Asia Pacific share market ended down on Thursday, 29 January 2015, as
participants' locked-in recent gains in bluechip stocks after the US
Federal Reserve unexpectedly lifted its view on the economy, signaling
that the US central bank remains firmly on track with plans to raise
interest rates this year.
The MSCI Asia Pacific Index lost 1.1% to 140.79. Key benchmark indices in New Zealand, Japan, Taiwan, South Korea, China, Hong Kong, and Malaysia and fell by 0.54% to 1.31% while Singapore Strait Times ended steady.
Among major regional bourses
Australia market rises for sixth straight session
The Australian share market ended higher, registering sixth session of consecutive rise, as gains in utilities, financial, material and consumer goods stocks were more than offset by losses in energy, technology, and bullion counters. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both rose by 0.3% to 5569.50 and 5532.20, respectively.
Financial stocks extended gains on belief that interest rates will fall, with top lenders leading rally. Commonwealth Bank of Australia advanced 1.2% to A$88.76, ANZ Banking Group 1% to A$32.95, and National Australia Bank 0.9% to A$35.50, while Westpac Banking Corp fell 0.1% to A$34.64 amid news it was selling its businesses in five smaller Pacific-Island nations but keeping those in Fiji and Papua New Guinea. Financial services firm AMP gained 1.8% to A$5.80. Insurance Australia Group closed up 2.1% at A$6.41. Insurer Suncorp gained 1.3% to A$14.58.
Fortescue Metals rocketed 9.3% to A$2.23 after a production report that included a downward revision for the cost outlook and a halving of capital-spending guidance. The miner lowered its cost guidance for the full year by 9% while maintaining its full-year production and shipping guidance. Fortescue also believes it will escape asset write-downs at its half-year financial results next month. Atlas Iron, which also cut its capex view but raised its output forecast, rallied 6.3% to A$0.17.
Copper miner PanAust strengthened 5% to A$1.27 after posting better than expected December quarter results and exceeding its own full-year guidance. However, PanAust indicated the carrying values of some assets would have to be revisited on the back of the 24% decline in the copper price over the past year.
Woodside Petroleum tumbled 1.8% to A$33.74 after it and its partners were accused of holding back natural gas shipments to China as a negotiating tactic to raise the price of a contract guaranteeing 25 years of cheap energy. The A$25 billion contract, signed in 2002, contained no clause to raise the historically low price.
Nikkei falls on stronger yen, earnings disappointment
Japanese share market ended down, as profit booking triggered amid stronger yen against the greenback and brisk selloff on the Wall Street overnight. Meanwhile, selloff pressure intensified with some disappointing earnings and a surprise bankruptcy from Skymark Airlines Inc. The benchmark Nikkei Stock Average declined 1.06% to close at 17606.22, while the broader Topix has lost 1.14% to close at 1413.58.
Shares of Canon fell 5.1% to 3741 yen after the firm booked a fourth quarter operating profit of 98.5 billion yen, up 5.3% on-year but short of the street consensus. The firm also said it expects profit growth to slow in 2015 due to weaker demand in Europe and a weaker euro.
Game maker Nintendo plunged 8.7% after the company slashed its operating profit guidance to Y20 billion from Y40 billion.
Shares of Nintendo Co. lost 8.7% to 11235 yen after the game maker posted a net-profit gain but cut its operating-profit outlook to Y20 billion from Y40 billion.
Komatsu dropped 8.5% to 2366 yen despite a 5.5% gain in quarterly earnings, as its chief executive officer said China sales would continue to be weak.
Industrial robot-maker Fanuc Corp lost 3.4% to 20130 yen as management made no changes to its full year guidance, despite the fact that operating profits for its first three quarters accounted for a high 80% of its full-year target.
Fujifilm Holdings was up 3.9% to 3985 yen after posting better than expected quarterly results and raising guidance, dividend estimate, and a share buyback program announcement of up Y50 billion.
shares of Skymark Airlines settled at their daily limit-down low of Y237 (dropping 25%) after the company filed for bankruptcy protection, cited rising fuel costs due to a weak yen and a cancelled order for several jumbo jets with Airbus last year that incurred large cancellation fees.
Shanghai Composite falls 1.3%
Mainland China share market closed down for third consecutive session, extending losses into a second session, in response to fresh worries over Beijing's restrictions on lending by local brokerages. The Shanghai Composite Index dropped 1.3% to 3262.31 at the close, paring January's gain to 0.9%.
The news reported on Wednesday that securities regulator plans a new round of checks into the margin-lending businesses of brokerages. Regulators are increasing scrutiny on margin financing and umbrella trusts after investors ramped up bets on rallying shares through the use of leverage. Higher leverage exposes individuals to larger losses in the event of stock-market drops, which can be exaggerated as investors scramble to repay debt during a selloff.
Investors have ramped up bets on rallying shares by borrowing through structures known as umbrella trusts, which allow for more leverage than brokerage financing. In umbrella trusts, private investors take up the junior tranche, while cash from trusts and banks' wealth-management products form the senior tranches. The latter receive fixed returns while the former take the rest, so private investors are effectively borrowing from trusts and banks. The higher leverage allowed by the products exposes individuals to larger losses in the event of stock-market drops, which can be exaggerated as investors scramble to repay debt during a selloff.
Total of 8 out of ten SSE industry groups declined, with shares of financial issue falling the most, down 2.1%, followed by healthcare (down 1.8%), consumer discretionary (down 1.8%), telecom (down 1.5%), consumer staples (down 1.2%), materials (down 1.2%), energy (down 1.1%), and industrials (down 0.5%). On the upside, information technology was up 0.4% and utilities rose 1.2%.
Shares of lenders, brokerages, insurers and some new economy stocks which have benefited from growth in margin debt were the most vulnerable in the Beijing. Citic Securities Co dropped 2.4% and Haitong Securities fell 3.2%. Western Securities Co. slumped 3.9%. China Life Insurance Co. declined 2.3%. Industrial & Commercial Bank of China Ltd. slid 2.8%.
Railway-related stocks advanced after the government said it will promote railway firms' overseas investments. CSR added 0.9% and China Railway Group gained 1.2%.
Hang Seng ends 1.07% down
Hong Kong share market declined on Thursday, 29 January 2015, as risk sentiments dented after Wall Street had reacted negatively overnight to a drop in the oil price and the US Federal Reserve's assessment of the US economy. Meanwhile, selloff pressure intensified on tracking decline in Mainland A-share market which fell on speculation of increased scrutiny of margin trading. The Hang Seng Index ended down 265.96 points or 1.07% to 24595.85, off an intra-day high of 24739.22 and day low of 24524.18. Turnover increased to HK$89.47 billion from HK$80.37 billion on Wednesday.
Within HK 50 blue chips, 21 stocks rose and 29 fell. Hengan (01044) put on 3.6% to HK$88.8 after Goldman Sachs put the stock into its conviction buy list, while CR Power (00836) declined 4% to HK$21.85, making themselves the biggest blue chip winner and loser.
Banks and financial companies retreated broadly, with China Minsheng Banking Corp down 4.5% to HK$9.50, while China Merchants Bank Co shed 2.2% to HK$17.28, Industrial & Commercial Bank of China lost 2.1% to HK$5.60, and Bank of Communications Co fell 2.6% to HK$6.45. London-based Standard Chartered PLC tumbled 4% to HK$106.50 amid further reports its chief executive was under pressure from shareholders, and Sino-British banking giant HSBC Holdings PLC dropped 1% to HK$72.30.
Chinese brokerage firms suffered substantial losses after the securities regulator announced on Wednesday that it soon would launch a second round of its crackdown on margin trading practices. Shenyin Wanguo HK slid 4.9% to HK$6.17, Guotai Junan International Holdings fell 3.1% to HK$5.58, China Galaxy Securities Co shed 2% to HK$8.38 and Citic Securities Co moved 2.8% lower at HK$24.75.
Shares of energy companies declined after crude oil prices plunged to 6-year low after the US released higher-than-expected oil inventory. CNOOC (00883) slipped 2.5% to HK$10.2. PetroChina (00857) fell 2% to HK$8.42. Sinopec (00386) dipped 1% to HK$6.17.
Sensex, Nifty logs new closing peaks on fag-end buying
A rebound in late trade took key benchmark indices into positive zone from negative zone. The rebound in late trade materialized after key benchmark indices languished in negative zone almost throughout the trading session. As per provisional closing, the S&P BSE Sensex was up 122.59 points or 0.4% at 29684.77. The CNX Nifty was up 38.05 points or 0.43% at 8,952.35.
Index heavyweight and cigarette major ITC edged higher. Index heavyweight Reliance Industries (RIL) edged higher on reports that RIL and its partner BP plc of UK will invest about Rs 6000 crore by 2016 to help sustain and improve recovery from the two main gas fields in the eastern offshore KG-D6 block. Dr Reddy's Laboratories (DRL) rose in volatile trade after declaring Q3 result. Sesa Sterlite rose after declaring Q3 result.
HDFC Bank edged higher after the Cabinet Committee on Economic Affairs gave its approval to the proposal of the private sector bank for maintaining the permissible foreign holding in the bank up to 74% of the total paid up capital and issuance of equity shares of the bank aggregating to an amount of Rs 10000 crore to NRIs/FIIs/FPIs subject to aggregate foreign shareholding not exceeding 74% of the post issue paid up capital of the bank. HDFC dropped after announcing Q3 result.
PSU OMCs were in demand as global crude oil prices dropped overnight with shares of HPCL scaling record high. Coal India dropped in volatile trade after the government after market hours yesterday, 28 January 2015, announced that it will sell up to 10% stake in the state-run coal major through the stock exchanges mechanism on Friday, 30 January 2015.
Foreign portfolio investors (FPIs) bought Indian shares worth a net Rs 1723.17 crore yesterday, 28 January 2015, as per provisional data.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.88% to 9426.90. South Korea KOSPI sank 0.54% to 1951.02. New Zealand's NZX50 shed 0.6% at 5759.81. Singapore's Straits Times index was a tad lower at 3419.05. Indonesia's Jakarta Composite index was down 0.12% to 5262.72. Malaysia's KLCI fell 0.76% to 1782.18.
The MSCI Asia Pacific Index lost 1.1% to 140.79. Key benchmark indices in New Zealand, Japan, Taiwan, South Korea, China, Hong Kong, and Malaysia and fell by 0.54% to 1.31% while Singapore Strait Times ended steady.
Among major regional bourses
Australia market rises for sixth straight session
The Australian share market ended higher, registering sixth session of consecutive rise, as gains in utilities, financial, material and consumer goods stocks were more than offset by losses in energy, technology, and bullion counters. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both rose by 0.3% to 5569.50 and 5532.20, respectively.
Financial stocks extended gains on belief that interest rates will fall, with top lenders leading rally. Commonwealth Bank of Australia advanced 1.2% to A$88.76, ANZ Banking Group 1% to A$32.95, and National Australia Bank 0.9% to A$35.50, while Westpac Banking Corp fell 0.1% to A$34.64 amid news it was selling its businesses in five smaller Pacific-Island nations but keeping those in Fiji and Papua New Guinea. Financial services firm AMP gained 1.8% to A$5.80. Insurance Australia Group closed up 2.1% at A$6.41. Insurer Suncorp gained 1.3% to A$14.58.
Fortescue Metals rocketed 9.3% to A$2.23 after a production report that included a downward revision for the cost outlook and a halving of capital-spending guidance. The miner lowered its cost guidance for the full year by 9% while maintaining its full-year production and shipping guidance. Fortescue also believes it will escape asset write-downs at its half-year financial results next month. Atlas Iron, which also cut its capex view but raised its output forecast, rallied 6.3% to A$0.17.
Copper miner PanAust strengthened 5% to A$1.27 after posting better than expected December quarter results and exceeding its own full-year guidance. However, PanAust indicated the carrying values of some assets would have to be revisited on the back of the 24% decline in the copper price over the past year.
Woodside Petroleum tumbled 1.8% to A$33.74 after it and its partners were accused of holding back natural gas shipments to China as a negotiating tactic to raise the price of a contract guaranteeing 25 years of cheap energy. The A$25 billion contract, signed in 2002, contained no clause to raise the historically low price.
Nikkei falls on stronger yen, earnings disappointment
Japanese share market ended down, as profit booking triggered amid stronger yen against the greenback and brisk selloff on the Wall Street overnight. Meanwhile, selloff pressure intensified with some disappointing earnings and a surprise bankruptcy from Skymark Airlines Inc. The benchmark Nikkei Stock Average declined 1.06% to close at 17606.22, while the broader Topix has lost 1.14% to close at 1413.58.
Shares of Canon fell 5.1% to 3741 yen after the firm booked a fourth quarter operating profit of 98.5 billion yen, up 5.3% on-year but short of the street consensus. The firm also said it expects profit growth to slow in 2015 due to weaker demand in Europe and a weaker euro.
Game maker Nintendo plunged 8.7% after the company slashed its operating profit guidance to Y20 billion from Y40 billion.
Shares of Nintendo Co. lost 8.7% to 11235 yen after the game maker posted a net-profit gain but cut its operating-profit outlook to Y20 billion from Y40 billion.
Komatsu dropped 8.5% to 2366 yen despite a 5.5% gain in quarterly earnings, as its chief executive officer said China sales would continue to be weak.
Industrial robot-maker Fanuc Corp lost 3.4% to 20130 yen as management made no changes to its full year guidance, despite the fact that operating profits for its first three quarters accounted for a high 80% of its full-year target.
Fujifilm Holdings was up 3.9% to 3985 yen after posting better than expected quarterly results and raising guidance, dividend estimate, and a share buyback program announcement of up Y50 billion.
shares of Skymark Airlines settled at their daily limit-down low of Y237 (dropping 25%) after the company filed for bankruptcy protection, cited rising fuel costs due to a weak yen and a cancelled order for several jumbo jets with Airbus last year that incurred large cancellation fees.
Shanghai Composite falls 1.3%
Mainland China share market closed down for third consecutive session, extending losses into a second session, in response to fresh worries over Beijing's restrictions on lending by local brokerages. The Shanghai Composite Index dropped 1.3% to 3262.31 at the close, paring January's gain to 0.9%.
The news reported on Wednesday that securities regulator plans a new round of checks into the margin-lending businesses of brokerages. Regulators are increasing scrutiny on margin financing and umbrella trusts after investors ramped up bets on rallying shares through the use of leverage. Higher leverage exposes individuals to larger losses in the event of stock-market drops, which can be exaggerated as investors scramble to repay debt during a selloff.
Investors have ramped up bets on rallying shares by borrowing through structures known as umbrella trusts, which allow for more leverage than brokerage financing. In umbrella trusts, private investors take up the junior tranche, while cash from trusts and banks' wealth-management products form the senior tranches. The latter receive fixed returns while the former take the rest, so private investors are effectively borrowing from trusts and banks. The higher leverage allowed by the products exposes individuals to larger losses in the event of stock-market drops, which can be exaggerated as investors scramble to repay debt during a selloff.
Total of 8 out of ten SSE industry groups declined, with shares of financial issue falling the most, down 2.1%, followed by healthcare (down 1.8%), consumer discretionary (down 1.8%), telecom (down 1.5%), consumer staples (down 1.2%), materials (down 1.2%), energy (down 1.1%), and industrials (down 0.5%). On the upside, information technology was up 0.4% and utilities rose 1.2%.
Shares of lenders, brokerages, insurers and some new economy stocks which have benefited from growth in margin debt were the most vulnerable in the Beijing. Citic Securities Co dropped 2.4% and Haitong Securities fell 3.2%. Western Securities Co. slumped 3.9%. China Life Insurance Co. declined 2.3%. Industrial & Commercial Bank of China Ltd. slid 2.8%.
Railway-related stocks advanced after the government said it will promote railway firms' overseas investments. CSR added 0.9% and China Railway Group gained 1.2%.
Hang Seng ends 1.07% down
Hong Kong share market declined on Thursday, 29 January 2015, as risk sentiments dented after Wall Street had reacted negatively overnight to a drop in the oil price and the US Federal Reserve's assessment of the US economy. Meanwhile, selloff pressure intensified on tracking decline in Mainland A-share market which fell on speculation of increased scrutiny of margin trading. The Hang Seng Index ended down 265.96 points or 1.07% to 24595.85, off an intra-day high of 24739.22 and day low of 24524.18. Turnover increased to HK$89.47 billion from HK$80.37 billion on Wednesday.
Within HK 50 blue chips, 21 stocks rose and 29 fell. Hengan (01044) put on 3.6% to HK$88.8 after Goldman Sachs put the stock into its conviction buy list, while CR Power (00836) declined 4% to HK$21.85, making themselves the biggest blue chip winner and loser.
Banks and financial companies retreated broadly, with China Minsheng Banking Corp down 4.5% to HK$9.50, while China Merchants Bank Co shed 2.2% to HK$17.28, Industrial & Commercial Bank of China lost 2.1% to HK$5.60, and Bank of Communications Co fell 2.6% to HK$6.45. London-based Standard Chartered PLC tumbled 4% to HK$106.50 amid further reports its chief executive was under pressure from shareholders, and Sino-British banking giant HSBC Holdings PLC dropped 1% to HK$72.30.
Chinese brokerage firms suffered substantial losses after the securities regulator announced on Wednesday that it soon would launch a second round of its crackdown on margin trading practices. Shenyin Wanguo HK slid 4.9% to HK$6.17, Guotai Junan International Holdings fell 3.1% to HK$5.58, China Galaxy Securities Co shed 2% to HK$8.38 and Citic Securities Co moved 2.8% lower at HK$24.75.
Shares of energy companies declined after crude oil prices plunged to 6-year low after the US released higher-than-expected oil inventory. CNOOC (00883) slipped 2.5% to HK$10.2. PetroChina (00857) fell 2% to HK$8.42. Sinopec (00386) dipped 1% to HK$6.17.
Sensex, Nifty logs new closing peaks on fag-end buying
A rebound in late trade took key benchmark indices into positive zone from negative zone. The rebound in late trade materialized after key benchmark indices languished in negative zone almost throughout the trading session. As per provisional closing, the S&P BSE Sensex was up 122.59 points or 0.4% at 29684.77. The CNX Nifty was up 38.05 points or 0.43% at 8,952.35.
Index heavyweight and cigarette major ITC edged higher. Index heavyweight Reliance Industries (RIL) edged higher on reports that RIL and its partner BP plc of UK will invest about Rs 6000 crore by 2016 to help sustain and improve recovery from the two main gas fields in the eastern offshore KG-D6 block. Dr Reddy's Laboratories (DRL) rose in volatile trade after declaring Q3 result. Sesa Sterlite rose after declaring Q3 result.
HDFC Bank edged higher after the Cabinet Committee on Economic Affairs gave its approval to the proposal of the private sector bank for maintaining the permissible foreign holding in the bank up to 74% of the total paid up capital and issuance of equity shares of the bank aggregating to an amount of Rs 10000 crore to NRIs/FIIs/FPIs subject to aggregate foreign shareholding not exceeding 74% of the post issue paid up capital of the bank. HDFC dropped after announcing Q3 result.
PSU OMCs were in demand as global crude oil prices dropped overnight with shares of HPCL scaling record high. Coal India dropped in volatile trade after the government after market hours yesterday, 28 January 2015, announced that it will sell up to 10% stake in the state-run coal major through the stock exchanges mechanism on Friday, 30 January 2015.
Foreign portfolio investors (FPIs) bought Indian shares worth a net Rs 1723.17 crore yesterday, 28 January 2015, as per provisional data.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.88% to 9426.90. South Korea KOSPI sank 0.54% to 1951.02. New Zealand's NZX50 shed 0.6% at 5759.81. Singapore's Straits Times index was a tad lower at 3419.05. Indonesia's Jakarta Composite index was down 0.12% to 5262.72. Malaysia's KLCI fell 0.76% to 1782.18.
