Asia Pacific share market declined on Monday, 09 March 2015, following a
weak trend in global markets as stronger-than-expected US jobs data
rekindled worries that the Federal Reserve might raise interest rates
sooner than previously thought.
The US Federal Reserve monetary policy board has indicated it will begin raising rates this year, with jobs data a key indicator. So news that US employers added 295,000 jobs in February – well ahead of expectations – and that unemployment hit 5.5%, its lowest since 2008 and at the upper end of the Fed's target range, sent traders scrambling to reassess their positions.
Falling unemployment signals rising strength in the US economy, but it has led to fears that the Federal Reserve may raise interest rates sooner than previously thought. If interest rates in the US go up, a lot of liquidity is expected to flow into US bonds, which will be negative for emerging markets.
Among Asian bourses
Australia stocks nosedive on Fed rate hike fears
The Australian share market ended steeply lower, following a weak trend in global markets as strong US jobs data rekindled expectations that the Federal Reserve may raise interest rates sooner than previously thought. Meanwhile, selloff pressure intensified after official data showing German exports fell more than expected in January, while data from China indicated a slide in imports. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both stumbled by 1.3% to 5821.30 and 5793, respectively. Market turnover was relatively healthy, with 1.78 billion shares changing hands worth of A$4.4 billion.
Materials and resources stocks saw broad losses, with iron-ore miners leading the retreat as Tianjin spot ore prices hit $58.20 per metric ton, marking the lowest level since the Steel Index began publishing the prices in 2008. Arrium fell 2.6% to A$0.19, Atlas Iron lost 3% to A$0.16, and BC Iron dropped 6.9% to A$0.41. Fortescue Metals Group declined 0.5% as it appeared set to refinance much of its multi-billion-dollar debt load. Diversified senior miners BHP Billiton dropped 1.5% to A$32.15 and Rio Tinto lost 2% to A$59.20.
Gold miners were also down inline with plunge in the gold price, with Newcrest Mining down 4.7% to A$12.65, Kingsgate Consolidated down 5.9% to A$0.72 and Perseus Mining down 7.3% to A$0.32. Gold fell 2.6% from $US1200 an ounce on Friday after the release of US non-farm payrolls data on Friday night, and was hovering around $US1170 on Monday.
Nikkei drops 0.95%
Japanese share market ended down, reacting to sizeable losses on the Wall Street on Friday after strong US non-farm payroll report refuelling expectations that the Federal Reserve may raise interest rates sooner than previously thought. Meanwhile, risk aversion selloff intensified after revised figures showing the nation's economy grew slower than previously estimated in the fourth quarter of last year. The Nikkei Stock Average retreated by 180.45 points, or 0.95%, to close at 18790.55, off an intra-day high of 18878.15 and day low of 18733.87. The broader Topix index decreased by 9.08 points, or 0.59%, to 1531.76.
Real-estate stocks declined, with Mitsubishi Estate slumping 2% to 2,698 yen, while Sumitomo Realty & Development Co. dropped 3.2% to 4,037.5 yen.
Shares of telecom companies were also down, with NTT Docomo falling 1.5% to 2,209 yen after brokerage Mizuho downgraded the company to underperform from neutral. Other carriers also traded lower, with KDDI Corp. sinking 1.8% to 7,935 yen and Softbank Corp. sliding 1% to 7,005 yen.
Shares of exporters were up, thanks to yen weakening against the greenback. A weaker yen is generally good for Japanese exporters, as it gives them more room to cut prices on goods they sell overseas and increases the yen value of any profits they send back home. Makita, a maker of power tools that gets more than 82% of revenue overseas, added 0.7% to 6,030 yen. Bridgestone Corp., which makes tires, rose 0.6% to 4,716 yen.
Japan Display jumped 1.1% to 481 yen after announcing it will invest 170 billion yen to build a facility in central Japan to produce sixth-generation LCD panels.
Shanghai Composite rebounds 1.9%
Mainland China share market closed higher after reversing earlier losses, on the back of broadbased buying, with shares of lenders leading the rally after reports that the country's securities regulator is considering to allow banks to venture into the stock broking business. The Shanghai Composite Index climbed 61.22 points, or 1.9%, to 3302.41 at the close, erasing a loss of as much as 1.3%. The CSI300 index, the largest listed companies in Shanghai and Shenzhen, advanced 59.23 points, or 1.7%, to 3537.75.
All ten SSE industry groups advanced, with financial issue leading rally, up by 2.8%, followed by consumer staples (up 2.3%), information technology (up 2%), consumer discretionary (up 1.6%), utilities (up 1.6%), energy (up 1.2%), healthcare (up 1.2%), telecom (up 1.1%), industrials (up 1%) and materials (up 0.4%).
Shares of lenders gained the most in the Beijing after statement from the China Securities Regulatory Commission that it's considering allowing banks to apply for securities licenses. China International Capital Corp has estimated that the securities business may contribute up to 2% of the banking industry's net profits if licenses are fully opened. Banks also gained after the government has asked to allow regional authorities to convert some high-yielding debt into municipal bonds. Bank of Beijing Co. jumped 9.2% to 10.80 yuan. China Citic Bank Corp. surged 7.8% to 7.08 yuan. Industrial & Commercial Bank of China added 4.2% to 4.52 yuan and China Construction Bank Corp gained 5.8% to 5.70 yuan.
Hong Kong stocks down for fifth day
Hong Kong share market closed softer in volatile trade, extending fall for straight fifth session, as risk sentiments undermined by tracking Wall Street slump on Friday last week amid fears of earlier rate hike after stronger-than-expected jobs data. The Hang Seng Index ended down 40.95 points or 0.17% to 24123.05, off an intra-day high of 24205.86 and day low of 23910.16. Turnover rose to HK$76.5 billion from HK$72.5 billion on Friday.
Financial and realty stocks declined amid fears of earlier rate hike from the Fed. HSBC Holdings PLC fell 1.8% to HK$66.60. Swire Properties (01972) slid 2% to HK$25.1. Wheelock (00020) dipped 2.9% to HK$39. SHKP (00016) declined 1.3% to HK$120.1. New World Dev (00017) dropped 0.6% to HK$8.94.
Shares of Macau casino operators remained lower despite a senior Chinese official dismissed all recent talks on potential issue of new concession (or license) as rumors. Galaxy Ent (00027) dipped 2.3% to HK$36.85. Sands China (01928) edged down 0.9% to HK$33.65. MGM China (02282) slipped 2% to HK$16.02. Wynn Macau (01128) inched down 0.8% to HK$19.06.
Sensex tumbles in global cues
Trading for the week started on a weak note, as key benchmark indices tumbled on weak global stocks. The barometer index, the S&P BSE Sensex, and 50-unit CNX Nifty hit their lowest closing levels in 1-1/2-week as these two key benchmark indices extended losses in late trade. The Sensex settled below the psychological 29,000 mark. The Sensex and the Nifty, both, ended with losses of more than 2% each. Banking and metal stocks led the decline on the bourses. In overseas markets, European stocks fell as Greece worries bubbled to the surface again. Asian stocks fell as strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought.
The Sensex fell 604.17 points or 2.05% to settle at 28,844.78. All the eight index heavyweights -- ITC, Infosys, HDFC, HDFC Bank, ICICI Bank, L&T and Reliance Industries and TCS -- dropped. The market breadth indicating the overall health of the market was quite weak, almost two losers for every gainer on BSE. The BSE Mid-Cap index was off 1.32%.
Strong US jobs data for February 2015 has spurred speculation that the US Federal Reserve will bring forward the timing of interest-rate increases. There is a concern that a tighter monetary policy in the US may slow foreign portfolio flows into emerging markets. Higher interest rates will boost returns on US debt and bank deposits, drawing money back from riskier emerging markets.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 79.84 crore on Thursday, 5 March 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 193.54 crore on Thursday, 5 March 2015, as per provisional data. The stock market was closed on Friday, 6 March 2015, on account of Holi.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment.
Brent crude oil futures edged lower as upbeat US jobs data pushed the dollar higher, outweighing geopolitical tensions and the threat of output cuts in Libya and Iraq. Global crude oil prices have witnessed high volatility recently after a steep slide in prices during the second half of calendar year 2014. Deregulation of diesel price announced by the Indian government in October 2014 and a decline in global crude oil prices will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
Elsewhere in the Asia Pacific region: South Korea KOSPI declined 1% to 1992.82. Taiwan's Taiex dropped 0.86% to 9562.98. New Zealand NZX50 was down 0.1% to 5896.96. Indonesia's Jakarta Composite index fell 1.3% to 5444.63. Singapore's Straits Times index dropped 0.4% at 3404.57. Malaysia's KLCI sank 0.8% to 1791.74.
The US Federal Reserve monetary policy board has indicated it will begin raising rates this year, with jobs data a key indicator. So news that US employers added 295,000 jobs in February – well ahead of expectations – and that unemployment hit 5.5%, its lowest since 2008 and at the upper end of the Fed's target range, sent traders scrambling to reassess their positions.
Falling unemployment signals rising strength in the US economy, but it has led to fears that the Federal Reserve may raise interest rates sooner than previously thought. If interest rates in the US go up, a lot of liquidity is expected to flow into US bonds, which will be negative for emerging markets.
Among Asian bourses
Australia stocks nosedive on Fed rate hike fears
The Australian share market ended steeply lower, following a weak trend in global markets as strong US jobs data rekindled expectations that the Federal Reserve may raise interest rates sooner than previously thought. Meanwhile, selloff pressure intensified after official data showing German exports fell more than expected in January, while data from China indicated a slide in imports. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both stumbled by 1.3% to 5821.30 and 5793, respectively. Market turnover was relatively healthy, with 1.78 billion shares changing hands worth of A$4.4 billion.
Materials and resources stocks saw broad losses, with iron-ore miners leading the retreat as Tianjin spot ore prices hit $58.20 per metric ton, marking the lowest level since the Steel Index began publishing the prices in 2008. Arrium fell 2.6% to A$0.19, Atlas Iron lost 3% to A$0.16, and BC Iron dropped 6.9% to A$0.41. Fortescue Metals Group declined 0.5% as it appeared set to refinance much of its multi-billion-dollar debt load. Diversified senior miners BHP Billiton dropped 1.5% to A$32.15 and Rio Tinto lost 2% to A$59.20.
Gold miners were also down inline with plunge in the gold price, with Newcrest Mining down 4.7% to A$12.65, Kingsgate Consolidated down 5.9% to A$0.72 and Perseus Mining down 7.3% to A$0.32. Gold fell 2.6% from $US1200 an ounce on Friday after the release of US non-farm payrolls data on Friday night, and was hovering around $US1170 on Monday.
Nikkei drops 0.95%
Japanese share market ended down, reacting to sizeable losses on the Wall Street on Friday after strong US non-farm payroll report refuelling expectations that the Federal Reserve may raise interest rates sooner than previously thought. Meanwhile, risk aversion selloff intensified after revised figures showing the nation's economy grew slower than previously estimated in the fourth quarter of last year. The Nikkei Stock Average retreated by 180.45 points, or 0.95%, to close at 18790.55, off an intra-day high of 18878.15 and day low of 18733.87. The broader Topix index decreased by 9.08 points, or 0.59%, to 1531.76.
Real-estate stocks declined, with Mitsubishi Estate slumping 2% to 2,698 yen, while Sumitomo Realty & Development Co. dropped 3.2% to 4,037.5 yen.
Shares of telecom companies were also down, with NTT Docomo falling 1.5% to 2,209 yen after brokerage Mizuho downgraded the company to underperform from neutral. Other carriers also traded lower, with KDDI Corp. sinking 1.8% to 7,935 yen and Softbank Corp. sliding 1% to 7,005 yen.
Shares of exporters were up, thanks to yen weakening against the greenback. A weaker yen is generally good for Japanese exporters, as it gives them more room to cut prices on goods they sell overseas and increases the yen value of any profits they send back home. Makita, a maker of power tools that gets more than 82% of revenue overseas, added 0.7% to 6,030 yen. Bridgestone Corp., which makes tires, rose 0.6% to 4,716 yen.
Japan Display jumped 1.1% to 481 yen after announcing it will invest 170 billion yen to build a facility in central Japan to produce sixth-generation LCD panels.
Shanghai Composite rebounds 1.9%
Mainland China share market closed higher after reversing earlier losses, on the back of broadbased buying, with shares of lenders leading the rally after reports that the country's securities regulator is considering to allow banks to venture into the stock broking business. The Shanghai Composite Index climbed 61.22 points, or 1.9%, to 3302.41 at the close, erasing a loss of as much as 1.3%. The CSI300 index, the largest listed companies in Shanghai and Shenzhen, advanced 59.23 points, or 1.7%, to 3537.75.
All ten SSE industry groups advanced, with financial issue leading rally, up by 2.8%, followed by consumer staples (up 2.3%), information technology (up 2%), consumer discretionary (up 1.6%), utilities (up 1.6%), energy (up 1.2%), healthcare (up 1.2%), telecom (up 1.1%), industrials (up 1%) and materials (up 0.4%).
Shares of lenders gained the most in the Beijing after statement from the China Securities Regulatory Commission that it's considering allowing banks to apply for securities licenses. China International Capital Corp has estimated that the securities business may contribute up to 2% of the banking industry's net profits if licenses are fully opened. Banks also gained after the government has asked to allow regional authorities to convert some high-yielding debt into municipal bonds. Bank of Beijing Co. jumped 9.2% to 10.80 yuan. China Citic Bank Corp. surged 7.8% to 7.08 yuan. Industrial & Commercial Bank of China added 4.2% to 4.52 yuan and China Construction Bank Corp gained 5.8% to 5.70 yuan.
Hong Kong stocks down for fifth day
Hong Kong share market closed softer in volatile trade, extending fall for straight fifth session, as risk sentiments undermined by tracking Wall Street slump on Friday last week amid fears of earlier rate hike after stronger-than-expected jobs data. The Hang Seng Index ended down 40.95 points or 0.17% to 24123.05, off an intra-day high of 24205.86 and day low of 23910.16. Turnover rose to HK$76.5 billion from HK$72.5 billion on Friday.
Financial and realty stocks declined amid fears of earlier rate hike from the Fed. HSBC Holdings PLC fell 1.8% to HK$66.60. Swire Properties (01972) slid 2% to HK$25.1. Wheelock (00020) dipped 2.9% to HK$39. SHKP (00016) declined 1.3% to HK$120.1. New World Dev (00017) dropped 0.6% to HK$8.94.
Shares of Macau casino operators remained lower despite a senior Chinese official dismissed all recent talks on potential issue of new concession (or license) as rumors. Galaxy Ent (00027) dipped 2.3% to HK$36.85. Sands China (01928) edged down 0.9% to HK$33.65. MGM China (02282) slipped 2% to HK$16.02. Wynn Macau (01128) inched down 0.8% to HK$19.06.
Sensex tumbles in global cues
Trading for the week started on a weak note, as key benchmark indices tumbled on weak global stocks. The barometer index, the S&P BSE Sensex, and 50-unit CNX Nifty hit their lowest closing levels in 1-1/2-week as these two key benchmark indices extended losses in late trade. The Sensex settled below the psychological 29,000 mark. The Sensex and the Nifty, both, ended with losses of more than 2% each. Banking and metal stocks led the decline on the bourses. In overseas markets, European stocks fell as Greece worries bubbled to the surface again. Asian stocks fell as strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought.
The Sensex fell 604.17 points or 2.05% to settle at 28,844.78. All the eight index heavyweights -- ITC, Infosys, HDFC, HDFC Bank, ICICI Bank, L&T and Reliance Industries and TCS -- dropped. The market breadth indicating the overall health of the market was quite weak, almost two losers for every gainer on BSE. The BSE Mid-Cap index was off 1.32%.
Strong US jobs data for February 2015 has spurred speculation that the US Federal Reserve will bring forward the timing of interest-rate increases. There is a concern that a tighter monetary policy in the US may slow foreign portfolio flows into emerging markets. Higher interest rates will boost returns on US debt and bank deposits, drawing money back from riskier emerging markets.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 79.84 crore on Thursday, 5 March 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 193.54 crore on Thursday, 5 March 2015, as per provisional data. The stock market was closed on Friday, 6 March 2015, on account of Holi.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment.
Brent crude oil futures edged lower as upbeat US jobs data pushed the dollar higher, outweighing geopolitical tensions and the threat of output cuts in Libya and Iraq. Global crude oil prices have witnessed high volatility recently after a steep slide in prices during the second half of calendar year 2014. Deregulation of diesel price announced by the Indian government in October 2014 and a decline in global crude oil prices will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
Elsewhere in the Asia Pacific region: South Korea KOSPI declined 1% to 1992.82. Taiwan's Taiex dropped 0.86% to 9562.98. New Zealand NZX50 was down 0.1% to 5896.96. Indonesia's Jakarta Composite index fell 1.3% to 5444.63. Singapore's Straits Times index dropped 0.4% at 3404.57. Malaysia's KLCI sank 0.8% to 1791.74.
