Asia Pacific share market closed mixed on Thursday, 04 June 2015, as
positive lead from Wall Street overnight offset by caution before
critical Athens debt repayment deadline tomorrow.
The weakness was also coincided with a selloff in Asian bonds. The drop for Asian debt began after a sharp rise in yields on German bunds. Yields rise as bond prices fall. Increase in bond yields weighed on Asian stocks.
US shares ended on a high note on Wednesday after official figures showed solid growth in private-sector job hiring and a healthy outlook on the economy in the Federal Reserve's latest update. In its closely watched Beige Book, the Fed said the world's number one economy returned to modest-to-moderate growth in April and May after stalling in the first three months of the year, partly because of severe winter weather. On Wall Street the Dow added 0.36%, the S&P 500 rose 0.21% and the Nasdaq put on 0.45%.
Positive mood was also supported by comments from European Central Bank chief Mario Draghi, who said its new stimulus programme of bond-purchasing had begun to kick and there were no plans to end it early. The ECB also projected eurozone inflation would reach 0.3% in 2015, up from its previous forecast of flat prices, while it kept its 2016 forecast at 1.5% and its 2017 forecast at 1.8%.
Greek Prime Minister Alexi Tsipras met with Eurozone Commission president Jean-Claude Juncker and head of Eurogroup finance minister Jeroen Dijsselbloem yesterday. After the meeting, Dijsselbloem said the meeting was "good" and intense work would continue. Tspiras also mentioned that there was progress on sticking point regarding the primary surplus and "there was a constructive will from the European Commission to reach a common understanding". There are worries that if Greece defaults on its debt, that may mean a departure from the euro zone.
A 300 million euro payment from Greece to the IMF is due on Friday, 5 June 2015. Friday's payment is the first of four totalling 1.5 billion euro that Greece is due to pay to the IMF in June. There are fears Greece does not have the necessary funds to pay and could default on the debt, possibly setting off a chain reaction that could end with a messy exit from the eurozone.
Among Asian bourses
Australia market hurt by record trade gap
The Australian share market extended losing streak for fourth straight day, as risk aversion selloff triggered after flat retail sales in April and a disappointing blow-out in trade figures for the same period. All ASX sectoral indices dived into sea of red, with heavyweights of bullion, utilities, realty, materials, energy, industrials and financials issues being top losers. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both dropped by 1.4% to 5504.30 and 5511.30, respectively. Market turnover was relatively healthy, with 1.41 billion shares changing hands worth of A$3.44 billion.
The Australia Bureau of Statistics said that country's recorded A$3.88 billion trade deficit in April 2015, an increase of A$2.66 billion or 216% from A$1.2 billion revised deficit in March 2015. The value of exports dropped by 6% to A$25.66 billion in April over the month, while imports rose by 4% to A$29.55 billion in April from sequential previous month.
The latest Australian Bureau of Statistics (ABS) Retail Trade figures show that Australian retail turnover was relatively unchanged in April (0.0%) following a rise of 0.2% in March 2015, seasonally adjusted.
Financial stocks declined, with top four lenders being biggest drag on the market as heavy selling risks turning into a rout. The Commonwealth Bank of Australia retreated 1.3% to A$80.54, Westpac Banking Corp 1.4% to A$31.40, and ANZ Banking Group 1.3% to A$31.50. National Australia Bank fell 2.1% to A$32.32 after the Australian Financial Review reported that it is in talks to sell its underperforming life insurance business to Nippon Life.
Shares of energy players declined amid sizeable drop in crude-oil futures. The West Texas Intermediate (WTI) oil price tumbled 2.6% to $US59.64 a barrel overnight. Woodside Petroleum was down 1.4% to A$35.18, Oil Search 2.3% to A$7.17, Origin Energy 2.5% to A$12.72, and WorleyParsons 2.8% to A$10.10.
Materials and resources stocks declined despite another bump up in the iron ore price overnight. Copper slipped 0.4% to a little under $US2.73 a pound and gold gave up 0.8% to $US1,185 an ounce. However, iron ore bucked the trend as it rose 0.5% to a three-and-a half-month high of $US63.33 a tonne. Among major miners- BHP Billiton dropped by 1.5% at A$28.09 and Rio Tinto degrew 1.3% to A$56.74. Fortescue Metals Group tanked 6.2% to A$2.28. Gold miner Newcrest Mining lost 3.3% to A$13.35 and Perseus Mining declined 6.8% to A$0.41.
Metcash dropped 17.7% to A$1.14 after the grocery wholesaler shocked investors by suspending its dividend payments after making $640 million worth of writedowns. The company said it wouldn't pay a dividend in the next 18 months as it tries to beef up its IGA store network to better compete with larger supermarket rivals Coles, Woolworths and Aldi.
Japan stocks up as yen softens
Japanese share market closed marginally higher, registering first gain in three straight days, propelled by positive lead from Wall Street overnight and yen depreciation against the greenback. The Nikkei Stock Average advanced 14.68 points, or 0.07%, to end at 20488.19. The Topix index of all Tokyo Stock Exchange First Section issues climbed up 0.23%, or 3.90 points, to 1673.89.
Shares of export-related companies were outperformer in the Tokyo market, as the US bought 124.38 yen, rebounding from the 123.85 yen recorded at the previous day's Tokyo stock close. A weak yen is positive for Japanese exporters as it makes them more competitive abroad and inflates profits when repatriated. Among blue-chip exporters- Sony Corp was up 0.5% to 3773 yen, Fujitsu rose 1.9% to 742.20 yen, Nissan Motor Co improved by 0.8% to 1330.50 yen, and Hitachi rose by 0.3% to 844 yen. Robot-builder Fanuc Corp jumped 0.5% to 27555 yen.
Nissan Chemical Industries added 2.7% to 2764 yen after Nomura Holdings Inc. raised its price target on the stock by 28% to 3200 yen. The brokerage maintained its buy rating, citing growing profits.
Shares of Softbank Corp declined 1.2% to 7348 yen after saying it would buy a $1 billion stake in Forward Ventures, a company that runs the popular South Korean shopping website Coupang.
Ecommerce major Rakuten Inc. fell 6.2% to 1951.50 yen on reports that the company planned to sell about $1.6 billion worth of new shares. The proceeds from Rakuten's first share issuance in nine years will mainly be used to pay down debt, much of it run up during the company's current spending spree as it strives to become a global provider of Internet content.
China stocks end higher in rollercoaster ride
Mainland China share market finished a rollercoaster trade in positive territory after recouping heavy intraday losses sparked by jitters over a clampdown on lending to investors. But gains were marginal amid concerns new share offers would likely pressure on the market liquidity. The Shanghai Composite Index, which had been up as much as 0.7% earlier trading, fell as much as 5.3% after the midday break Thursday before recovering almost as rapidly, closing up 0.8% to 4947.10.
The heavy drop on the Beijing markets was sparked by news that brokerage suspended margin financing for smaller companies. Golden Sun Securities Co. removed the companies from its list of shares eligible for margin trading on Thursday, citing the gauge's recent rally and high price-to-earnings ratios. The selloff also coincided with a selloff in Asian bonds, with reports that some sovereign yields hitting their highest levels in years. The drop for Asian debt began after a sharp rise in yields on German bunds
Subscriptions opened for 12 initial public offerings yesterday following 11 on Tuesday. The subscriptions were expected to lock up more than US$1 trillion.
Shares of Information Technology players were major drag on the Beijing market, with Tsinghua Tongfang Co leading losses, down 7.2%, after its owner Zhao Weiguo said the industry has entered a “serious bubble” in China.
Shares of financial companies were top performer in Beijing after People's Bank of China statement that from January to May, it provided pledged supplementary lending (PSL) of 262.8 billion yuan (US$42.4 billion) to financial institutions. Began in 2014, the PSL program is designed to boost liquidity in certain sectors by offering low-cost loans to select lenders. The PSL interest rate is 3.1%, down from 4.5%. Bank of Communications Co rose 8.5% on optimism that the government is poised to approve its reform plans.
HSI closes 0.4% down in volatile trade
The Hong Kong stock market finished the session weaker in volatile trading, as risk aversion selloff triggered by tracking rollercoaster ride in Mainland China share market. The Hong Kong benchmark index opened little changed and soared 197 points at one stage. But around early afternoon it suddenly plunged 563 points and saw its intra-day low of 27,094. The Hang Seng Index ended down 105.58 points or 0.38% to 27551.89, off an intra-day high of 27854.74 and day low of 27094.50. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, gained 12.07 points, or 0.09%, to 14127.01 points. Turnover increased to HK$195.23 billion from HK$150.55 billion on Wednesday.
Banks and financials advanced, with Bank of Communications Co leading the rally, up 5.5% to HK$8.05, on reports that its final mixed-ownership reform plan was submitted to the State Council about a month ago could receive a green light in two weeks at the soonest. Other Chinese banks also rose, partly boosted by a state-media report that taxes for the financial, property and consumer-services sectors may be lowered soon as part of the reform of the value-added tax expected to come out in July.
China Merchants Bank Co gained 2.8% to HK$25.60, China Citic Bank Corp 0.9% to HK$6.62, Bank of China 1% to HK$5.23, and China Construction Bank Corp 1.5% to HK$7.91.
Electric-car and battery maker BYD Co jumped 8.8% to HK$59.30 after the company announced a share placement of 261 million new mainland-China-listed shares in order to raise as much as 15 billion yuan ($2.4 billion) for battery-production expansion and alternative-energy vehicle research.
Macau gaming players were higher as research house saw green shoots from May's gross gaming revenue. Sands China (01928) gained 4.8% to HK$29.80 and Galaxy Ent (00027) put on 3.3% to HK$36.
Sensex breadths weak
Indian indices extended decline and hit fresh intraday low in afternoon trade, tracking weak European markets. The barometer index, the S&P BSE Sensex, and, the 50-unit CNX Nifty, both, hit their lowest level in 4 weeks. At 14:16 IST, the S&P BSE Sensex was down 238.03 points or 0.89% at 26,599.17. The CNX Nifty was down 67 points or 0.82% at 8,068.10.
Foreign portfolio investors sold Indian shares worth a net Rs 727.61 crore yesterday, 3 June 2015, as per provisional data. Domestic institutional investors (DIIs) bought shares worth a net Rs 412.66 crore yesterday, 3 June 2015, as per provisional data released by the stock exchanges.
IT major Infosys, announced during trading hours today that it completed the acquisition of Kallidus Inc. (d.b.a Skava) and its affiliate, a leading provider of digital experience solutions, including mobile commerce and in-store shopping experiences to large retail clients. The acquisition is in accordance with the terms set out in the agreement announced on 24 April 2015. The acquisition of Skava is part of Infosys' strategy to help clients bring new digital experiences to their customers through IP-led technology offerings, new automation tools and unparalleled skill and expertise in these new emerging areas.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index tumbled 2.2% to 9348.63. South Korea's KOSPI rose 0.5% to 2072.86. New Zealand's NZX50 was up 0.1% to 5865.44. Singapore's Straits Times index fell 0.05% at 3348.03. Malaysia's KLCI sank 0.4% to 1741.48. Indonesia's Jakarta Composite index slipped 0.7% to 5095.82.
The weakness was also coincided with a selloff in Asian bonds. The drop for Asian debt began after a sharp rise in yields on German bunds. Yields rise as bond prices fall. Increase in bond yields weighed on Asian stocks.
US shares ended on a high note on Wednesday after official figures showed solid growth in private-sector job hiring and a healthy outlook on the economy in the Federal Reserve's latest update. In its closely watched Beige Book, the Fed said the world's number one economy returned to modest-to-moderate growth in April and May after stalling in the first three months of the year, partly because of severe winter weather. On Wall Street the Dow added 0.36%, the S&P 500 rose 0.21% and the Nasdaq put on 0.45%.
Positive mood was also supported by comments from European Central Bank chief Mario Draghi, who said its new stimulus programme of bond-purchasing had begun to kick and there were no plans to end it early. The ECB also projected eurozone inflation would reach 0.3% in 2015, up from its previous forecast of flat prices, while it kept its 2016 forecast at 1.5% and its 2017 forecast at 1.8%.
Greek Prime Minister Alexi Tsipras met with Eurozone Commission president Jean-Claude Juncker and head of Eurogroup finance minister Jeroen Dijsselbloem yesterday. After the meeting, Dijsselbloem said the meeting was "good" and intense work would continue. Tspiras also mentioned that there was progress on sticking point regarding the primary surplus and "there was a constructive will from the European Commission to reach a common understanding". There are worries that if Greece defaults on its debt, that may mean a departure from the euro zone.
A 300 million euro payment from Greece to the IMF is due on Friday, 5 June 2015. Friday's payment is the first of four totalling 1.5 billion euro that Greece is due to pay to the IMF in June. There are fears Greece does not have the necessary funds to pay and could default on the debt, possibly setting off a chain reaction that could end with a messy exit from the eurozone.
Among Asian bourses
Australia market hurt by record trade gap
The Australian share market extended losing streak for fourth straight day, as risk aversion selloff triggered after flat retail sales in April and a disappointing blow-out in trade figures for the same period. All ASX sectoral indices dived into sea of red, with heavyweights of bullion, utilities, realty, materials, energy, industrials and financials issues being top losers. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both dropped by 1.4% to 5504.30 and 5511.30, respectively. Market turnover was relatively healthy, with 1.41 billion shares changing hands worth of A$3.44 billion.
The Australia Bureau of Statistics said that country's recorded A$3.88 billion trade deficit in April 2015, an increase of A$2.66 billion or 216% from A$1.2 billion revised deficit in March 2015. The value of exports dropped by 6% to A$25.66 billion in April over the month, while imports rose by 4% to A$29.55 billion in April from sequential previous month.
The latest Australian Bureau of Statistics (ABS) Retail Trade figures show that Australian retail turnover was relatively unchanged in April (0.0%) following a rise of 0.2% in March 2015, seasonally adjusted.
Financial stocks declined, with top four lenders being biggest drag on the market as heavy selling risks turning into a rout. The Commonwealth Bank of Australia retreated 1.3% to A$80.54, Westpac Banking Corp 1.4% to A$31.40, and ANZ Banking Group 1.3% to A$31.50. National Australia Bank fell 2.1% to A$32.32 after the Australian Financial Review reported that it is in talks to sell its underperforming life insurance business to Nippon Life.
Shares of energy players declined amid sizeable drop in crude-oil futures. The West Texas Intermediate (WTI) oil price tumbled 2.6% to $US59.64 a barrel overnight. Woodside Petroleum was down 1.4% to A$35.18, Oil Search 2.3% to A$7.17, Origin Energy 2.5% to A$12.72, and WorleyParsons 2.8% to A$10.10.
Materials and resources stocks declined despite another bump up in the iron ore price overnight. Copper slipped 0.4% to a little under $US2.73 a pound and gold gave up 0.8% to $US1,185 an ounce. However, iron ore bucked the trend as it rose 0.5% to a three-and-a half-month high of $US63.33 a tonne. Among major miners- BHP Billiton dropped by 1.5% at A$28.09 and Rio Tinto degrew 1.3% to A$56.74. Fortescue Metals Group tanked 6.2% to A$2.28. Gold miner Newcrest Mining lost 3.3% to A$13.35 and Perseus Mining declined 6.8% to A$0.41.
Metcash dropped 17.7% to A$1.14 after the grocery wholesaler shocked investors by suspending its dividend payments after making $640 million worth of writedowns. The company said it wouldn't pay a dividend in the next 18 months as it tries to beef up its IGA store network to better compete with larger supermarket rivals Coles, Woolworths and Aldi.
Japan stocks up as yen softens
Japanese share market closed marginally higher, registering first gain in three straight days, propelled by positive lead from Wall Street overnight and yen depreciation against the greenback. The Nikkei Stock Average advanced 14.68 points, or 0.07%, to end at 20488.19. The Topix index of all Tokyo Stock Exchange First Section issues climbed up 0.23%, or 3.90 points, to 1673.89.
Shares of export-related companies were outperformer in the Tokyo market, as the US bought 124.38 yen, rebounding from the 123.85 yen recorded at the previous day's Tokyo stock close. A weak yen is positive for Japanese exporters as it makes them more competitive abroad and inflates profits when repatriated. Among blue-chip exporters- Sony Corp was up 0.5% to 3773 yen, Fujitsu rose 1.9% to 742.20 yen, Nissan Motor Co improved by 0.8% to 1330.50 yen, and Hitachi rose by 0.3% to 844 yen. Robot-builder Fanuc Corp jumped 0.5% to 27555 yen.
Nissan Chemical Industries added 2.7% to 2764 yen after Nomura Holdings Inc. raised its price target on the stock by 28% to 3200 yen. The brokerage maintained its buy rating, citing growing profits.
Shares of Softbank Corp declined 1.2% to 7348 yen after saying it would buy a $1 billion stake in Forward Ventures, a company that runs the popular South Korean shopping website Coupang.
Ecommerce major Rakuten Inc. fell 6.2% to 1951.50 yen on reports that the company planned to sell about $1.6 billion worth of new shares. The proceeds from Rakuten's first share issuance in nine years will mainly be used to pay down debt, much of it run up during the company's current spending spree as it strives to become a global provider of Internet content.
China stocks end higher in rollercoaster ride
Mainland China share market finished a rollercoaster trade in positive territory after recouping heavy intraday losses sparked by jitters over a clampdown on lending to investors. But gains were marginal amid concerns new share offers would likely pressure on the market liquidity. The Shanghai Composite Index, which had been up as much as 0.7% earlier trading, fell as much as 5.3% after the midday break Thursday before recovering almost as rapidly, closing up 0.8% to 4947.10.
The heavy drop on the Beijing markets was sparked by news that brokerage suspended margin financing for smaller companies. Golden Sun Securities Co. removed the companies from its list of shares eligible for margin trading on Thursday, citing the gauge's recent rally and high price-to-earnings ratios. The selloff also coincided with a selloff in Asian bonds, with reports that some sovereign yields hitting their highest levels in years. The drop for Asian debt began after a sharp rise in yields on German bunds
Subscriptions opened for 12 initial public offerings yesterday following 11 on Tuesday. The subscriptions were expected to lock up more than US$1 trillion.
Shares of Information Technology players were major drag on the Beijing market, with Tsinghua Tongfang Co leading losses, down 7.2%, after its owner Zhao Weiguo said the industry has entered a “serious bubble” in China.
Shares of financial companies were top performer in Beijing after People's Bank of China statement that from January to May, it provided pledged supplementary lending (PSL) of 262.8 billion yuan (US$42.4 billion) to financial institutions. Began in 2014, the PSL program is designed to boost liquidity in certain sectors by offering low-cost loans to select lenders. The PSL interest rate is 3.1%, down from 4.5%. Bank of Communications Co rose 8.5% on optimism that the government is poised to approve its reform plans.
HSI closes 0.4% down in volatile trade
The Hong Kong stock market finished the session weaker in volatile trading, as risk aversion selloff triggered by tracking rollercoaster ride in Mainland China share market. The Hong Kong benchmark index opened little changed and soared 197 points at one stage. But around early afternoon it suddenly plunged 563 points and saw its intra-day low of 27,094. The Hang Seng Index ended down 105.58 points or 0.38% to 27551.89, off an intra-day high of 27854.74 and day low of 27094.50. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, gained 12.07 points, or 0.09%, to 14127.01 points. Turnover increased to HK$195.23 billion from HK$150.55 billion on Wednesday.
Banks and financials advanced, with Bank of Communications Co leading the rally, up 5.5% to HK$8.05, on reports that its final mixed-ownership reform plan was submitted to the State Council about a month ago could receive a green light in two weeks at the soonest. Other Chinese banks also rose, partly boosted by a state-media report that taxes for the financial, property and consumer-services sectors may be lowered soon as part of the reform of the value-added tax expected to come out in July.
China Merchants Bank Co gained 2.8% to HK$25.60, China Citic Bank Corp 0.9% to HK$6.62, Bank of China 1% to HK$5.23, and China Construction Bank Corp 1.5% to HK$7.91.
Electric-car and battery maker BYD Co jumped 8.8% to HK$59.30 after the company announced a share placement of 261 million new mainland-China-listed shares in order to raise as much as 15 billion yuan ($2.4 billion) for battery-production expansion and alternative-energy vehicle research.
Macau gaming players were higher as research house saw green shoots from May's gross gaming revenue. Sands China (01928) gained 4.8% to HK$29.80 and Galaxy Ent (00027) put on 3.3% to HK$36.
Sensex breadths weak
Indian indices extended decline and hit fresh intraday low in afternoon trade, tracking weak European markets. The barometer index, the S&P BSE Sensex, and, the 50-unit CNX Nifty, both, hit their lowest level in 4 weeks. At 14:16 IST, the S&P BSE Sensex was down 238.03 points or 0.89% at 26,599.17. The CNX Nifty was down 67 points or 0.82% at 8,068.10.
Foreign portfolio investors sold Indian shares worth a net Rs 727.61 crore yesterday, 3 June 2015, as per provisional data. Domestic institutional investors (DIIs) bought shares worth a net Rs 412.66 crore yesterday, 3 June 2015, as per provisional data released by the stock exchanges.
IT major Infosys, announced during trading hours today that it completed the acquisition of Kallidus Inc. (d.b.a Skava) and its affiliate, a leading provider of digital experience solutions, including mobile commerce and in-store shopping experiences to large retail clients. The acquisition is in accordance with the terms set out in the agreement announced on 24 April 2015. The acquisition of Skava is part of Infosys' strategy to help clients bring new digital experiences to their customers through IP-led technology offerings, new automation tools and unparalleled skill and expertise in these new emerging areas.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index tumbled 2.2% to 9348.63. South Korea's KOSPI rose 0.5% to 2072.86. New Zealand's NZX50 was up 0.1% to 5865.44. Singapore's Straits Times index fell 0.05% at 3348.03. Malaysia's KLCI sank 0.4% to 1741.48. Indonesia's Jakarta Composite index slipped 0.7% to 5095.82.
