Asia Pacific share market closed mostly higher on Tuesday, 02 December
2014, helped by promises from U.S. policymakers and the head of the IMF
that lower fuel costs would boost the world economy. Meanwhile, rebound
in crude oil and other commodity prices also favoured the stock market
gains.
IMF Managing Director Christine Lagarde said late on Monday that falling oil prices were a positive for the global economy as a whole, though they may hurt individual commodity exporters. "Assuming we have a 30% decline (in oil prices), it's likely to be an additional 0.8% (in economic growth) for most advanced economies, because all of them are importers of oil," Lagarde said, mentioning the United States, Europe, Japan and China in particular.
Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley also said at separate events on Monday that soft oil prices would only temporarily dampen overall U.S. prices. The pair painted a mostly rosy outlook, suggesting the Fed was not letting energy markets distract it from lifting rates.
Crude oil held on to its gains after rebounding sharply overnight from five-year lows. U.S. crude oil was down 0.7% at $68.50 a barrel, after posting a 4% rise overnight from a five-year low of $63.72 as bearish positions were squeezed.
Among Asian bourses
Aussie stocks bounce 1.4% on bottom fishing
Headline shares of the Australian market rebounded sharply, sending the benchmark S&P/ASX 200 index higher by 73.60 points, or 1.41%, to end the day at 5281.30. The rise in local bourses came as the investors chased for bottom fishing following steep losses recently, led by banks and financial leading rally after the Reserve Bank of Australia held the official cash rate at its record low 2.5% for the 15th consecutive month.
Shares of energy and mining sectors climbed up the most in Sydney as bargain hunting resumed after selling down heavily over the previous three sessions. Australia's biggest oil producer Woodside Petroleum rallied 1.9% to A$34.86 after shedding 14.2% over the previous three sessions. Oil Search bounced 5.6% to A$7.70. Origin Energy recovered 0.5% to A$11.76. Santos bounced 0.9% to A$9.19. Resources giant BHP Billiton added 3.9% to A$30.40, while main rival Rio Tinto rose 2.2% to A$57.93. Fortescue dropped 1.9% to A$2.57, after UBS estimated that with the iron ore price below $US73 per tonne Australia's third largest iron ore miner is not profitable.
Financial stocks were also higher, with top four lenders being major gainers after the Reserve Bank of Australia's kept the cash rate on hold and ABS data a showed a bigger-than- expected 11.4% jump in building approvals during October. Commonwealth Bank of Australia added 1.2% to A$80.74, while Westpac Banking Corporation grew 1.5% to A$32.73. ANZ Banking Group jumped 0.2% to A$31.72 and National Australia Bank rose 0.8% to A$32.39.
On the macro front, the Australian Bureau of Statistics said on Tuesday that Australia's current-account deficit narrowed to a seasonally adjusted A$12.5 billion in the third quarter from A$13.9 billion in the second. The second-quarter deficit was revised upwards from the A$13.7 billion initially reported.
Separately, the Australian Bureau of Statistics said on Tuesday that the approvals to build or renovate houses and apartments rose by 11.4% in October. In September, approvals overall fell by 11.2%. Permits to build houses fell by 0.2% in October from September, while approvals for apartments, townhouses and other dwellings rose by 31.3%.
Australia's central bank left its benchmark interest rate unchanged for the 16th-straight month at a record-low 2.5% on Tuesday, saying the economy continued to face the twin challenges of falling commodity prices and an elevated currency.
Nikkei hits fresh seven-year high on weak yen
Japanese stock market closed at fresh seven year high after recouping early losses, thanks to yen depreciation against the greenback. However, a sovereign-credit downgrade for Japan capped on the upside move. The benchmark Nikkei Stock Average closed higher by 73.12 points, or 0.42%, to 17663.22, a fresh seven-year high.
The Tokyo market commenced trading with back footing after both Wall Street and the dollar succumbed to overnight sell pressure. But stocks gradually recovered as the greenback found bargain-buying by early afternoon. As of the end of trading, the U.S. currency was changing hands at Y118.91, well off its intraday low.
Moody's downgraded the Japanese government's credit rating to Aa3 from A1 with stable outlook, in the wake of the Prime Minister Shinzo Abe's decision to delay an increase in sales tax. The ratings agency said the debt rating was lowered by one notch amid “heightened uncertainty” about the government's ability to meet its debt reduction goals and uncertainty about the timing and effectiveness of measures to boost economic growth. Japan raised its sales tax in April and planned another increase next year as part of efforts to repair government finances. But Abe decided last month to delay the second tax increase after the economy slipped into recession in the third quarter.
Exporters shares closed higher as the yen weakened against major currencies, elevating the overseas earnings when repatriate them home. Toyota Motor Corp added 1.3% to 7,527 yen. Honda Motor Co increased 0.9% to 3,628 yen. Olympus Corp., the world's largest maker of endoscopes, rose 2.3% to 4,540 yen.
Shares of retailers closed down after November monthly department store sales showed only tepid on-year improvement. Isetan Mitsukoshi's sales rose 0.7% and Takashimaya's showed a 0.6% gain, but their shares nevertheless fell 1.4% and 0.6%, respectively. J. Front Retailing also lost 2.3%.
Among individual share movers, GS Yuasa fell 2.5% at after the maker of lithium ion batteries for Boeing's 787 Dreamliner's was found to have failed to follow general industry practices, according to U.S. federal accident investigators.
Beverage maker Ito En lost 2.5% after lowering its full-year consolidated net profit outlook to Y6.2 billion--a 49% on-year fall--reflecting a swing-to-the-red from its prior view of an 8.0% rise. The company blamed inclement summer weather and poor sales of its mineral water products for the pessimism.
TDK Corp added 4.7% to 7540 yen after Nomura Securities hiked its price target to 9000 yen from 7300 yen while keeping its Buy rating intact. The brokerage cited more favorable currency market assumptions, upward revisions to the firm's earnings outlook for passive components, especially for automotive applications, and an increase in its assessment for HDD head demand, as reasons for the move.
China stocks surges 3.11% on stimulus speculation
Mainland China share market closed sharply higher, propelled by mounting speculation that central bank would announce further monetary stimulus after data released yesterday showing slower-than-forecast growth in manufacturing. The Shanghai Composite Index advanced 83.39 points, or 3.11%, to 2763.54 at the close. Full-day turnover was strong, with 437.73 billion shares changed hand worth of 397.24 billion yuan.
The risk appetite buying in the Shanghai market accelerated as the slower-than-forecasted growth in manufacturing increased speculation the central bank will follow up on last month's cut in interest rates with a reduction in lenders' reserve-requirement ratios.
Shares of financial companies advanced amid optimism lower borrowing costs will boost consumer spending. Founder Securities and China Merchants Bank shot up 10% each. Minsheng Banking was also 10% higher after announcing Anbang Insurance bought 5% of its shares.
Hang Seng bounces 1.23% on bargain buying
Hong Kong share market ended higher, as investor chased for bottom fishing following yesterday steep selloff and on tracking sharp gain on the mainland China shares. The Hang Seng Index advanced 286.85 points, or 1.23%, to 23654.30, off an intra-day high of 23784.95 and low of 23293.81. Turnover decreased to HK$104.41 billion from HK$105.14 billion on Monday.
Shares of Chinese insurers listed in HK rebounded strongly. Ping An (02318) surged 6% to HK$68.8 on talks that Jack Ma of Alibaba and Huateng Ma of Tencent would take part the insurer's placement. It was the top blue-chip performer. China Life (02628) also gained 5.7% to HK$27.1. CPIC (02601) soared 5.2% to HK$33.15. NCI (01336) jumped 6% to HK$35.8.
Shares of Macau casino players remained under pressure after Macau government announced that November gross gaming revenues (GGR) fell 19.6% to MOP24.3 billion. Sands China (01928) dipped 2.8% to HK$44.25. It was the worst blue-chip loser. Galaxy Ent (00027) edged down 0.3% to HK$51.4.
Shares of energy companies rebounded after crude oil prices bottomed out from its 5-year low, with Brent January futures rising 3.2% to US$72.54. PetroChina (00857) put on 1.9% to HK$8.19. CNOOC (00883) added 1.1% to HK$10.84.Sinopec (00386) nudged up 0.8% to HK$6.14.
Gold miners climbed up on tracking gain on the bullion prices. Spot gold price jumped 4.2% to US$1,216.34 overnight. Zijin Mining (02899) gained 3.5% to HK$2.06. Zhaojin Mining (01818) added 1.5% to HK$3.97.
Sensex slides as RBI maintains status-quo on key policy rates
Indian stock market closed downas the Reserve Bank of India (RBI) kept its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review and said that risks to the January 2016 target of 6% appear evenly balanced under the current policy stance. As per provisional closing, the S&P BSE Sensex was down 124.70 points or 0.44% at 28,434.92. The CNX Nifty was down 31.20 points or 0.36% at 8,524.70.
Bank stocks edged higher in volatile trade after the RBI indicated that monetary policy easing is likely early next year, including outside the policy review cycle, provided the current inflation momentum and changes in inflationary expectations continue and if fiscal developments are encouraging. Interest rate sensitive auto and realty stocks declined. Shares of PSU OMCs dropped after Media reports suggested that the government has once again raised excise duty on petrol and diesel.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.91% to 9034.79. South Korea KOSPI was up 0.03% to 1965.83. New Zealand's NZX50 edged up 0.01% to 5430.035. Singapore's Straits Times index rose 0.5% at 3322.32. Malaysia's KLCI rose 0.43% to 1785.97. Indonesia's Jakarta Composite index added 0.22% to 5175.79.
IMF Managing Director Christine Lagarde said late on Monday that falling oil prices were a positive for the global economy as a whole, though they may hurt individual commodity exporters. "Assuming we have a 30% decline (in oil prices), it's likely to be an additional 0.8% (in economic growth) for most advanced economies, because all of them are importers of oil," Lagarde said, mentioning the United States, Europe, Japan and China in particular.
Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley also said at separate events on Monday that soft oil prices would only temporarily dampen overall U.S. prices. The pair painted a mostly rosy outlook, suggesting the Fed was not letting energy markets distract it from lifting rates.
Crude oil held on to its gains after rebounding sharply overnight from five-year lows. U.S. crude oil was down 0.7% at $68.50 a barrel, after posting a 4% rise overnight from a five-year low of $63.72 as bearish positions were squeezed.
Among Asian bourses
Aussie stocks bounce 1.4% on bottom fishing
Headline shares of the Australian market rebounded sharply, sending the benchmark S&P/ASX 200 index higher by 73.60 points, or 1.41%, to end the day at 5281.30. The rise in local bourses came as the investors chased for bottom fishing following steep losses recently, led by banks and financial leading rally after the Reserve Bank of Australia held the official cash rate at its record low 2.5% for the 15th consecutive month.
Shares of energy and mining sectors climbed up the most in Sydney as bargain hunting resumed after selling down heavily over the previous three sessions. Australia's biggest oil producer Woodside Petroleum rallied 1.9% to A$34.86 after shedding 14.2% over the previous three sessions. Oil Search bounced 5.6% to A$7.70. Origin Energy recovered 0.5% to A$11.76. Santos bounced 0.9% to A$9.19. Resources giant BHP Billiton added 3.9% to A$30.40, while main rival Rio Tinto rose 2.2% to A$57.93. Fortescue dropped 1.9% to A$2.57, after UBS estimated that with the iron ore price below $US73 per tonne Australia's third largest iron ore miner is not profitable.
Financial stocks were also higher, with top four lenders being major gainers after the Reserve Bank of Australia's kept the cash rate on hold and ABS data a showed a bigger-than- expected 11.4% jump in building approvals during October. Commonwealth Bank of Australia added 1.2% to A$80.74, while Westpac Banking Corporation grew 1.5% to A$32.73. ANZ Banking Group jumped 0.2% to A$31.72 and National Australia Bank rose 0.8% to A$32.39.
On the macro front, the Australian Bureau of Statistics said on Tuesday that Australia's current-account deficit narrowed to a seasonally adjusted A$12.5 billion in the third quarter from A$13.9 billion in the second. The second-quarter deficit was revised upwards from the A$13.7 billion initially reported.
Separately, the Australian Bureau of Statistics said on Tuesday that the approvals to build or renovate houses and apartments rose by 11.4% in October. In September, approvals overall fell by 11.2%. Permits to build houses fell by 0.2% in October from September, while approvals for apartments, townhouses and other dwellings rose by 31.3%.
Australia's central bank left its benchmark interest rate unchanged for the 16th-straight month at a record-low 2.5% on Tuesday, saying the economy continued to face the twin challenges of falling commodity prices and an elevated currency.
Nikkei hits fresh seven-year high on weak yen
Japanese stock market closed at fresh seven year high after recouping early losses, thanks to yen depreciation against the greenback. However, a sovereign-credit downgrade for Japan capped on the upside move. The benchmark Nikkei Stock Average closed higher by 73.12 points, or 0.42%, to 17663.22, a fresh seven-year high.
The Tokyo market commenced trading with back footing after both Wall Street and the dollar succumbed to overnight sell pressure. But stocks gradually recovered as the greenback found bargain-buying by early afternoon. As of the end of trading, the U.S. currency was changing hands at Y118.91, well off its intraday low.
Moody's downgraded the Japanese government's credit rating to Aa3 from A1 with stable outlook, in the wake of the Prime Minister Shinzo Abe's decision to delay an increase in sales tax. The ratings agency said the debt rating was lowered by one notch amid “heightened uncertainty” about the government's ability to meet its debt reduction goals and uncertainty about the timing and effectiveness of measures to boost economic growth. Japan raised its sales tax in April and planned another increase next year as part of efforts to repair government finances. But Abe decided last month to delay the second tax increase after the economy slipped into recession in the third quarter.
Exporters shares closed higher as the yen weakened against major currencies, elevating the overseas earnings when repatriate them home. Toyota Motor Corp added 1.3% to 7,527 yen. Honda Motor Co increased 0.9% to 3,628 yen. Olympus Corp., the world's largest maker of endoscopes, rose 2.3% to 4,540 yen.
Shares of retailers closed down after November monthly department store sales showed only tepid on-year improvement. Isetan Mitsukoshi's sales rose 0.7% and Takashimaya's showed a 0.6% gain, but their shares nevertheless fell 1.4% and 0.6%, respectively. J. Front Retailing also lost 2.3%.
Among individual share movers, GS Yuasa fell 2.5% at after the maker of lithium ion batteries for Boeing's 787 Dreamliner's was found to have failed to follow general industry practices, according to U.S. federal accident investigators.
Beverage maker Ito En lost 2.5% after lowering its full-year consolidated net profit outlook to Y6.2 billion--a 49% on-year fall--reflecting a swing-to-the-red from its prior view of an 8.0% rise. The company blamed inclement summer weather and poor sales of its mineral water products for the pessimism.
TDK Corp added 4.7% to 7540 yen after Nomura Securities hiked its price target to 9000 yen from 7300 yen while keeping its Buy rating intact. The brokerage cited more favorable currency market assumptions, upward revisions to the firm's earnings outlook for passive components, especially for automotive applications, and an increase in its assessment for HDD head demand, as reasons for the move.
China stocks surges 3.11% on stimulus speculation
Mainland China share market closed sharply higher, propelled by mounting speculation that central bank would announce further monetary stimulus after data released yesterday showing slower-than-forecast growth in manufacturing. The Shanghai Composite Index advanced 83.39 points, or 3.11%, to 2763.54 at the close. Full-day turnover was strong, with 437.73 billion shares changed hand worth of 397.24 billion yuan.
The risk appetite buying in the Shanghai market accelerated as the slower-than-forecasted growth in manufacturing increased speculation the central bank will follow up on last month's cut in interest rates with a reduction in lenders' reserve-requirement ratios.
Shares of financial companies advanced amid optimism lower borrowing costs will boost consumer spending. Founder Securities and China Merchants Bank shot up 10% each. Minsheng Banking was also 10% higher after announcing Anbang Insurance bought 5% of its shares.
Hang Seng bounces 1.23% on bargain buying
Hong Kong share market ended higher, as investor chased for bottom fishing following yesterday steep selloff and on tracking sharp gain on the mainland China shares. The Hang Seng Index advanced 286.85 points, or 1.23%, to 23654.30, off an intra-day high of 23784.95 and low of 23293.81. Turnover decreased to HK$104.41 billion from HK$105.14 billion on Monday.
Shares of Chinese insurers listed in HK rebounded strongly. Ping An (02318) surged 6% to HK$68.8 on talks that Jack Ma of Alibaba and Huateng Ma of Tencent would take part the insurer's placement. It was the top blue-chip performer. China Life (02628) also gained 5.7% to HK$27.1. CPIC (02601) soared 5.2% to HK$33.15. NCI (01336) jumped 6% to HK$35.8.
Shares of Macau casino players remained under pressure after Macau government announced that November gross gaming revenues (GGR) fell 19.6% to MOP24.3 billion. Sands China (01928) dipped 2.8% to HK$44.25. It was the worst blue-chip loser. Galaxy Ent (00027) edged down 0.3% to HK$51.4.
Shares of energy companies rebounded after crude oil prices bottomed out from its 5-year low, with Brent January futures rising 3.2% to US$72.54. PetroChina (00857) put on 1.9% to HK$8.19. CNOOC (00883) added 1.1% to HK$10.84.Sinopec (00386) nudged up 0.8% to HK$6.14.
Gold miners climbed up on tracking gain on the bullion prices. Spot gold price jumped 4.2% to US$1,216.34 overnight. Zijin Mining (02899) gained 3.5% to HK$2.06. Zhaojin Mining (01818) added 1.5% to HK$3.97.
Sensex slides as RBI maintains status-quo on key policy rates
Indian stock market closed downas the Reserve Bank of India (RBI) kept its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review and said that risks to the January 2016 target of 6% appear evenly balanced under the current policy stance. As per provisional closing, the S&P BSE Sensex was down 124.70 points or 0.44% at 28,434.92. The CNX Nifty was down 31.20 points or 0.36% at 8,524.70.
Bank stocks edged higher in volatile trade after the RBI indicated that monetary policy easing is likely early next year, including outside the policy review cycle, provided the current inflation momentum and changes in inflationary expectations continue and if fiscal developments are encouraging. Interest rate sensitive auto and realty stocks declined. Shares of PSU OMCs dropped after Media reports suggested that the government has once again raised excise duty on petrol and diesel.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.91% to 9034.79. South Korea KOSPI was up 0.03% to 1965.83. New Zealand's NZX50 edged up 0.01% to 5430.035. Singapore's Straits Times index rose 0.5% at 3322.32. Malaysia's KLCI rose 0.43% to 1785.97. Indonesia's Jakarta Composite index added 0.22% to 5175.79.
