in three a year earlier. Among the complaints cited by foreign companies, arbitrary law enforcement and rising labor costs were high on the list. Another concern is the perception that China is set for a long-term economic slowdown.
Shares of banks and developers declined the most in Shanghai market today on profit booking. ICBC fell 1.3%. Ping An Insurance (Group) Co. declined 1.3%. Industrial Bank Co. retreated 1.5% from a two-month high. China Vanke, the nation's biggest developer by market value traded on mainland exchanges, dropped 1.7%.
Shares of industrial companies also retreated, falling for the first time in six days amid profit booking. China CAMC Engineering dropped 4.2%. Shanghai Waigaoqiao Free Trade Zone Development Co. slumped 2%.
The People's Bank of China drained 30 billion yuan via 28-day repurchase agreements on Tuesday. This week sees 65 billion yuan in funds maturing and flowing back into the system, with Tuesday's operation putting the bank on track to inject an amount far smaller than last week's 104 billion yuan net addition.
Hong Kong stocks fall on Iraq concerns
Hong Kong share market declined for second consecutive session on Tuesday, 17 June 2014, as risk aversion selloff amid jitters over the growing unrest in Iraq together with a downgrade for US growth estimates. The benchmark Hang Seng Index closed 0.42% down from prior day closure at 23203.59. Trading turnover increased to HK$49.11 billion from yesterday's HK$47.83 billion.
Belle International Holdings was up 2.5% to HK$8.21, being the top blue-chip gainer today. AIA Group dipped 1.4% to HK$38.85, being the biggest blue-chip loser.
Jewellery retailer King Fook Holdings jumped 45% to HK$1.07 after saying its controlling stakeholder was approached by potential investors.
GCL-Poly Energy Holdings Ltd., the world's biggest maker of polysilicon, tumbled 5.4% to HK$2.45 in Hong Kong after BNP Paribas SA said installation of solar energy panels in China will slow this year.
New World China (NWC)(00917) plunged 17% to HK$5.3, while its parent New World (00017) dipped 1% to HK$8.8. Both companies resumed trading after the proposal of taking NWC private was voted down by shareholders yesterday.
Macau gaming players were pressured on news that Macau police authorities will shorten the stay period for China-passport holders on transit visas to 5 days from 7 days previously starting from July. Melco (00200) slid 4% to HK$21.65. Galaxy Ent (00027) fell 1% to HK$56.75. Sands China (01928) declined 1.4% to HK$53.1.
Census and Statistics Department said on Tuesday that Hong Kong's seasonally adjusted unemployment rate stood at 3.1% in March - May 2014, same as that in February - April 2014. The underemployment rate increased from 1.4% in February - April 2014 to 1.5% in March - May 2014.
On the short-term outlook, the Secretary for Labour and Welfare, Matthew Cheung Kin-chung, said downside risks to the Hong Kong economy have increased recently. Apart from the unsteady global economic recovery and escalating geopolitical risks, the recent softening trend in the local consumption market is also a cause of concern. These domestic and external uncertainties, coupled with the entry of a new batch of fresh graduates and school leavers in the coming few months, may progressively pose some pressure on the labour market.
Sensex advances
After a lackluster first half, Indian stocks rallied in second half of the day's trading session as crude oil prices futures eased in volatile trade and as Reserve Bank of India Governor Raghuram Rajan's comments that India is currently better prepared to deal with any shocks on the external front compared to last year triggered recovery in rupee against the dollar. The S&P BSE Sensex was up 330.71 points or 1.31% to 25,521.71, its highest closing level since 12 June 2014. The CNX Nifty was up 98.15 points or 1.3% to 7,631.70.
India's largest oil exploration firm ONGC extended gains in late trade. PSU OMCs extended Monday's gains as the under-recovery on diesel declined for the fortnight commencing 16 June 2014. Maruti Suzuki India rose after a foreign brokerage maintained buy rating on the stock with a 15% increase in target price. Bank stocks rose on renewed buying. Cement stocks rose on expectations that cement demand will rise on government's thrust on the infrastructure sector.
Telecom stocks were in demand, with shares of Idea Cellular extending Monday's gains triggered by the Reserve Bank of India (RBI) allowing hike in FII investment ceiling to 49% from earlier 24% of the paid-up capital of the company. Fertiliser shares were in demand on renewed buying. Capital goods stocks rose on renewed buying. Shares of Thermax scaled record high and ABB India hit 52-week high. Shares of state-run gas transmission & distribution company GAIL (India) extended Monday's rally triggered by buzz that a foreign brokerage has raised the price target on the stock. Aviation stocks rose on reports the aviation ministry has drawn up a plan to push infrastructure development, e-governance and air connectivity during the first 100 days of the new government. Tyre stocks were in demand on renewed buying, with shares of CEAT and Balkrishna Industries scaling record high. Sugar stocks rose on fresh buying.
Elsewhere in the Asia Pacific region- Taiwan's Taiex index rose 0.41% to 9240.60. South Korea's KOSPI index was up 0.4% to 2001.55. Indonesia's Jakarta Composite Index grew 0.5% to 4909.52. Malaysia's KLSE Composite rose 0.16% to1874.60. New Zealand's NZX50 rose 0.28% to 5193.50. Singapore's Straits Times index slid 0.48% to 3274.44.
An escalation of violence in the Middle East pushed oil prices higher and contributed to declines in Asia-Pacific equities. In Iraq, Kurdish troops are defending the fourth-largest oilfield against Islamist militants. Army troops killed more than 270 rebels yesterday in Iraq, OPEC's second-biggest crude producer, as the prospect of civil war intensifies with Sunni Muslim insurgents controlling territory north of Baghdad.
The International Monetary Fund yesterday cut its economic growth forecast for the U.S. in 2014. The IMF now sees expansion of 2%, down from an April estimate of 2.8%, while it left its 2015 prediction unchanged at 3%.
Trading turnover was generally quiet, as markets waited for the conclusion of the Federal Reserve's policy meeting on Wednesday, which will give an update on the direction of monetary policy in the world's largest economy.
Among Asian bourses
Miners sink Australia market
Australian share market declined amidst continued iron ore weakness, geopolitical concerns in Iraq and Russia together with a downgrade for US growth estimates. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 0.2% to 5400.70 and 5380.70, respectively.
Sydney shares took a soft lead from offshore after equities in the United States edged higher, while London's FTSE moved modestly lower. Investors are cautious amid increasing geo-political risk in Iraq, and waiting on announcements from the US Federal Reserve and Bank of England on Wednesday night for any hints as to the future direction of global monetary policy.
Today was one of the busier days for economic news locally, with the results of a weekly consumer confidence survey, RBA Board minutes, data on car sales and a quarterly publication on agricultural commodities issued. The highlight though is the RBA's latest board meeting minutes. Comments suggest that Australia's central bank is in no rush to lift interest rates.
Shares of material and resources companies declined after the price of iron ore fell below US$90 per tonne last night for the first time since September 2012. The weaker ore price is squeezing profit margins for global producers of the metal. Resources giant BHP Billiton dropped 0.7% to A$35.36. Main rival Rio Tinto lost 1% to A$57.45. Fortescue Metals Group declined 3% to A$3.94.
Energy stocks were weaker as investors booked profit following recent surge on spike in crude oil price. The price of oil was largely flat overnight; however surged by 4% last week partly due to violence in Iraq. Origin Energy was down 0.2% to A$14.28, Santos 1.5% to A$14.50 and Oil Search 0.5% to A$9.77.
Australia's biggest oil producer Woodside Petroleum was in trading halt after announcing that Royal Dutch Shell PLC will sell 19% of it´s holding in WPL in a transaction that will yield A$6.1 billion. 50% of the shares will be sold to institutional investors, while Woodside would buy the remainder 78 million shares (9.5% of the company) from Shell at a discounted price of A$36.49. Shell will retain a 4.1% stake.
The retailers were mostly firmer, with the latest weekly ANZ/Roy Morgan survey results on consumer confidence rising 1%. Myer was up 1% to A$2.02 while surfwear retailer Billabong (BBG) rose 4% to A$0.515. David Jones added 0.5% to A$3.88 on heavy volume ahead of an investor meeting on South Africa's Woolworths' bid.
Gambling was the best performing sub-sector after casino operator Echo Entertainment upgraded its profit guidance on Monday. Echo added another 2.7% to A$3.06, while Tatts Group, Aristocrat Leisure, and Tabcorp all rose on the positive sentiment for the sector.
Nikkei bounces 0.3%
Japan market closed higher, recovering slightly from a sharp fall in the previous session, supported by a weaker yen, which stabilized after the dollar softened overnight. But, jitters over the growing unrest in Iraq capped gains. The benchmark Nikkei 225 index grew 0.29% to finish at 14975.97, while the Topix index of all first-section shares added 0.29% to 1238.20.
Investors took advantage of cheaper valuations after the Nikkei tumbled more than 1% on Monday in reaction to the fighting in Iraq, where militants are sweeping towards Baghdad after taking over several towns. Meanwhile, buoyant dollar and higher Wall Street stocks supported the Japanese market.
In foreign exchange trade, the greenback was last trading at 102.03 yen, compared with 101.83 yen late Monday in the New York. A weaker yen is positive for exporters' shares as it improves their profitability.
Shares of exporters and inflation-sensitive stocks such as brokerages and real estate companies climbed up, on the back of yen weakening against the US dollar. Daikin Industries gained 1.8% to 6351 yen and Canon Inc rose 0.2% to 3391 yen while Uniqlo clothing chain operator Fast Retailing added 0.30% to end at 33250 yen. Among financials, Daiwa Securities Group rose 0.7% to 853 yen.
Casino-related stocks rose sharply on speculative buying following afternoon news that Japan will begin legislative procedures Wednesday to eventually legalize casino gambling. Konami Corp rose 2.1% to 2300 yen, while Sega Sammy Holdings added 2.6% and Japan Cash Machine surged 8.4%.
Kobe Bussan Co. slumped 3.9% to 2,969 yen after the Japanese supermarket operator's first-half net income plunged.
Mitsubishi Heavy Industries fell 1.42% to 621 yen after the Japanese giant and Germany's Siemens on Monday unveiled the terms of their joint bid for the energy assets of French industrial jewel Alstom, also coveted by US industry giant General Electric
Shares of SoftBank Corp declined 2.5% to 7483 yen on concerns over the growth rate at its Chinese e-commerce affiliate Alibaba Group Holdings, in which it owns a 34% stake. Alibaba, which will list its shares in the U.S. this autumn, reported that its quarterly operating margin fell to 45.3% from 51.3% a year ago.
China market ends 0.92% down
Mainland China share market declined on Tuesday, 17 June 2014, as profit booking triggered across the board after the key bourses surged to highest level in two-month yesterday and as foreign direct investment in the world's second-largest economy unexpectedly declined. The benchmark Shanghai Composite closed 0.92% down from prior day to 2066.70. Market turnover decreased to 70.92 billion yuan from yesterday's 79.95 billion yuan.
The Ministry of Commerce said on Tuesday that non-financial foreign direct investment in China totalled $8.6 billion in May, down 6.7% from a year earlier and also below April's $8.7 billion figure. FDI in the first five months of the year was still up 2.8% year-over-year, at $48.91 billion. FDI from the 28 EU nations was down 22.1% year-over-year in the January-to-May period, the Ministry of Commerce said Tuesday. Investment from the U.S. was down 9.3%.
A survey published last month by the European Union Chamber of Commerce in China found that European companies were becoming more cautious about investing in the world's second-largest economy. Only one in five said China was their top destination for new investments, down from one in three a year earlier. Among the complaints cited by foreign companies, arbitrary law enforcement and rising labor costs were high on the list. Another concern is the perception that China is set for a long-term economic slowdown.
Shares of banks and developers declined the most in Shanghai market today on profit booking. ICBC fell 1.3%. Ping An Insurance (Group) Co. declined 1.3%. Industrial Bank Co. retreated 1.5% from a two-month high. China Vanke, the nation's biggest developer by market value traded on mainland exchanges, dropped 1.7%.
Shares of industrial companies also retreated, falling for the first time in six days amid profit booking. China CAMC Engineering dropped 4.2%. Shanghai Waigaoqiao Free Trade Zone Development Co. slumped 2%.
The People's Bank of China drained 30 billion yuan via 28-day repurchase agreements on Tuesday. This week sees 65 billion yuan in funds maturing and flowing back into the system, with Tuesday's operation putting the bank on track to inject an amount far smaller than last week's 104 billion yuan net addition.
Hong Kong stocks fall on Iraq concerns
Hong Kong share market declined for second consecutive session on Tuesday, 17 June 2014, as risk aversion selloff amid jitters over the growing unrest in Iraq together with a downgrade for US growth estimates. The benchmark Hang Seng Index closed 0.42% down from prior day closure at 23203.59. Trading turnover increased to HK$49.11 billion from yesterday's HK$47.83 billion.
Belle International Holdings was up 2.5% to HK$8.21, being the top blue-chip gainer today. AIA Group dipped 1.4% to HK$38.85, being the biggest blue-chip loser.
Jewellery retailer King Fook Holdings jumped 45% to HK$1.07 after saying its controlling stakeholder was approached by potential investors.
GCL-Poly Energy Holdings Ltd., the world's biggest maker of polysilicon, tumbled 5.4% to HK$2.45 in Hong Kong after BNP Paribas SA said installation of solar energy panels in China will slow this year.
New World China (NWC)(00917) plunged 17% to HK$5.3, while its parent New World (00017) dipped 1% to HK$8.8. Both companies resumed trading after the proposal of taking NWC private was voted down by shareholders yesterday.
Macau gaming players were pressured on news that Macau police authorities will shorten the stay period for China-passport holders on transit visas to 5 days from 7 days previously starting from July. Melco (00200) slid 4% to HK$21.65. Galaxy Ent (00027) fell 1% to HK$56.75. Sands China (01928) declined 1.4% to HK$53.1.
Census and Statistics Department said on Tuesday that Hong Kong's seasonally adjusted unemployment rate stood at 3.1% in March - May 2014, same as that in February - April 2014. The underemployment rate increased from 1.4% in February - April 2014 to 1.5% in March - May 2014.
On the short-term outlook, the Secretary for Labour and Welfare, Matthew Cheung Kin-chung, said downside risks to the Hong Kong economy have increased recently. Apart from the unsteady global economic recovery and escalating geopolitical risks, the recent softening trend in the local consumption market is also a cause of concern. These domestic and external uncertainties, coupled with the entry of a new batch of fresh graduates and school leavers in the coming few months, may progressively pose some pressure on the labour market.
Sensex advances
After a lackluster first half, Indian stocks rallied in second half of the day's trading session as crude oil prices futures eased in volatile trade and as Reserve Bank of India Governor Raghuram Rajan's comments that India is currently better prepared to deal with any shocks on the external front compared to last year triggered recovery in rupee against the dollar. The S&P BSE Sensex was up 330.71 points or 1.31% to 25,521.71, its highest closing level since 12 June 2014. The CNX Nifty was up 98.15 points or 1.3% to 7,631.70.
India's largest oil exploration firm ONGC extended gains in late trade. PSU OMCs extended Monday's gains as the under-recovery on diesel declined for the fortnight commencing 16 June 2014. Maruti Suzuki India rose after a foreign brokerage maintained buy rating on the stock with a 15% increase in target price. Bank stocks rose on renewed buying. Cement stocks rose on expectations that cement demand will rise on government's thrust on the infrastructure sector.
Telecom stocks were in demand, with shares of Idea Cellular extending Monday's gains triggered by the Reserve Bank of India (RBI) allowing hike in FII investment ceiling to 49% from earlier 24% of the paid-up capital of the company. Fertiliser shares were in demand on renewed buying. Capital goods stocks rose on renewed buying. Shares of Thermax scaled record high and ABB India hit 52-week high. Shares of state-run gas transmission & distribution company GAIL (India) extended Monday's rally triggered by buzz that a foreign brokerage has raised the price target on the stock. Aviation stocks rose on reports the aviation ministry has drawn up a plan to push infrastructure development, e-governance and air connectivity during the first 100 days of the new government. Tyre stocks were in demand on renewed buying, with shares of CEAT and Balkrishna Industries scaling record high. Sugar stocks rose on fresh buying.
Elsewhere in the Asia Pacific region- Taiwan's Taiex index rose 0.41% to 9240.60. South Korea's KOSPI index was up 0.4% to 2001.55. Indonesia's Jakarta Composite Index grew 0.5% to 4909.52. Malaysia's KLSE Composite rose 0.16% to1874.60. New Zealand's NZX50 rose 0.28% to 5193.50. Singapore's Straits Times index slid 0.48% to 3274.44.
