Headline equities of the Asia Pacific market mostly ended lower on
Wednesday, 22 July 2015, as profit booking triggered on following the
decline of European and the US equity markets overnight after
disappointing corporate results. The MSCI Asia Pacific Index retreated
1% to 143.87.
The US market ended lower on Tuesday after weak earnings from bellwethers IBM and United Technologies, while Apple Inc slumped in late trading after posting its results. IBM reported lower revenues for the 13th consecutive quarter and United Technologies cut its earnings forecasts because of weak growth in China and weak aviation parts sales. The Dow Jones Industrial Average tumbled 1%, while the broad-based SP500 dropped 0.43% and the tech-rich Nasdaq Composite Index fell 0.21%.
Bullion prices resumed downward trend today, as looming hike in U.S. interest rates has dented gold's appeal as an investment, encouraging more sellers in the market after Monday's 4% rout. Spot gold fell 0.7% to $1,093.71 an ounce by 0610 GMT, just shy of Monday's trough of $1,088.05 - its lowest since March 2010 - following a selloff exacerbated by huge volumes traded on the Shanghai Gold Exchange. The Shanghai rout happened after investors dumped more than $500 million worth of bullion in New York in early Asian trading hours.
Investors' unloaded bullion against a backdrop of improving risk sentiment after Greece agreed on a plan with its creditors that will keep it in the euro zone for now. Standard & Poor's on Tuesday upgraded Greece's sovereign credit rating by two notches and revised its outlook to stable from negative, citing euro zone countries' initial agreement to start negotiations with Athens on a third bailout.
Crude oil futures remained under pressure as investors worried about ample supply. U.S. crude was down 1.4% at $50.13, while Brent shed about 0.9% to $56.53.
Among Asian bourses
Australia market snaps six days rally
The Australian share market finished weaker for the first time in seven consecutive sessions, as some investors opted withdrawing profit off the table amid weak lead from Wall Street overnight and other Asian markets. Most of the ASX blue chip declined, with stocks of earnings and output reports took centre stage. The benchmark S&P/ASX 200 Index dropped 92.10 points, or 1.61%, to 5614.60 points, while the broader All Ordinaries Index lost 85 points, or 1.49%, to 5603.50 points.
Shares of material and resources stocks were major drag on the Sydney market. BHP Billiton sank 2% to A$26.27 after warning of new impairment charges of up to A$650 million. The miner, however, revised up its iron ore export guidance for the 2015 financial year and vowing to grow exports of the bulk commodity by 7% over the next 12 months. The miner forecasted to export 250 million tonnes from its Pilbara operations, including tonnes owned by joint venture partners, and went beyond that to ship 256 million tonnes. Fellow mining giant Rio Tinto also slipped 2.2% to A$52.18.
Shares in the South32 dropped 2.2% to A$1.78, well below their listing price of A$2.05, after announcing it will write down $US1.9 billion of its manganese and coal businesses after suspending capacity at its South African smelter.
Shares of Gold miners, which endured a horror day on Monday with A$1.5 billion wiped off the sector, extended retreat today after bullion prices resumed downward trend. Among heavyweight bullion miners, Newcrest Mining declined 1.4% to A$11.53 and Perseus Mining lost 4.2% to A$0.34.
Boral shares climbed 1.4% to A$6.45 on upbeat guidance for the fiscal year ended in June. Construction Materials Company expected net profit before significant items for 2014-15 to be about A$240 million to A$250 million.
The Consumer Price Index (CPI) in Australia rose 0.7% in the June quarter 2015, following a rise of 0.2% in the March quarter 2015, according to data released by the Australian Bureau of Statistics on Wednesday. The Reserve Bank of Australia targets an inflation rate of between 2% and 3%. The CPI rose 1.5% through the year to the June quarter 2015, following a rise of 1.3% through the year to the March quarter 2015.
Nikkei tumble on weak offshore lead, stronger yen
Japanese share market ended lower, snapping six sessions of winning streak, as profit booking triggered on following a selloff on US markets overnight and other regional bourses. 30 out of 33 TSE sectors ended in red, with shares of mining, banks, electric appliance, textile & apparels and machinery heavyweights being major losers. The Nikkei Stock Average retreated 248.30 points, or 1.19%, to end at 20593.67 points. The broader Topix index lost 1.11%, or 18.51 points, to close at 1655.37 points.
In Tokyo forex trade, the US dollar was at Y123.88 early on Wednesday, slightly up from Y123.86 in New York late on Tuesday, but lower than Y124.35 in Tokyo early on Tuesday.
Shares of exporters declined the most in the Tokyo market, with electronic-component makers leading losers after disappointing earnings results from the top U.S. player Apple and International Business Machine. Among Apple iPhone parts suppliers, Murata Manufacturing lost 4.6%, while Taiyo Yuden fell 3.2%, Foster Electric slipped 5.6%, and Kyocera ended down 3.3%. SoftBank, the largest reseller of Apple iPhones in Japan, fell 0.9%. Among top electronic-component makers, Japan Display Inc tanked 4.1% and Murata Manufacturing Co lost 4.6%, while Alps Electric Co sank 1.4% and Renesas Electronics Corp fell 2.7%. Toshiba Corp retreated 1.7% after reports that it had sold off its stake in Finnish elevator maker Kone Corp valued at close to $1 billion.
Financial shares were also a weak, with Mitsubishi UFJ Financial Group Inc down 2.4%, Sumitomo Mitsui Financial Group Inc down 1.9%, and Daiwa Securities Group Inc down 1.1%.
China market continues upswing for fifth day
Mainland China's stock market finished the session higher after swinging between gains and losses in tight range, marking a fifth consecutive session of winning streak. Sentiment continued to receive a boost from slew of as government rescue measures helped to restore some stability to trading. However, move on the upside checked amid concern that the nation's slowing economic growth will hurt earnings and state intervention in equities will delay market reforms. The benchmark Shanghai Composite Index advanced 8.37 points, or 0.21%, to finish at 4026.04 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 1.01%, or 22.88 points, to 2287.98 points. The benchmark gauge has rebounded more than 15% since July 8, following a 32% plunge that wiped out almost $4 trillion, as policy makers introduced a spate of measures to bolster equities.
International investors have soured on Chinese stocks as the nation's government took unprecedented steps to arrest a rout that erased almost $4 trillion of value. While the measures helped support share prices, critics say intervention undermines the country's pledge to increase the role of markets in the world's second-largest economy.
China's economic growth for 2016 to 2020 may slow to as low as 6%, as high growth driven by investment and exports is unsustainable, Ba Shusong, chief China economist for Hong Kong Exchanges & Clearing, wrote in an article in the Financial News, a publication of the People's Bank of China.
Shares related to technology and telecom sectors advanced the most among 10 industry groups, led by ZTE Corp, up 3.3%, after estimating a 43% gain in net profit for the first half.
Shares of shipping companies rallied after the Baltic Dry Index, a benchmark for commodity shipping rates, rose to the highest level since December. Cosco Shipping Co. jumped 6.6%.
Hong Kong market slips 1%
The Hong Kong stock market skidded on following the decline of European and the US equity markets overnight. The selloff pressure intensified after MNI's China Business Sentiment Indicator for July falls to a three-month low. Most of the index heavyweights declined, with telecom and brokerage stocks leading losers. The benchmark opened 134 points lower and saw its losses widen to 358 at one stage. The Hang Seng Index ended down 253.81 points, or 1%, to finish at 255282.62 points, off an intra-day high of 25401.79. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, retreated 137.27 points, or 1.16%, to 11734.27 points. Turnover increased to HK$81.7 billion from HK$80.8 billion on Tuesday.
The MNI China Business Sentiment Indicator, a gauge of current business sentiment, slipped back into contraction by falling 8.8% to 48.8 in July from 53.5 in June. “The sharp pullback in the MNI China Business Sentiment Indicator, after the more positive June reading, marks a disappointing start to Q3. The woes of the stock market over the past month may well have dented confidence, although at present it is difficult to gauge the impact. More positively, increased credit availability among our panel suggests that stimulus measures are starting to feed through more prominently which may help to underpin growth ahead” said Philip Uglow, Chief Economist of MNI Indicators.
Brokerage stocks declined the most in city market after reports that launch of Shenzhen-HK Connect may delay as the central government needs to focus its efforts on supporting A-share market. HKEx (00388) fell 2.7% to HK$222.2. CGS (06881) slipped 4% to HK$7.69. HTSC (06886) declined 3.5% to HK$18. CiticSec (06030) dropped 3.2% to HK$23.05.
Property prices in Beijing, Shanghai and Shenzhen hit fresh record highs, but the news flow failed to lend support to Chinese developers. CR Land (01109) retreated 4.2% to HK$23. COLI (000688) weakened by 1.3% to HK$26.55. But Evergrande (03333) edged up 0.4% to HK$5.07.
Telecom stocks declined after China's Ministry of Industry and Information Technology said charges for mobile data and fixed-line broadband may lower by an average of 30% by year-end. China Telecom (00728) dropped 1.7% to HK$4.58. China Mobile (00941) and China Unicom (00762) declined 1% to HK$101 and HK$11.46.
Indian Market logs strong gains
Indian stock market ended at highest level in more than three months after overseas funds extended their monthly purchases of local shares, as improved monsoon rains and falling crude prices boosted the odds of a rate cut by the central bank next month. Global funds have bought a net $1.1 billion of local shares this month. As per provisional closing, the S&P BSE Sensex was up 307.71 points or 1.09% at 28,489.85. The CNX Nifty was up 104.05 points or 1.22% at 8,633.50.
Barring the IT sector which ended down around 0.5%, all other sectors closed in green. Oil & gas and Banking were the gainers, which closed up around 2.4% and 1.4% respectively.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 1% to 8918.70. South Korea's KOSPI dropped 0.9% to 2064.73. New Zealand's NZX50 rose 0.9% to 5927.75. Singapore's Straits Times index lost 0.4% at 3359.17. Indonesia's Jakarta Composite index added 0.8% to 4906.69. Malaysia's KLCI fell 0.4% to 1729.53.
The US market ended lower on Tuesday after weak earnings from bellwethers IBM and United Technologies, while Apple Inc slumped in late trading after posting its results. IBM reported lower revenues for the 13th consecutive quarter and United Technologies cut its earnings forecasts because of weak growth in China and weak aviation parts sales. The Dow Jones Industrial Average tumbled 1%, while the broad-based SP500 dropped 0.43% and the tech-rich Nasdaq Composite Index fell 0.21%.
Bullion prices resumed downward trend today, as looming hike in U.S. interest rates has dented gold's appeal as an investment, encouraging more sellers in the market after Monday's 4% rout. Spot gold fell 0.7% to $1,093.71 an ounce by 0610 GMT, just shy of Monday's trough of $1,088.05 - its lowest since March 2010 - following a selloff exacerbated by huge volumes traded on the Shanghai Gold Exchange. The Shanghai rout happened after investors dumped more than $500 million worth of bullion in New York in early Asian trading hours.
Investors' unloaded bullion against a backdrop of improving risk sentiment after Greece agreed on a plan with its creditors that will keep it in the euro zone for now. Standard & Poor's on Tuesday upgraded Greece's sovereign credit rating by two notches and revised its outlook to stable from negative, citing euro zone countries' initial agreement to start negotiations with Athens on a third bailout.
Crude oil futures remained under pressure as investors worried about ample supply. U.S. crude was down 1.4% at $50.13, while Brent shed about 0.9% to $56.53.
Among Asian bourses
Australia market snaps six days rally
The Australian share market finished weaker for the first time in seven consecutive sessions, as some investors opted withdrawing profit off the table amid weak lead from Wall Street overnight and other Asian markets. Most of the ASX blue chip declined, with stocks of earnings and output reports took centre stage. The benchmark S&P/ASX 200 Index dropped 92.10 points, or 1.61%, to 5614.60 points, while the broader All Ordinaries Index lost 85 points, or 1.49%, to 5603.50 points.
Shares of material and resources stocks were major drag on the Sydney market. BHP Billiton sank 2% to A$26.27 after warning of new impairment charges of up to A$650 million. The miner, however, revised up its iron ore export guidance for the 2015 financial year and vowing to grow exports of the bulk commodity by 7% over the next 12 months. The miner forecasted to export 250 million tonnes from its Pilbara operations, including tonnes owned by joint venture partners, and went beyond that to ship 256 million tonnes. Fellow mining giant Rio Tinto also slipped 2.2% to A$52.18.
Shares in the South32 dropped 2.2% to A$1.78, well below their listing price of A$2.05, after announcing it will write down $US1.9 billion of its manganese and coal businesses after suspending capacity at its South African smelter.
Shares of Gold miners, which endured a horror day on Monday with A$1.5 billion wiped off the sector, extended retreat today after bullion prices resumed downward trend. Among heavyweight bullion miners, Newcrest Mining declined 1.4% to A$11.53 and Perseus Mining lost 4.2% to A$0.34.
Boral shares climbed 1.4% to A$6.45 on upbeat guidance for the fiscal year ended in June. Construction Materials Company expected net profit before significant items for 2014-15 to be about A$240 million to A$250 million.
The Consumer Price Index (CPI) in Australia rose 0.7% in the June quarter 2015, following a rise of 0.2% in the March quarter 2015, according to data released by the Australian Bureau of Statistics on Wednesday. The Reserve Bank of Australia targets an inflation rate of between 2% and 3%. The CPI rose 1.5% through the year to the June quarter 2015, following a rise of 1.3% through the year to the March quarter 2015.
Nikkei tumble on weak offshore lead, stronger yen
Japanese share market ended lower, snapping six sessions of winning streak, as profit booking triggered on following a selloff on US markets overnight and other regional bourses. 30 out of 33 TSE sectors ended in red, with shares of mining, banks, electric appliance, textile & apparels and machinery heavyweights being major losers. The Nikkei Stock Average retreated 248.30 points, or 1.19%, to end at 20593.67 points. The broader Topix index lost 1.11%, or 18.51 points, to close at 1655.37 points.
In Tokyo forex trade, the US dollar was at Y123.88 early on Wednesday, slightly up from Y123.86 in New York late on Tuesday, but lower than Y124.35 in Tokyo early on Tuesday.
Shares of exporters declined the most in the Tokyo market, with electronic-component makers leading losers after disappointing earnings results from the top U.S. player Apple and International Business Machine. Among Apple iPhone parts suppliers, Murata Manufacturing lost 4.6%, while Taiyo Yuden fell 3.2%, Foster Electric slipped 5.6%, and Kyocera ended down 3.3%. SoftBank, the largest reseller of Apple iPhones in Japan, fell 0.9%. Among top electronic-component makers, Japan Display Inc tanked 4.1% and Murata Manufacturing Co lost 4.6%, while Alps Electric Co sank 1.4% and Renesas Electronics Corp fell 2.7%. Toshiba Corp retreated 1.7% after reports that it had sold off its stake in Finnish elevator maker Kone Corp valued at close to $1 billion.
Financial shares were also a weak, with Mitsubishi UFJ Financial Group Inc down 2.4%, Sumitomo Mitsui Financial Group Inc down 1.9%, and Daiwa Securities Group Inc down 1.1%.
China market continues upswing for fifth day
Mainland China's stock market finished the session higher after swinging between gains and losses in tight range, marking a fifth consecutive session of winning streak. Sentiment continued to receive a boost from slew of as government rescue measures helped to restore some stability to trading. However, move on the upside checked amid concern that the nation's slowing economic growth will hurt earnings and state intervention in equities will delay market reforms. The benchmark Shanghai Composite Index advanced 8.37 points, or 0.21%, to finish at 4026.04 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 1.01%, or 22.88 points, to 2287.98 points. The benchmark gauge has rebounded more than 15% since July 8, following a 32% plunge that wiped out almost $4 trillion, as policy makers introduced a spate of measures to bolster equities.
International investors have soured on Chinese stocks as the nation's government took unprecedented steps to arrest a rout that erased almost $4 trillion of value. While the measures helped support share prices, critics say intervention undermines the country's pledge to increase the role of markets in the world's second-largest economy.
China's economic growth for 2016 to 2020 may slow to as low as 6%, as high growth driven by investment and exports is unsustainable, Ba Shusong, chief China economist for Hong Kong Exchanges & Clearing, wrote in an article in the Financial News, a publication of the People's Bank of China.
Shares related to technology and telecom sectors advanced the most among 10 industry groups, led by ZTE Corp, up 3.3%, after estimating a 43% gain in net profit for the first half.
Shares of shipping companies rallied after the Baltic Dry Index, a benchmark for commodity shipping rates, rose to the highest level since December. Cosco Shipping Co. jumped 6.6%.
Hong Kong market slips 1%
The Hong Kong stock market skidded on following the decline of European and the US equity markets overnight. The selloff pressure intensified after MNI's China Business Sentiment Indicator for July falls to a three-month low. Most of the index heavyweights declined, with telecom and brokerage stocks leading losers. The benchmark opened 134 points lower and saw its losses widen to 358 at one stage. The Hang Seng Index ended down 253.81 points, or 1%, to finish at 255282.62 points, off an intra-day high of 25401.79. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, retreated 137.27 points, or 1.16%, to 11734.27 points. Turnover increased to HK$81.7 billion from HK$80.8 billion on Tuesday.
The MNI China Business Sentiment Indicator, a gauge of current business sentiment, slipped back into contraction by falling 8.8% to 48.8 in July from 53.5 in June. “The sharp pullback in the MNI China Business Sentiment Indicator, after the more positive June reading, marks a disappointing start to Q3. The woes of the stock market over the past month may well have dented confidence, although at present it is difficult to gauge the impact. More positively, increased credit availability among our panel suggests that stimulus measures are starting to feed through more prominently which may help to underpin growth ahead” said Philip Uglow, Chief Economist of MNI Indicators.
Brokerage stocks declined the most in city market after reports that launch of Shenzhen-HK Connect may delay as the central government needs to focus its efforts on supporting A-share market. HKEx (00388) fell 2.7% to HK$222.2. CGS (06881) slipped 4% to HK$7.69. HTSC (06886) declined 3.5% to HK$18. CiticSec (06030) dropped 3.2% to HK$23.05.
Property prices in Beijing, Shanghai and Shenzhen hit fresh record highs, but the news flow failed to lend support to Chinese developers. CR Land (01109) retreated 4.2% to HK$23. COLI (000688) weakened by 1.3% to HK$26.55. But Evergrande (03333) edged up 0.4% to HK$5.07.
Telecom stocks declined after China's Ministry of Industry and Information Technology said charges for mobile data and fixed-line broadband may lower by an average of 30% by year-end. China Telecom (00728) dropped 1.7% to HK$4.58. China Mobile (00941) and China Unicom (00762) declined 1% to HK$101 and HK$11.46.
Indian Market logs strong gains
Indian stock market ended at highest level in more than three months after overseas funds extended their monthly purchases of local shares, as improved monsoon rains and falling crude prices boosted the odds of a rate cut by the central bank next month. Global funds have bought a net $1.1 billion of local shares this month. As per provisional closing, the S&P BSE Sensex was up 307.71 points or 1.09% at 28,489.85. The CNX Nifty was up 104.05 points or 1.22% at 8,633.50.
Barring the IT sector which ended down around 0.5%, all other sectors closed in green. Oil & gas and Banking were the gainers, which closed up around 2.4% and 1.4% respectively.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 1% to 8918.70. South Korea's KOSPI dropped 0.9% to 2064.73. New Zealand's NZX50 rose 0.9% to 5927.75. Singapore's Straits Times index lost 0.4% at 3359.17. Indonesia's Jakarta Composite index added 0.8% to 4906.69. Malaysia's KLCI fell 0.4% to 1729.53.
