Asia Pacific share market declined on Thursday, 25 June 2015, as
investment rationale soured after negotiations between Greece and its
creditors stumbled, fuelling fears it will default on a loan.
Talks to keep Greece solvent stumbled just ahead of a deadline to reach a
bailout deal, with divisions over pension cuts and other conditions for
aid prompted European finance chiefs to cut short negotiations on
Wednesday. That set the tone for financial markets, weighing U.S. stocks
to suffer a biggest one-day decline in nearly a month in overnight
trading and also triggered a risk aversion selloff in the Asian markets.
Greece will restart crunch talks with its creditors today, 25 June 2015,
in a bid to save Athens from default, after Greece's international
creditors yesterday, 24 June 2015, rejected Greece's latest reform
proposals.
Without a new transfer from its 245 billion euro bailout plan by June
30, Athens will be unable to make a 1.54 billion euro payment to the
IMF. A default on its international creditors — the IMF and other
euro-zone governments — could force Greece into a messy exit from the
euro.
Among Asian bourses
Nikkei drops 0.46% from 18.5 years peak
Japanese share market finished lower for the first time in five
consecutive sessions, as some apparent profit taking triggered after the
market closed at highest level since December 1996 on Wednesday, 24
June 2015. Meanwhile, a weak session on Wall Street overnight, a flat
yen, and lack of a resolution of Greece with its creditors also weighed
on investors sentiments. The Nikkei Stock Average declined 96.63 points,
or 0.46%, to finish at 20771.40. The Topix index of all Tokyo Stock
Exchange First Section issues dropped 0.53%, or 8.98 points, to close at
1670.91.
Export-related stocks closed mixed, after dollar also lost strength
against the yen through the course of the day. Sony Corp was up 1.6%,
Nikon Corp rose 3.4%, and Fast Retailing Co added 0.7%, while Panasonic
Corp declined 0.2%, Toyota Motor Corp lost 1.3%, and Nissan Motor Co
sank 1.6%. Fanuc Corp. sank 2.7% after Goldman Sachs Group Inc. cut its
target price on the robotics maker and removed it from the brokerage's
conviction list.
TDK Corp shed 4.5% after negative comments by Morgan Stanley MUFG
Securities regarding its hard disk-drive shipment outlook. The brokerage
house predicts HDD head shipment volume is likely to be down by more
than the firm's projection of 5% from the prior quarter.
Australia stocks fall 1%
The Australian share market closed lower, as worries about a possible
Greek default triggered risk aversion selloff across the board, with
blue chip shares of IT, industrials, energy, resources, and consumer
goods companies leading fall. The benchmark S&P/ASX 200 Index
dropped 54.10 points, or 0.95%, to 5632.70, while the broader All
Ordinaries Index lost 52.80 points, or 0.93%, to 5619.90. Market
turnover was above average with 2 billion shares changing hands worth of
A$4.49 billion.
Materials and resources stocks closed mostly lower, with Rio Tinto and
BHP Billiton both down 0.1% to A$55.63 and A$28.51, respectively. Junior
iron ore producer Fortescue Metals Group declined 3.6% to A$2.12. Oz
Minerals lost 5.1% to A$4.28 on the back of a Credit Suisse downgrade of
its shares to neutral from outperform. On the upside, Sandfire
Resources rallied 3% to A$6.10, and Talisman Mining climbed 23.1% to
A$0.56 after the pair confirmed a fresh copper-and-gold find at its
joint venture's Springfield Project.
Shares of law firm Slater and Gordon declined 17.5% to A$5.06 as UK
authorities probed the accounts of the Quindell insurance group it
recently bought a slice of.
Retailer Myer Holdings closed steady at A$1.34 after announcing it had refinanced about $460 million of debt at better rates.
Shares of Macmahon Holdings spurted 47.8% to A$0.07 after announcing the
sale of its Mongolian unit for roughly $65 million. Macmahon said
completion of the sale would result in it exiting from its mining
contract with Erdenes Tavan Tolgoi LLC, with whom it had been in dispute
over payment delay.
China market stocks tumble on profit taking
The Mainland China share market closed sharply down in volatile trading,
as some investors took advantage of gains in morning to reduce risk
exposure. All 10 industry groups in the SSE Index dropped, with a
sub-index of technology, consumer discretionary, healthcare, materials,
and energy companies being top losers. The Shanghai Composite Index
declined 162.37 points, or 3.46% to end at 4527.78, erasing an intraday
gain of 0.7% and snapping a two-day, 4.7% advance. The Shenzhen
Composite Index, which tracks stocks on China's second exchange,
retreated 3.76%, or 106.02 points, to 2716.71.
Shares of technology companies were biggest drag in the Beijing market
on profit taking amid mounting concern valuations are too high relative
to earnings growth. Beijing Shiji Information Technology Co. and Hundsun
Technologies Inc. both fell by the 10% daily limit. Leshi Internet
Information & Technology (Beijing) Co. dropped 7.9%.
Banks and financial stocks were also down amid bout of panic selling
despite China's decision to scrap debt-to-loan ratios (LDRs).
Increasingly cautious investors ignored central bank's market-friendly
move to ease short-term liquidity. China will remove the country's
long-standing loan-to-deposit ratio requirement of 75%, in a bid to lend
out more to a slowing economy, according to a statement by the State
Council late Wednesday. Market economists expects the removal could
allow 3.5 trillion yuan of potential credit into China's financial
system, equivalent to a 250 basis point cut to banks' reserve ratio
requirements.
Industrial & Commercial Bank of China declined 1.3% to
5.15 yuan, Agricultural Bank of China lost 1.6% to 3.69 yuan, and Bank
of Communication dropped 3% to 7.84 yuan.
Hong Kong market falls
The Hong Kong stock market closed down, breaking a four-day rising
streak, as jitters over apparently stalled Greek debt negotiations
triggered profit-taking. A decline in the Mainland market also soured
investors' sentiments. The Hang Seng Index dropped 259.22 points or
0.95% to finish at 27120.72, off an intra-day high of 27350.49 and day
low of 27120.72. The Hang Seng China Enterprises Index, benchmark
measure of performance of mainland China enterprises, declined 216.90
points, or 1.58%, to 13467.90 points. Turnover reduced slightly to
HK$118.5 billion from HK$117 billion on Wednesday.
Shares of Chinese banks were mixed after reports that China will remove
the mandatory Loan to Deposit ratio (LDR) for banks. Minsheng Bank
(01988) gained 2% to HK$10.66. But CCB (00939) slipped 1.2% to HK$7.28.
Elsewhere, Lenovo (00992) slid 3% to HK$10.94 ahead of its parent
company Legend Holding's (03396) upcoming debut on the local stock
exchange on Monday.
L&M Handbags (01488) soared 27% to HK$1.49 after announcing its
controlling shareholder had been approached by an independent third
party with a proposal to acquire its stake in the listed company.
Sensex hits highest level in almost five weeks
Indian market ended higher amid volatile trades owing to expiry of
derivatives contracts for the month of June, with shares of capital
goods, oil & gas and banking players being major gainers. But, the
gains in market were capped due to losses in technology and FMCG stocks.
As per provisional closing, the S&P BSE Sensex was up 204.27 points
or 0.74% to 27933.94, while the Nifty was up 37.15 points or 0.44% at
8398.
Labour Minister Bandaru Dattatreya was quoted as saying in an interview
to a news agency yesterday, 24 June 2015, that the Employees Provident
Fund Organisation (EPFO) will invest about $800 million in equities in
the current fiscal year starting from July 2015.
Prime Minister Narendra Modi today, 25 June 2015, launched three mega
urban development initiatives viz., Smart Cities Mission, Atal Mission
for Rejuvenation and Urban Transformation (AMRUT) and Housing for All in
urban area.
Meanwhile, Reserve Bank of India Governor Raghuram Rajan was quoted as
saying at a conference in Stockholm yesterday, 24 June 2015, that Indian
financial markets have the strength to withstand any fallout of a Greek
default on its repayment obligations.
Foreign portfolio investors (FPIs) bought Indian shares worth a net Rs
92.57 crore yesterday, 24 June 2015, as per provisional data released by
the stock exchanges. Domestic institutional investors (DIIs) bought
shares worth a net Rs 13.52 crore yesterday, 24 June 2015, as per
provisional data released by the stock exchanges.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose
0.8% to 9476.34. South Korea's KOSPI fell 0.02% to 2085.06. New
Zealand's NZX50 dropped 0.7% to 5733.29. Singapore's Straits Times index
lost 0.04% at 3349.87. Malaysia's KLCI declined 0.9% to 1716.81.
Indonesia's Jakarta Composite index fell 0.7% to 4920.04.
