Headline equities of the Asia Pacific market closed mixed on Wednesday,
11 June 2014, as bearish investors took advantage of the prior session's
gain to selloff into the market. Meanwhile, the downward revision of
the World Bank's global economic growth forecast also dampened investor
sentiments. The MSCI Asia Pacific Index Excluding Japan Index lost 0.1%
to 494.03 after closing yesterday at its highest since May 2011.
The World Bank predicts the world economy will expand 2.8% this year, down from a January projection of 3.2%, amid a weaker outlook for the U.S., Russia and China. The forecast for the United States was reduced to 2.1% from 2.8%. The World Bank cut its forecast for economic growth in China this year to 7.6% from its projection in January of 7.7%. The bank cut its forecast for Russia's growth this year to 0.5% from a January prediction of 2.2%. The forecast for Japan was trimmed to 1.3% from 1.4%.
The World Bank maintained its forecast this year for the euro area, which is still recovering from its debt crisis, at 1.1%. The forecast for Japan was trimmed to 1.3% from 1.4%.
The World Bank has projected developing countries to grow 4.8% this year, compared with the 5.3% forecast in January. The development-aid institution also cut its outlook for Brazil's expansion to 1.5% from 2.4%. India is now seen growing at 5.5% instead of the 6.2% estimated in January.
Among Asian bourses
Australia market ends 0.3% down
Australian share market declined today, following weak offshore lead, with shares in the retailers, miners, and industrials companies leading losses. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 0.3% to 5454 and 5432.50, respectively.
The Australian stock market took a soft lead after equity markets in the United States and London closed flat, while European stocks moved modestly higher. Local shares lifted somewhat after the release of the monthly consumer confidence figures for June indicating a slight rebound from the sharp fall in sentiment witnessed in May, but, the gain was not enough to overcome complete market losses as the index remains below the 100 point level separating expansion from contraction.
The Westpac-Melbourne Institute Consumer Sentiment Index edged up 0.2% to 93.2 in June after slumping 6.8% the previous month in the wake of May's federal budget announcement. Consumer confidence is still down 8.8% compared to one year ago. A reading of 100 is the dividing line separating optimism from pessimism.
Shares of Industrial services sector was the worst-performer in the Sydney market amid fears the big miners will cancel more contracts. Mining services contractor Downer EDI was down 11.2% to A$4.70 after BHP Billiton cancelled a A$360 million coal mine contract. Leighton's erased 2% to A$19.81 and Bramble 1.1% to A$7.57.
Engineering services provider Transfield Services lost 5.7% to A$1.15. ALS, which provides laboratory services to miners, lost 3.1% to A$8.58 after trading without the rights to a 20 cents final dividend, and as Deutsche Bank downgraded it from hold to sell on valuation grounds.
Shares of retailers and consumer goods manufacturers continued downtrend for second day in row, dragged down by weaker than expected consumer confidence numbers and in the wake of a number of recent profit downgrades from retailers such as Noni B (NBL), Pacific Brands (PBG) and The Reject Shop (TRS). NBL closed down 8.4% to A$0.49 while TRS and PBG which were heavily sold off yesterday clawed back some ground. Myer (MYR) finished down 1.5% to A$2.00 and David Jones (DJS) was up 1.3% to A$3.90.
Travel agent Flight Centre added 1.2% to A$46.43 after telling shareholders it now expects to scrape in at the bottom of its full-year annual profit guidance range. The travel agent today announced it's now expecting FY14 pre-tax profit to come in between A$370-380 million, at the lower end of its guidance. Travel sales in Australia have been slumping since April while the company's US operations have improved, driven by a pick-up in corporate travel bookings.
Japan stocks rebound on bargain buying
Japan share market finished the session modest higher, recovering large parts of yesterday's losses, on the back of bargain hunting. Meanwhile, yen depreciation against the dollar stokes equity buying sentiments. The benchmark Nikkei 225 index rose 0.5% to finish at 15069.48, while the Topix index of all first-section shares climbed 0.84% to 1239.07.
Takata Corp., whose airbags led to the recall of more than 3 million vehicles last year, sank 4.1% to 2,151 yen after telling customers that defective parts may need to be fixed again.
Shares of Seven & i Holdings closed up 0.9% to 4155 yen following a Nikkei report saying that the retailer's operating profit for the March-May period likely rose 5% on-year to over Y77 billion--a record amount for the quarter, flying in the face of pessimism over consumer spending following Japan's April 1 sales tax hike.
Daiichi Sankyo rose 1.7% to 1,765 yen after Mizuho Securities rose the company's rating to buy from neutral, saying new products will drive earnings growth.
The Finance Ministry said on Wednesday that the sentiment index for major Japanese firms fell to -14.6 points in the April-June quarter from a record high of +12.7 points in January-March after the April 1 sales tax hike triggered a pullback in consumption. But the BSI is forecast to rebound to +13.4 points in the July-September quarter, indicating many firms expect the drag from the consumption tax hike to be temporary. The index is projected to fall to +10.8 points in October-December from the previous three months. The MOF survey also showed that capital investment by all firms (including software) is expected to rise 4.5% on year in fiscal 2014, revised up from a 5.1% fall projected in the previous survey.
The Bank of Japan said on Wednesday that Japan's corporate goods price index rose 4.4% in May from a year earlier as the sales tax hike on April 1 pushed up the domestic producer price level. The pace of increase was faster than expected and accelerated from an upwardly revised 4.2% rise in April after some price hikes took effect in May. On the month, the CGPI rose 0.3% in May after raising an upwardly revised 2.9% rise in April.
China stocks recover losses
Mainland China share market closed marginal higher after recouping losses late afternoon, registering second consecutive day of rise. The positive finish of the market largely came on speculation about government spending plans to combat water pollution and the central bank measures to boost lending to smaller companies. But MSCI decision to leaves Chinese stocks out of indices and World Bank's downward revision of China economic growth forecast capped further gains. The benchmark Shanghai Composite closed 2.42 points higher at 2054.95 after hitting an intraday low of 2045.41. Market turnover decreased to 63.2 billion yuan from Tuesday's 65.41 billion yuan.
MSCI has chosen not to press ahead with a controversial plan to add mainland Chinese equities to its global benchmark indices. As part of its annual review, MSCI, an index provider, said it would still consider including China's so-called A shares in its 2015 review.
Shares of utilities climbed on speculation the government is planning to announce measures to combat water pollution. China Business News reported a 2 trillion yuan ($321 billion) plan to curb water pollution has been submitted to the nation's cabinet. Chongqing Water Group Co., which treats urban wastewater, jumped the most in three months and Beijing Originwater Technology Co. surged 5.1%.
Shares financial companies declined on profit booking. Citic Securities declined the most in two weeks while Ping An fell 0.8%, the first loss in three days.
China will quicken interest rate liberalisation and preparations for setting up a deposit insurance system in 2014, the central bank said on Wednesday. The People's Bank of China (PBOC) reiterated elements from its 2013 annual report stating it would keep its monetary stance prudent, while still making pre-emptive moves to fine-tune policy.
Hong Kong stocks fall 0.25%
Hong Kong share market finished lower, registering first fall in three consecutive sessions, as profit taking triggered after downward revision of World Bank's global economic expansion forecast and equity index provider MSCI said it will not add China's A shares to its benchmark emerging markets. The benchmark Hang Seng Index closed 0.25% down from prior day closure at 23257.29. Turnover decreased to HK$52.50 billion from yesterday's HK$60.17 billion.
Shares of gaming operators rebounded after Credit Suisse said in a research report that it's time to accumulate Macau gaming players as fundamentals remain strong and the recent the correction is excessive. The casino stocks declined yesterday on a report Macau's government plans to further restrict the use of China UnionPay Co.'s debit cards at casinos. Galaxy Entertainment Group rose 3% to HK$57.65 after its chairman Lui Che Woo said the curbs will have little impact on the company. Sands China gained 3.6% to HK$53.70 after Credit Suisse Group AG said the sell-off was excessive. MGM China (02282) put on 3.4% to HK$24.7. Melco Dev (00200) rose 3.3% to HK$23.25.
Shares of wastewater treatment related companies rose after China was reportedly to launch 2 trillion yuan investment on water-pollution prevention action plan. CTEG (01363) jumped 5.7% to HK$5.53. Tianjin Capital (01065) soared 7.2% to HK$4.75.
Shares of Beijing Enterprises slipped 4% to HK$72.45 after saying its controlling shareholder plans to raise HK$4.3 billion ($555 million) selling exchangeable bonds.
China Mobile (00941) fell 2% to HK$75.15 after it announced plan to buy 18% stake in Thailand's telecom operator True.
Sensex, Nifty slip into the red on profit booking
Key benchmark indices finished lower after surging to record high in mid-morning trade as profit-taking spurred on recent outperformers. Meanwhile, weakness in European stocks hit sentiment on the domestic bourses adversely.
The Sensex provisionally ended 0.43% lower at 25,473.89. Earlier it gained as much as 0.59% to a record high of 25,735.87, surpassing the previous high of 25,711.11 hit on Tuesday. The Nifty provisionally closed 0.39% lower at 7,626.85. The Nifty rose as much as 0.57% to an all-time high of 7,700.05, surpassing its previous peak of 7,683.20.
Metal and mining stocks declined. Hindustan Zinc (down 3.45% to Rs 170.50), NMDC (down 4.06% to Rs 182.15), Hindalco Industries (down 4.48% to Rs 162.10), Sesa Sterlite (down 3.09% to Rs 291.20), Steel Authority of India (Sail) (down 4.36% to Rs 103.10), Jindal Steel & Power (down 3.45% to Rs 325), Tata Steel (down 2.24% to Rs 546.30), National Aluminium Company (down 0.71% to Rs 55.60), and Hindustan Copper (down 2.7% to Rs 117), edged lower.
JSW Steel dropped 1.94% to Rs 1,283.35. The company clarified during market hours with respect to the news articles in the media titled JSW Steel to buy Welspun Maxsteel for Rs 1100 crore, that the company doesn't offer any comments on market rumours and speculation. However, as a long term strategy, the company will like to expand both organically by means of brownfield and greenfield expansions and inorganically by acquiring some existing assets. In that perspective, the company keeps scanning suitable opportunities, which have a strategic fit, JSW Steel said.
Realty stocks reversed intraday gains. Housing Development & Infrastructure (HDIL) (down 8.43% to Rs 100.45), DLF (down 5.28% to Rs 220.85), and Anant Raj (down 1.61% to Rs 79.50) declined. Sobha Developers rose 0.89% to Rs 530.
Unitech dropped 7.11% to Rs 33.95. The stock hit high of Rs 37.90 and low of Rs 33.25. With reference to an announcement made by Unitech Corporate Parks PLC to sell its entire interest in the portfolio of 6 IT SEZ/Parks in India, Unitech announced during market hours today, 11 June 2014, that the interest of two of the affiliates of Unitech in 4 of these 6 IT SEZ/Parks stands transferred to an independent third party. These 4 SEZs are the most mature in terms of their development status, Unitech said. As part of this transaction, certain affiliates of Unitech will continue to manage and develop these assets to ensure that there is no impact on tenants and other stakeholders, Unitech said.
Elsewhere in the Asia Pacific region- Taiwan's Taiex index rose 0.08%. South Korea's KOSPI index was up 0.14%. Indonesia's Jakarta Composite Index added 0.52%. Malaysia's KLSE Composite jumped 0.09%. Singapore's Straits Times index fell 0.11%. New Zealand's NZX50 closed 0.25 point down at 5179.15.
The World Bank predicts the world economy will expand 2.8% this year, down from a January projection of 3.2%, amid a weaker outlook for the U.S., Russia and China. The forecast for the United States was reduced to 2.1% from 2.8%. The World Bank cut its forecast for economic growth in China this year to 7.6% from its projection in January of 7.7%. The bank cut its forecast for Russia's growth this year to 0.5% from a January prediction of 2.2%. The forecast for Japan was trimmed to 1.3% from 1.4%.
The World Bank maintained its forecast this year for the euro area, which is still recovering from its debt crisis, at 1.1%. The forecast for Japan was trimmed to 1.3% from 1.4%.
The World Bank has projected developing countries to grow 4.8% this year, compared with the 5.3% forecast in January. The development-aid institution also cut its outlook for Brazil's expansion to 1.5% from 2.4%. India is now seen growing at 5.5% instead of the 6.2% estimated in January.
Among Asian bourses
Australia market ends 0.3% down
Australian share market declined today, following weak offshore lead, with shares in the retailers, miners, and industrials companies leading losses. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 0.3% to 5454 and 5432.50, respectively.
The Australian stock market took a soft lead after equity markets in the United States and London closed flat, while European stocks moved modestly higher. Local shares lifted somewhat after the release of the monthly consumer confidence figures for June indicating a slight rebound from the sharp fall in sentiment witnessed in May, but, the gain was not enough to overcome complete market losses as the index remains below the 100 point level separating expansion from contraction.
The Westpac-Melbourne Institute Consumer Sentiment Index edged up 0.2% to 93.2 in June after slumping 6.8% the previous month in the wake of May's federal budget announcement. Consumer confidence is still down 8.8% compared to one year ago. A reading of 100 is the dividing line separating optimism from pessimism.
Shares of Industrial services sector was the worst-performer in the Sydney market amid fears the big miners will cancel more contracts. Mining services contractor Downer EDI was down 11.2% to A$4.70 after BHP Billiton cancelled a A$360 million coal mine contract. Leighton's erased 2% to A$19.81 and Bramble 1.1% to A$7.57.
Engineering services provider Transfield Services lost 5.7% to A$1.15. ALS, which provides laboratory services to miners, lost 3.1% to A$8.58 after trading without the rights to a 20 cents final dividend, and as Deutsche Bank downgraded it from hold to sell on valuation grounds.
Shares of retailers and consumer goods manufacturers continued downtrend for second day in row, dragged down by weaker than expected consumer confidence numbers and in the wake of a number of recent profit downgrades from retailers such as Noni B (NBL), Pacific Brands (PBG) and The Reject Shop (TRS). NBL closed down 8.4% to A$0.49 while TRS and PBG which were heavily sold off yesterday clawed back some ground. Myer (MYR) finished down 1.5% to A$2.00 and David Jones (DJS) was up 1.3% to A$3.90.
Travel agent Flight Centre added 1.2% to A$46.43 after telling shareholders it now expects to scrape in at the bottom of its full-year annual profit guidance range. The travel agent today announced it's now expecting FY14 pre-tax profit to come in between A$370-380 million, at the lower end of its guidance. Travel sales in Australia have been slumping since April while the company's US operations have improved, driven by a pick-up in corporate travel bookings.
Japan stocks rebound on bargain buying
Japan share market finished the session modest higher, recovering large parts of yesterday's losses, on the back of bargain hunting. Meanwhile, yen depreciation against the dollar stokes equity buying sentiments. The benchmark Nikkei 225 index rose 0.5% to finish at 15069.48, while the Topix index of all first-section shares climbed 0.84% to 1239.07.
Takata Corp., whose airbags led to the recall of more than 3 million vehicles last year, sank 4.1% to 2,151 yen after telling customers that defective parts may need to be fixed again.
Shares of Seven & i Holdings closed up 0.9% to 4155 yen following a Nikkei report saying that the retailer's operating profit for the March-May period likely rose 5% on-year to over Y77 billion--a record amount for the quarter, flying in the face of pessimism over consumer spending following Japan's April 1 sales tax hike.
Daiichi Sankyo rose 1.7% to 1,765 yen after Mizuho Securities rose the company's rating to buy from neutral, saying new products will drive earnings growth.
The Finance Ministry said on Wednesday that the sentiment index for major Japanese firms fell to -14.6 points in the April-June quarter from a record high of +12.7 points in January-March after the April 1 sales tax hike triggered a pullback in consumption. But the BSI is forecast to rebound to +13.4 points in the July-September quarter, indicating many firms expect the drag from the consumption tax hike to be temporary. The index is projected to fall to +10.8 points in October-December from the previous three months. The MOF survey also showed that capital investment by all firms (including software) is expected to rise 4.5% on year in fiscal 2014, revised up from a 5.1% fall projected in the previous survey.
The Bank of Japan said on Wednesday that Japan's corporate goods price index rose 4.4% in May from a year earlier as the sales tax hike on April 1 pushed up the domestic producer price level. The pace of increase was faster than expected and accelerated from an upwardly revised 4.2% rise in April after some price hikes took effect in May. On the month, the CGPI rose 0.3% in May after raising an upwardly revised 2.9% rise in April.
China stocks recover losses
Mainland China share market closed marginal higher after recouping losses late afternoon, registering second consecutive day of rise. The positive finish of the market largely came on speculation about government spending plans to combat water pollution and the central bank measures to boost lending to smaller companies. But MSCI decision to leaves Chinese stocks out of indices and World Bank's downward revision of China economic growth forecast capped further gains. The benchmark Shanghai Composite closed 2.42 points higher at 2054.95 after hitting an intraday low of 2045.41. Market turnover decreased to 63.2 billion yuan from Tuesday's 65.41 billion yuan.
MSCI has chosen not to press ahead with a controversial plan to add mainland Chinese equities to its global benchmark indices. As part of its annual review, MSCI, an index provider, said it would still consider including China's so-called A shares in its 2015 review.
Shares of utilities climbed on speculation the government is planning to announce measures to combat water pollution. China Business News reported a 2 trillion yuan ($321 billion) plan to curb water pollution has been submitted to the nation's cabinet. Chongqing Water Group Co., which treats urban wastewater, jumped the most in three months and Beijing Originwater Technology Co. surged 5.1%.
Shares financial companies declined on profit booking. Citic Securities declined the most in two weeks while Ping An fell 0.8%, the first loss in three days.
China will quicken interest rate liberalisation and preparations for setting up a deposit insurance system in 2014, the central bank said on Wednesday. The People's Bank of China (PBOC) reiterated elements from its 2013 annual report stating it would keep its monetary stance prudent, while still making pre-emptive moves to fine-tune policy.
Hong Kong stocks fall 0.25%
Hong Kong share market finished lower, registering first fall in three consecutive sessions, as profit taking triggered after downward revision of World Bank's global economic expansion forecast and equity index provider MSCI said it will not add China's A shares to its benchmark emerging markets. The benchmark Hang Seng Index closed 0.25% down from prior day closure at 23257.29. Turnover decreased to HK$52.50 billion from yesterday's HK$60.17 billion.
Shares of gaming operators rebounded after Credit Suisse said in a research report that it's time to accumulate Macau gaming players as fundamentals remain strong and the recent the correction is excessive. The casino stocks declined yesterday on a report Macau's government plans to further restrict the use of China UnionPay Co.'s debit cards at casinos. Galaxy Entertainment Group rose 3% to HK$57.65 after its chairman Lui Che Woo said the curbs will have little impact on the company. Sands China gained 3.6% to HK$53.70 after Credit Suisse Group AG said the sell-off was excessive. MGM China (02282) put on 3.4% to HK$24.7. Melco Dev (00200) rose 3.3% to HK$23.25.
Shares of wastewater treatment related companies rose after China was reportedly to launch 2 trillion yuan investment on water-pollution prevention action plan. CTEG (01363) jumped 5.7% to HK$5.53. Tianjin Capital (01065) soared 7.2% to HK$4.75.
Shares of Beijing Enterprises slipped 4% to HK$72.45 after saying its controlling shareholder plans to raise HK$4.3 billion ($555 million) selling exchangeable bonds.
China Mobile (00941) fell 2% to HK$75.15 after it announced plan to buy 18% stake in Thailand's telecom operator True.
Sensex, Nifty slip into the red on profit booking
Key benchmark indices finished lower after surging to record high in mid-morning trade as profit-taking spurred on recent outperformers. Meanwhile, weakness in European stocks hit sentiment on the domestic bourses adversely.
The Sensex provisionally ended 0.43% lower at 25,473.89. Earlier it gained as much as 0.59% to a record high of 25,735.87, surpassing the previous high of 25,711.11 hit on Tuesday. The Nifty provisionally closed 0.39% lower at 7,626.85. The Nifty rose as much as 0.57% to an all-time high of 7,700.05, surpassing its previous peak of 7,683.20.
Metal and mining stocks declined. Hindustan Zinc (down 3.45% to Rs 170.50), NMDC (down 4.06% to Rs 182.15), Hindalco Industries (down 4.48% to Rs 162.10), Sesa Sterlite (down 3.09% to Rs 291.20), Steel Authority of India (Sail) (down 4.36% to Rs 103.10), Jindal Steel & Power (down 3.45% to Rs 325), Tata Steel (down 2.24% to Rs 546.30), National Aluminium Company (down 0.71% to Rs 55.60), and Hindustan Copper (down 2.7% to Rs 117), edged lower.
JSW Steel dropped 1.94% to Rs 1,283.35. The company clarified during market hours with respect to the news articles in the media titled JSW Steel to buy Welspun Maxsteel for Rs 1100 crore, that the company doesn't offer any comments on market rumours and speculation. However, as a long term strategy, the company will like to expand both organically by means of brownfield and greenfield expansions and inorganically by acquiring some existing assets. In that perspective, the company keeps scanning suitable opportunities, which have a strategic fit, JSW Steel said.
Realty stocks reversed intraday gains. Housing Development & Infrastructure (HDIL) (down 8.43% to Rs 100.45), DLF (down 5.28% to Rs 220.85), and Anant Raj (down 1.61% to Rs 79.50) declined. Sobha Developers rose 0.89% to Rs 530.
Unitech dropped 7.11% to Rs 33.95. The stock hit high of Rs 37.90 and low of Rs 33.25. With reference to an announcement made by Unitech Corporate Parks PLC to sell its entire interest in the portfolio of 6 IT SEZ/Parks in India, Unitech announced during market hours today, 11 June 2014, that the interest of two of the affiliates of Unitech in 4 of these 6 IT SEZ/Parks stands transferred to an independent third party. These 4 SEZs are the most mature in terms of their development status, Unitech said. As part of this transaction, certain affiliates of Unitech will continue to manage and develop these assets to ensure that there is no impact on tenants and other stakeholders, Unitech said.
Elsewhere in the Asia Pacific region- Taiwan's Taiex index rose 0.08%. South Korea's KOSPI index was up 0.14%. Indonesia's Jakarta Composite Index added 0.52%. Malaysia's KLSE Composite jumped 0.09%. Singapore's Straits Times index fell 0.11%. New Zealand's NZX50 closed 0.25 point down at 5179.15.
