Headline shares of the Asia Pacific market closed mixed on Thursday, 31
July 2014, as investors booked some profit following mixed performances
from global markets overnight, capital outflows woes after US Fed once
again tapered its stimulus and growing concerns that global equities are
vulnerable to a correction. The MSCI Asia Pacific Index slipped 0.4% to
148.83, reversing an earlier gain of 0.2%. The measure climbed 2% in
July.
Regional investors took out some gain amidst global concerns about an
Argentinian bond default and growing fears that global equities are
vulnerable to a correction. Low volatility, stretched price-to-earnings
ratios and record highs on Wall Street have all been cited as cause for
caution.
But losses on the regional blue chips were limited on the back of solid
U.S. gross domestic product data and after the Fed statement that rates
would remain low for a considerable time. U.S. gross domestic product, a
broad measure of the nation's output of goods and services, advanced at
a seasonally adjusted annual rate of 4.0% in the second quarter, the
Commerce Department said Wednesday, a significant rebound from a wintry
2.1% contraction during the first three months of the year.
The U.S. policy makers tapered monthly bond buying to $25 billion in
their sixth consecutive $10 billion cut, staying on pace to end the
purchase program in October. Policymakers acknowledged rebound in the
economy in the second quarter of the year, noting 'somewhat diminished'
downside risks to inflation and improvements in labor market conditions.
Yet, they cautioned that a number of labor market indicators signaled
that slacks remained 'significant'. The statement suggested that the Fed
is not in any rush to hike interest rates. The Fed said the labor
market still has plenty of room for improvement, even after a surprising
drop in unemployment.
Among Asian bourses
Nikkei declines from six-month high
Headline shares of the Japanese market declined, dragging the benchmark
Nikkei 225 index 25.46 points lower from a six-month high to close at
15620.77, amid profit taking in the last 30 minutes of trading. The
Topix index fell 0.2% to 1,289.42, paring this month's gain to 2.1%.
Nintendo slumped 6.5% to 11,525 yen after the video-game console maker
posted a 9.9 billion yen ($96 million) quarterly loss, due to sluggish
sales of the Wii U console. Nintendo shares have lost 18% year to date.
Denso, an auto-parts manufacturer, slumped 1.8% to 4,788 yen after
first-quarter net income missed estimates. The company's quarterly net
income fell 20% to 68.8 billion yen in the April-June quarter.
Kansai Electric Power Co., a utility serving the Osaka region,
sank 2.6% to 950 yen after cutting its first-half revenue forecast by
1.2%. The power company reported a 29 billion loss in the first quarter,
its third-straight quarter of losses.
Sumitomo Mitsui Financial Group Inc. added 1.7% to 4,260 yen
after profit at Japan's second-biggest bank fell less than estimated.
The company generated 230 billion yen in net profit during the first
quarter.
Casio Computer soared 7.8% to 1747 yen after the company said it doubled
its net profits in the April-June quarter to 4.6 billion yen from a
year earlier.
Australia stocks hit fresh six-year high
Australian stock market advanced for third consecutive day, closing at
fresh six -year highs. Investor appetite for risk assets continued
despite mixed performances from global markets overnight. The benchmark
S&P/ASX 200 Index rose 10 points, or 0.18% to 5632.90, the highest
level since June 2008. Australia's benchmark S&P/ASX 200 Index
climbed 4.4% and the broader All Ordinaries Index added 4.5% in July.
The financial sector was up, with big 4 lenders being the biggest
gainer. Commonwealth Bank of Australia added 0.8% to A$83.75, Westpac
Banking Corporation 0.7% to A$34.61, ANZ Banking Group 0.3% to A$33.97
and National Australia Bank 0.4% to A$35.32.
Shares of material & resources companies declined, with Resources
giant BHP Billiton falling 0.82% to A$38.68. Fortescue Metals Group
dropped 0.8% to A$4.92. Rio Tinto added 0.5% to $66.38 after announcing
the offloading of its underperforming Mozambique coal assets for a
discounted $50 million. Lynas (LYC) fell by 17% after it disappointed
investors with continued cashflow problems. LYC was down 42% this
calendar year.
Infigen Energy (IFN) finished flat after delivering a 1% rise in
production but a 3% slide in revenue over the past three months.
China stocks surges to near 8-month peaks
Headline shares of the Mainland China market advanced, buoying up the
benchmark indices to near 8 month peaks on Thursday, 31 July 2014, amid
optimism government stimulus will boost economic growth. The benchmark
Shanghai Composite gained 20.32 points to close at 2201.56, the highest
level since 12 December 2013, when it was closed at 2202.80. Turnover
declined to 132.43 billion yuan from yesterday's 149.57 billion yuan.
The Shanghai index surged 7.5% in July.
Property developers stocks advanced, boosted by signs that local
governments such as Hangzhou to Wenzhou are removing home purchase
restrictions as well as prospects for reform of the household
registration system, known as hukou. Poly Real Estate climbed 2%, while
China Vanke Co., the biggest developer, added 2.8%.
Material stocks jumped ahead on PMI manufacturing data. Market pundits
expected that the official Purchasing Managers' Index would climb to
51.4 in July, the highest since November. Aluminum Corp. of China rose
1.1%,
Sinoma Energy, Suzhou TA&A Ultra Clean Technology Co. and Guangdong
Taicheng Pharmaceutical Co. all jumped by the maximum limit of 44% in
their first day of trading in Shanghai and Shenzhen. Five more companies
will start trading tomorrow.
Hang Seng climbs to 45-month highs
Hong Kong share market advanced for eighth straight session, closing at
highest level in 45-months, as sentiment remained positive after the Fed
said rates would remain low for a considerable time, and the HKMA
continued injecting liquidity into the market. The benchmark Hang Seng
Index climbed up 24.64 points, or 0.1%, to 24756.85, the highest close
since 8 November 2010, when it finished at 24964.37. Turnover decreased
to HK$84 billion from yesterday's HK$100.13 billion. The index was 6.8%
up this month.
Shares of Mainland property developers extended yesterday's rally after
many mainland cities have relaxed control on the housing market. China
Resources Land rose 3.6% to HK$18.20 after Barclays raised its rating on
the stock to overweight from equal-weight.
China Overseas Land &
Investment, the largest mainland developer listed in Hong Kong, gained
4.6% to HK$23.80. Shimao Property (00813) and China Vanke (02202) jumped
4% to HK$18 and HK$17.16.
HK-based property developers were mixed. Hang Lung Properties (00101)
slipped 1.6% to HK$24.05. Hang Lung Group (00010) retreated 2% to
HK$41.7. But Cheung Kong (00001) edged up 0.2% to HK$150.7. New World
Dev (00017) put on 1.3% to HK$9.83. SHKP (00016) ascended 1.7% to
HK$117.9.
Oil counters were down, with PetroChina retreating 2.5% to HK$10.18. The
energy producer was cut to neutral from buy at Societe Generale SA.
Kunlun Energy Co. lost 1.6% to HK$13.24.
Sensex drops below 25900; Nifty drops 70 points
Indian stock market declined as caution prevailed on the expiry of July
derivative contracts and capital outflows after US Fed once again
tapered its stimulus. The BSE Sensex settled at 25,894.97, down 192.45
points, or 0.74%. The 50-share NSE index Nifty settled the session down
70.10 points, or 0.90%, at 7,721.30, its biggest fall since July 11.
Maruti Suzuki India shed 0.86% to Rs 2,530 after announcing Q1 results.
he company's net profit rose 20.7% to Rs 762.30 crore on 10.8% rise in
net sales (net of excise) to Rs 11073.50 crore in Q1 June 2014 over Q1
June 2013.
HCL Technologies dropped 2.53% to Rs 1,557 after announcing its Q4
results. The company's consolidated net profit as per US GAAP rose 12.9%
to Rs 1834 crore on 0.9% growth rise in revenue to Rs 8424 crore in Q4
June 2014 over Q3 March 2014.
ICICI Bank fell 1.4% to Rs 1,468.70 after the bank at the time of
announcing Q1 results said its net non-performing assets rose in Q1 June
2014. The bank's net profit rose 16.75% to Rs 2655.30 crore on 13.26%
rise in total income to Rs 14,616.71 crore in Q1 June 2014 over Q1 June
2013. The net non-performing assets ratio was 0.87% as on 30 June 2014,
higher than 0.82% as on 31 March 2014 and 0.69% as on 30 June 2013.
Elsewhere in the Asia Pacific region-- Malaysia's KLSE Composite
was down 0.37% to 1871.36. South Korea's KOSPI index fell 0.31% to
2076.12. Taiwan's Taiex index dropped 1.39% to 9315.85. Bucking the
trend, New Zealand's NZX50 rose 0.18% to 5167.99 and Singapore's Straits
Times index rose 0.61% to 3374.06. Indonesia market closed for
holiday.
