Headline shares of the Asia Pacific market advanced on Friday, 25 July
2014, as investors risk sentiment buoyed by raft of
better-than-estimated earnings in the U.S. and signs of global
manufacturing growth. Meanwhile, positive sentiment fueled further by
favorable U.S. jobs data indicating that the world's largest economy is
continuing to recover. The MSCI Asia Pacific Index added 0.2%.
Global equities advanced today as data showed euro-area manufacturing and services grew in July while Chinese factory activity rose to an 18-month high.
A preliminary reading of the manufacturing PMI for China from HSBC Holdings Plc and Markit Economics increased to 52 in July, from 50.7 the previous month. It was the highest reading since January 2013, and above the 50-point level that separates growth in activity from contraction. The latest data indicated that the economy is picking up as government stimulus measures kick in.
Euro-area manufacturing and services activity strengthened in July in a sign that a recovery in the 18-nation region is gathering pace. A combined purchasing managers index for both industries jumped to 54 this month from 52.8 in June, matching a three-year high reached in April, Markit Economics said on Thursday. Numbers above 50 indicate expansion.
Economic reports in the U.S. were mixed. A Markit Economics factory gauge for the U.S. unexpectedly declined to 56.3 in July from 57.3 the previous month. Readings above 50 indicate expansion. Separate data showed fewer new U.S. homes were sold in June than forecast. Another release showed the number of Americans filing applications for unemployment benefits unexpectedly dropped last week to 284,000, the lowest level in more than eight years.
Among Asian bourses
Nikkei surges to 6-month high
Japan share market closed higher for the first time in three days in row, thanks to yen depreciation against major currency rival. Meanwhile, raft of better-than-estimated earnings in the U.S. and signs of global manufacturing growth underpinned risk sentiment. The benchmark Nikkei 225 index added 1.13%, or 173.45 points, to 15,457.87, its best finish since late January, while the Topix index of all first-section issues rose 0.90%, or 11.49 points, to 1,281.35. The measure posted a 1.4% advance this week.
The yen depreciation against the greenback also bolstered buying activities in the Tokyo bourse. A weaker yen is positive for Japanese exporters and yen sensitive as it makes them more competitive abroad and increase profits when repatriated. The greenback fetched 101.91 yen, against 101.81 yen in New York, where it had jumped from 101.47 yen.
Fanuc advanced 5.3% to 18,390 yen after first-quarter profit doubled. The industrial-robot maker said first-quarter net income jumped 99% to 45.2 billion yen ($444 million).
Chugai Pharmaceutical surged 9.8% to 3,350 yen, after first-half net income climbed. The company posted net income of 28.9 billion yen for the six months ended June 30, up from 25.3 billion yen in the same period last year.
Itochu added 2.5% to 1,348 yen after announcing a share buyback. The trading company said it will spend as much as 110 billion yen to buy back shares. Japan's third-largest trading company also agreed to a business tie-up with Thai agriculture group Charoen Pokphand to expand food supply in the world's most populous region.
Advantest tumbled 6.7% to 1,151 yen after the company reported 1.3 billion yen in net income for the quarter ended June 30, missing market estimates.
Ministry of Internal Affairs and Communications said on Friday that Japan's core consumer prices, stripping out volatile fresh food prices, rose 3.3% year-on-year in June, slower than the 3.4% rise in May. Meanwhile, central Tokyo core CPI rose 2.8% in July.
Australia market snaps seven days rally
Australian stock market finished lower for the first time in eight consecutive sessions, as investors withdrew some profit off the table after headline indices surged to highest level since June 2008 on Thursday. The benchmark S&P/ASX 200 Index declined 4.30 points, or 0.08% to 5583.50, while the broader All Ordinaries Index shed 2.60 points, or 0.05%, to 5574.20. The S&P/ASX 200 Index added 0.9% over the week.
Most of the ASX sectors declined, with shares in bullion, consumer discretionary, consumer staple, telecom, healthcare, realty and mining companies being the biggest losers. Shares of property trusts and financials jumped, capping the market losses.
The volume turnover were light as many larger investors waited out of the market ahead of the upcoming profit reporting season here in Australia and key economic data out in the state and china next week.
Insurance Australia Group jumped 1.9% to A$6.29, on the top of yesterday's 2.2% gain after upgrading its full-year profit margin expectations to their highest level since listing, citing benign weather.
New Crest Mining declined 0.7% to A$10.70, extending yesterday's 6.2% slump after the gold miner had beaten its own gold and copper production targets for the year. Newcrest told the market yesterday it would post impairments charges of A$1.5-2.5 billion for FY14
Kingsgate Mining (KCN) shares closed 2.3% higher to A$0.905 after the firm reported solid fourth quarter numbers. Gold production lifted by 17% to 55,450 ounces taking KCNs FY production numbers hit the top end guidance.
GUD Holdings (GUD) shares declined 8.1% to A$6.60 after announcing a fall in full-year profit. GUD told the market its profit (Full year NPAT of A$17.7 Million) was hit by profit A$13.3 Million in restructuring and impairment costs but GUD did say they are expect the new restructure will turn the business around and improve profitability in the year ahead.
New Zealand shares climb
New Zealand share market rose on Friday, 25 July 2014, led by Xero after investors gained confidence about the cloud-based accounting software firm's US expansion plans following upbeat comments at the company's annual meeting this week. The NZX 50 Index rose 19.556 points, or 0.4%, to 5,194.268. Within the index 21 stocks rose, 18 fell and 11 were unchanged. Turnover was NZ$121 million.
Xero advanced 5.7% to NZ$25.90. The stock has gained 9.8% since its annual general meeting in Wellington on Wednesday when chief executive Rod Drury was upbeat about the company's prospects in the US, where it faces a battle with the incumbent accounting software provider Intuit. Drury belaboured not only a belief that Xero's cloud-based product suite is outgunning Intuit's attempts to move into the cloud, but also that the company will benefit from establishing strong positions in the Australian and UK markets before embarking on the US.
Telecom Corp, New Zealand's largest telecommunications provider, rose 0.7% to NZ$2.954, its highest level since May 2008. The stock has gained 9.6% so far this month as investors favour yield stocks over growth stocks in anticipation the Reserve Bank will keep interest rates on hold for a period after hiking the benchmark yesterday for its fourth consecutive meeting this year.
China stocks rise to 3-month high on manufacturing data
Mainland China share market advanced for fourth consecutive session, as risk sentiment buoyed by an upbeat data on the manufacturing sector which expanded at the fastest pace in 18 months. Optimism that the government would roll out more stimulus to bolster economic growth also gave a boost to the market. The drop in money-market rates also underpinned buying sentiment. The benchmark Shanghai Composite advanced 21.55 points, or 1.02%, to 2126.61, the highest closing level since April. Trading turnover decreased to 111.41 billion yuan from yesterday's 128.68 billion yuan. The benchmark measure added 3.3% this week.
Nomura Securities said in a note yesterday that “the government is expected to loosen the policy further in the third quarter to offset the ongoing property market correction, manage credit risk, and lower financing costs for firms, especially for small and micro-sized enterprises” in order to meet its 2014 growth target of 7.5%.
During an executive meeting of the State Council on Wednesday, Premier Li Keqiang vowed to offer more financing support to the real economy.
The People's Bank of China yesterday refrained from drawing liquidity from the money market for a second time this week. That equals a net cash injection of 18 billion yuan (US$2.9 billion). The move helps to ease concern over liquidity when nine initial public offerings are taking subscriptions.
Materials and energy stocks advanced as an improvement in China's manufacturing reported the day before continued to bolster risk appetite for commodity-linked companies. Jiangxi Copper, China's biggest producer of the metal, climbed 2.4%. Tongling Nonferrous Metals gained 4.8%. Zhuzhou Smelter Group Co. (600961) jumped 4.3%. Yunnan Chihong Zinc & Germanium Co. surged 6%.
Huadian Energy soared 9.7% after the China Securities Journal said that the company parent may announce its asset consolidation and coal business reform plan in the second half of this year.
Hang Seng rises to a three-year high
Hong Kong share market advanced to highest level in three-year, as a raft of better-than-estimated earnings in the U.S. and signs of global manufacturing growth buoyed sentiment. The benchmark Hang Seng Index climbed up 74.51 points, or 0.31%, to 24216.01, the highest close since April, 2011. Turnover softened to HK$76.73 billion from yesterday's HK$86.03 billion. The equity benchmark gained 3.3% this week.
Among the blue chips, 24 rose and 24 fell, with two stocks remaining closed steady. HSBC (00005) gained 1.2% to HK$81.7. China Mobile (00941) softened 1.3% to HK$84.05.
Power Assets Holding shares dropped 1.5% to HK$69.55 after reporting their earnings. The utility company said the Group's unaudited profits were HK$3,616 million after excluding this one-time gain, dropped by 24.2%, mainly due to a reduction of interest in HK Electric from 100% to 49.9%. The turnover was HK$1,432 million, a decrease of 73.9% from a year earlier.
AIA Group (01299) shares closed 0.7% up at HK$41.40 after posting a 23% increase in new business value over the first six months of the year. AIA Group said its value of new business reached a record high of US$792 million, an increase of 22.8% from a year earlier. VONB margin increased to 46.2% from 41.6% for the same period in 2013. Annualised new premium rose 10.7% year-on-year to US$1,690 million. Total weighted premium income was US$9,004 million, up 6% year-on-year. The proposed interim dividend is HK16 cents (2013: HK13.93 cents) per share.
NCI (01336) plunged 4% to HK$27.9 on market talks that its major holder Temasek Holdings has disposed all its stake in the insurer.
Gome (00493) also slipped 1.5% to HK$1.35 on news that Bain Capital has sold HK$1bn worth of shares in the company
Sensex, Nifty close in red
Indian stock market closed weaker today, as selling pressure emerged in bluechips on concerns recent gains were excessive. Meanwhile, concerns geopolitical tension in the Middle East and Ukraine could push oil prices higher also dampened sentiment. The Sensex closed 0.55%, or 145.10 points, lower at 26,126.75 points, while the National Stock Exchange's broader 50-share CNX Nifty fell 0.51%, or 40.15 points, to end at 7,790.45 points.
FMCG stocks rose on revival of monsoon rains. Hindustan Unielever (HUL( (up 2.88%, Marico (up 2.65%), Dabur India (up 2.23%) and Godrej Consumer Products (up 2.24%) gained. FMCG firms derive substantial revenue from rural India.
Metal and mining stocks declined. Sesa Sterlite (down 2.23%), JSW Steel (down 3.74%), Hindalco Industries (down 3.01%), NMDC (down 1.12%), Jindal Steel & Power (down 3.74%), Hindustan Zinc (down 3.8%), and Hindustan Copper (down 0.66%) declined. National Aluminum Company rose 1.48%.
Steel Authority of India (Sail) dropped after Finance Minister Arun Jaitley reportedly said today, 25 July 2014, that the government plans to sell 5% stake in the steel major in the current fiscal year. The stock was off 2.94% at Rs 87.55. The government currently owns 80% stake in Sail.
Shares of Tata Motors tumbled on reports that its British luxury car unit Jaguar Land Rover (JLR) has announced a reduction in prices for three of its models selling in China. The stock slumped 5.85%.
Elsewhere in the Asia Pacific region-- New Zealand's NZX50 added 0.38% to 5194.27. Malaysia's KLSE Composite was up 0.02% to 1877.34. South Korea's KOSPI index added 0.36% to 2033.85. Bucking the trend, Taiwan's Taiex index sank 0.93% to 9439.29. Singapore's Straits Times index fell 0.11% to 3350.17. Indonesia's Jakarta Composite Index lost 0.19% to 5088.80.
Global equities advanced today as data showed euro-area manufacturing and services grew in July while Chinese factory activity rose to an 18-month high.
A preliminary reading of the manufacturing PMI for China from HSBC Holdings Plc and Markit Economics increased to 52 in July, from 50.7 the previous month. It was the highest reading since January 2013, and above the 50-point level that separates growth in activity from contraction. The latest data indicated that the economy is picking up as government stimulus measures kick in.
Euro-area manufacturing and services activity strengthened in July in a sign that a recovery in the 18-nation region is gathering pace. A combined purchasing managers index for both industries jumped to 54 this month from 52.8 in June, matching a three-year high reached in April, Markit Economics said on Thursday. Numbers above 50 indicate expansion.
Economic reports in the U.S. were mixed. A Markit Economics factory gauge for the U.S. unexpectedly declined to 56.3 in July from 57.3 the previous month. Readings above 50 indicate expansion. Separate data showed fewer new U.S. homes were sold in June than forecast. Another release showed the number of Americans filing applications for unemployment benefits unexpectedly dropped last week to 284,000, the lowest level in more than eight years.
Among Asian bourses
Nikkei surges to 6-month high
Japan share market closed higher for the first time in three days in row, thanks to yen depreciation against major currency rival. Meanwhile, raft of better-than-estimated earnings in the U.S. and signs of global manufacturing growth underpinned risk sentiment. The benchmark Nikkei 225 index added 1.13%, or 173.45 points, to 15,457.87, its best finish since late January, while the Topix index of all first-section issues rose 0.90%, or 11.49 points, to 1,281.35. The measure posted a 1.4% advance this week.
The yen depreciation against the greenback also bolstered buying activities in the Tokyo bourse. A weaker yen is positive for Japanese exporters and yen sensitive as it makes them more competitive abroad and increase profits when repatriated. The greenback fetched 101.91 yen, against 101.81 yen in New York, where it had jumped from 101.47 yen.
Fanuc advanced 5.3% to 18,390 yen after first-quarter profit doubled. The industrial-robot maker said first-quarter net income jumped 99% to 45.2 billion yen ($444 million).
Chugai Pharmaceutical surged 9.8% to 3,350 yen, after first-half net income climbed. The company posted net income of 28.9 billion yen for the six months ended June 30, up from 25.3 billion yen in the same period last year.
Itochu added 2.5% to 1,348 yen after announcing a share buyback. The trading company said it will spend as much as 110 billion yen to buy back shares. Japan's third-largest trading company also agreed to a business tie-up with Thai agriculture group Charoen Pokphand to expand food supply in the world's most populous region.
Advantest tumbled 6.7% to 1,151 yen after the company reported 1.3 billion yen in net income for the quarter ended June 30, missing market estimates.
Ministry of Internal Affairs and Communications said on Friday that Japan's core consumer prices, stripping out volatile fresh food prices, rose 3.3% year-on-year in June, slower than the 3.4% rise in May. Meanwhile, central Tokyo core CPI rose 2.8% in July.
Australia market snaps seven days rally
Australian stock market finished lower for the first time in eight consecutive sessions, as investors withdrew some profit off the table after headline indices surged to highest level since June 2008 on Thursday. The benchmark S&P/ASX 200 Index declined 4.30 points, or 0.08% to 5583.50, while the broader All Ordinaries Index shed 2.60 points, or 0.05%, to 5574.20. The S&P/ASX 200 Index added 0.9% over the week.
Most of the ASX sectors declined, with shares in bullion, consumer discretionary, consumer staple, telecom, healthcare, realty and mining companies being the biggest losers. Shares of property trusts and financials jumped, capping the market losses.
The volume turnover were light as many larger investors waited out of the market ahead of the upcoming profit reporting season here in Australia and key economic data out in the state and china next week.
Insurance Australia Group jumped 1.9% to A$6.29, on the top of yesterday's 2.2% gain after upgrading its full-year profit margin expectations to their highest level since listing, citing benign weather.
New Crest Mining declined 0.7% to A$10.70, extending yesterday's 6.2% slump after the gold miner had beaten its own gold and copper production targets for the year. Newcrest told the market yesterday it would post impairments charges of A$1.5-2.5 billion for FY14
Kingsgate Mining (KCN) shares closed 2.3% higher to A$0.905 after the firm reported solid fourth quarter numbers. Gold production lifted by 17% to 55,450 ounces taking KCNs FY production numbers hit the top end guidance.
GUD Holdings (GUD) shares declined 8.1% to A$6.60 after announcing a fall in full-year profit. GUD told the market its profit (Full year NPAT of A$17.7 Million) was hit by profit A$13.3 Million in restructuring and impairment costs but GUD did say they are expect the new restructure will turn the business around and improve profitability in the year ahead.
New Zealand shares climb
New Zealand share market rose on Friday, 25 July 2014, led by Xero after investors gained confidence about the cloud-based accounting software firm's US expansion plans following upbeat comments at the company's annual meeting this week. The NZX 50 Index rose 19.556 points, or 0.4%, to 5,194.268. Within the index 21 stocks rose, 18 fell and 11 were unchanged. Turnover was NZ$121 million.
Xero advanced 5.7% to NZ$25.90. The stock has gained 9.8% since its annual general meeting in Wellington on Wednesday when chief executive Rod Drury was upbeat about the company's prospects in the US, where it faces a battle with the incumbent accounting software provider Intuit. Drury belaboured not only a belief that Xero's cloud-based product suite is outgunning Intuit's attempts to move into the cloud, but also that the company will benefit from establishing strong positions in the Australian and UK markets before embarking on the US.
Telecom Corp, New Zealand's largest telecommunications provider, rose 0.7% to NZ$2.954, its highest level since May 2008. The stock has gained 9.6% so far this month as investors favour yield stocks over growth stocks in anticipation the Reserve Bank will keep interest rates on hold for a period after hiking the benchmark yesterday for its fourth consecutive meeting this year.
China stocks rise to 3-month high on manufacturing data
Mainland China share market advanced for fourth consecutive session, as risk sentiment buoyed by an upbeat data on the manufacturing sector which expanded at the fastest pace in 18 months. Optimism that the government would roll out more stimulus to bolster economic growth also gave a boost to the market. The drop in money-market rates also underpinned buying sentiment. The benchmark Shanghai Composite advanced 21.55 points, or 1.02%, to 2126.61, the highest closing level since April. Trading turnover decreased to 111.41 billion yuan from yesterday's 128.68 billion yuan. The benchmark measure added 3.3% this week.
Nomura Securities said in a note yesterday that “the government is expected to loosen the policy further in the third quarter to offset the ongoing property market correction, manage credit risk, and lower financing costs for firms, especially for small and micro-sized enterprises” in order to meet its 2014 growth target of 7.5%.
During an executive meeting of the State Council on Wednesday, Premier Li Keqiang vowed to offer more financing support to the real economy.
The People's Bank of China yesterday refrained from drawing liquidity from the money market for a second time this week. That equals a net cash injection of 18 billion yuan (US$2.9 billion). The move helps to ease concern over liquidity when nine initial public offerings are taking subscriptions.
Materials and energy stocks advanced as an improvement in China's manufacturing reported the day before continued to bolster risk appetite for commodity-linked companies. Jiangxi Copper, China's biggest producer of the metal, climbed 2.4%. Tongling Nonferrous Metals gained 4.8%. Zhuzhou Smelter Group Co. (600961) jumped 4.3%. Yunnan Chihong Zinc & Germanium Co. surged 6%.
Huadian Energy soared 9.7% after the China Securities Journal said that the company parent may announce its asset consolidation and coal business reform plan in the second half of this year.
Hang Seng rises to a three-year high
Hong Kong share market advanced to highest level in three-year, as a raft of better-than-estimated earnings in the U.S. and signs of global manufacturing growth buoyed sentiment. The benchmark Hang Seng Index climbed up 74.51 points, or 0.31%, to 24216.01, the highest close since April, 2011. Turnover softened to HK$76.73 billion from yesterday's HK$86.03 billion. The equity benchmark gained 3.3% this week.
Among the blue chips, 24 rose and 24 fell, with two stocks remaining closed steady. HSBC (00005) gained 1.2% to HK$81.7. China Mobile (00941) softened 1.3% to HK$84.05.
Power Assets Holding shares dropped 1.5% to HK$69.55 after reporting their earnings. The utility company said the Group's unaudited profits were HK$3,616 million after excluding this one-time gain, dropped by 24.2%, mainly due to a reduction of interest in HK Electric from 100% to 49.9%. The turnover was HK$1,432 million, a decrease of 73.9% from a year earlier.
AIA Group (01299) shares closed 0.7% up at HK$41.40 after posting a 23% increase in new business value over the first six months of the year. AIA Group said its value of new business reached a record high of US$792 million, an increase of 22.8% from a year earlier. VONB margin increased to 46.2% from 41.6% for the same period in 2013. Annualised new premium rose 10.7% year-on-year to US$1,690 million. Total weighted premium income was US$9,004 million, up 6% year-on-year. The proposed interim dividend is HK16 cents (2013: HK13.93 cents) per share.
NCI (01336) plunged 4% to HK$27.9 on market talks that its major holder Temasek Holdings has disposed all its stake in the insurer.
Gome (00493) also slipped 1.5% to HK$1.35 on news that Bain Capital has sold HK$1bn worth of shares in the company
Sensex, Nifty close in red
Indian stock market closed weaker today, as selling pressure emerged in bluechips on concerns recent gains were excessive. Meanwhile, concerns geopolitical tension in the Middle East and Ukraine could push oil prices higher also dampened sentiment. The Sensex closed 0.55%, or 145.10 points, lower at 26,126.75 points, while the National Stock Exchange's broader 50-share CNX Nifty fell 0.51%, or 40.15 points, to end at 7,790.45 points.
FMCG stocks rose on revival of monsoon rains. Hindustan Unielever (HUL( (up 2.88%, Marico (up 2.65%), Dabur India (up 2.23%) and Godrej Consumer Products (up 2.24%) gained. FMCG firms derive substantial revenue from rural India.
Metal and mining stocks declined. Sesa Sterlite (down 2.23%), JSW Steel (down 3.74%), Hindalco Industries (down 3.01%), NMDC (down 1.12%), Jindal Steel & Power (down 3.74%), Hindustan Zinc (down 3.8%), and Hindustan Copper (down 0.66%) declined. National Aluminum Company rose 1.48%.
Steel Authority of India (Sail) dropped after Finance Minister Arun Jaitley reportedly said today, 25 July 2014, that the government plans to sell 5% stake in the steel major in the current fiscal year. The stock was off 2.94% at Rs 87.55. The government currently owns 80% stake in Sail.
Shares of Tata Motors tumbled on reports that its British luxury car unit Jaguar Land Rover (JLR) has announced a reduction in prices for three of its models selling in China. The stock slumped 5.85%.
Elsewhere in the Asia Pacific region-- New Zealand's NZX50 added 0.38% to 5194.27. Malaysia's KLSE Composite was up 0.02% to 1877.34. South Korea's KOSPI index added 0.36% to 2033.85. Bucking the trend, Taiwan's Taiex index sank 0.93% to 9439.29. Singapore's Straits Times index fell 0.11% to 3350.17. Indonesia's Jakarta Composite Index lost 0.19% to 5088.80.
