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.
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.
