Asia Pacific share market dropped on Friday, 01 August 2014, in
investors booked profit on recent rally on tracking a big selloff on
offshore markets overnight. But China's strong official PMI offset part
of the impact from weaker overseas market.
The regional benchmark indices opened lower on following falls on US and
European markets overnight. The weak eurozone data, the Argentine debt
default, weakness in the Portuguese banking system, the impact of
sanctions against Russia, and disappointing US corporate earnings blamed
for the selloff. Overnight, the Dow Jones Industrial Average tumbled
1.88%, Frankfurt's main DAX index dove 1.94%, Paris' CAC 40 shed 1.53%
and London's benchmark FTSE 100 index fell 0.64%.
But drop in the Asian bourses were limited on the back of upbeat data on
Chinese manufacturing. Monthly surveys of manufacturing in China
signaled that the world's second biggest economy perked up further in
July thanks to recent mini-stimulus measures. An official purchasing
managers' index rose to its highest in 27 months while a similar factory
report by HSBC showed the strongest rate of improvement in a year and a
half.
China's official Purchasing Managers' Index rose to 51.7 last month from
51.0 in June, making it the highest reading this year. The final
HSBC/Markit PMI also released on Friday, indicating the private sector
PMI fell slightly to 51.7 in July, from 52 in June. The official PMI
gives a broader view of the manufacturing sector as it includes the big
state-owned firms.
Among Asian bourses
Nikkei declines 0.63%
Japanese share market declined for second consecutive day, as profit
booking occurred across the board on tracking a big selloff on offshore
markets overnight. But losses were limited amid optimistic reports on
China's economy and yen weakness against dollar. The benchmark Nikkei
225 index dropped 97.66 points lower to close at 15523.11, while the
Topix index fell 8.12 points to 1281.30.
Yahoo Japan Corp. tumbled 6.6% to 442 yen after the Internet portal
posted flat operating profit. The company reported operating profit of
48.8 billion yen in the first quarter, little changed from a year
earlier. Goldman Sachs Group Inc. reduced its share-price target on the
stock to 630 yen from 650 yen.
NTN Corp tumbled 7.6% 463 yen, after reporting first-quarter earnings.
The company maintained its full-year forecast even as profit quadrupled.
SoftBank Corp. dropped 1.3% to 7,477 yen amid concern its Sprint Corp.
unit faces competition to acquire T-Mobile US Inc. France's mobile-phone
carrier Iliad SA made a bid for a controlling stake in T-Mobile after
SoftBank's owner Masayoshi Son made a case that regulators should
consider letting Sprint and T-Mobile US combine.
Sony Corp. gained to 1,855 yen after posting a surprise quarterly profit
as the PlayStation 4 topped sales for game consoles. Net income rose to
26.8 billion yen in the first quarter as the PlayStation 4 topped sales
for game consoles and “The Amazing Spider-Man” rejuvenated box-office
receipts for its Hollywood studios.
Auto-parts maker NGK Insulators surged 11% to 2,750 yen after raising
its full-year profit forecast. The company raised its full-year profit
forecast by 15% to 39 billion yen.
Australia stocks tumble 1.4% from six-year peaks
Australian stock market declined, breaking a three-day winning streak,
amidst profit taking across the board on tracking a big selloff on
offshore markets overnight and on caution before official start of
earnings season. The benchmark S&P/ASX 200 Index dropped 76.50
points, or 1.36% to 5556.40, while the broader All Ordinaries Index sank
75.50 points, or 1.34%, to 5547.60. The benchmark S&P/ASX 200 Index
and the broader All Ordinaries Index each ended the week 0.5% lower.
The financial stocks declined, with big 4 lenders being the biggest
loser. Commonwealth Bank of Australia fell 1.1% to A$82.82, Westpac
Banking Corp 1.6% to A$34.05, and ANZ Banking Group 1.2% to A$33.56.
National Australia Bank fell 1.1% to A$34.93 after announcing a shake-up
to its senior management team as Andrew Thorburn took over as chief
executive.
Shares of material & resources companies declined on profit booking,
as gold, zinc and a number of other metals lost ground, with Resources
giant BHP Billiton falling 0.7% to A$38.41. Fortescue Metals Group
dropped 4.9% to A$4.68. Rio Tinto lost 1.5% to $65.40.
Woodside Petroleum was down 1.4% to A$41.92 after shareholders have
rejected a proposed $US2.68 billion buyback of shares from Royal Dutch
Shell even after chairman Michael Chaney poured cold water on hopes for
an equal access share buyback should the resolution be defeated.
The Australian Industry Group's performance of manufacturing index (PMI)
for July showed expansion for the first time in eight months. helped by
increased activity in the food, beverages and tobacco sub sector. The
Australian Industry Group's (Ai Group) Performance of Manufacturing
Index (PMI) rose 1.7 points to 50.7 in July. It was the first time since
October the index was above 50, indicating an increase in activity.
The Reserve Bank of Australia released the index of commodity prices for
July on Friday, showing that the index declined by 0.9% (on a monthly
average basis) in SDR terms, after declining by 2.2% in June (revised).
The largest contributors to the decline in July were falls in the prices
of iron ore, oil and wheat. The base metals subindex rose in the month
while the rural commodities subindex declined. In Australian dollar
terms, the index declined by 1.1% in July.
Shanghai index falls 0.74% from 8-month peaks
Headline shares of the Mainland China market declined, dragging the
benchmark Shanghai Composite lower by 16.26 points to close at 2185.30.
The profit booking triggered in last hour of trade after the benchmark
index surged to the highest level since December 2013 early today. But
drop was limited on the back of upbeat data on Chinese manufacturing.
Brokerage shares slumped on profit taking. Sinolink Securities slid
3.7%. Citic Securities Co. lost 2.5%. Haitong Securities Co. retreated
2.3%.
Gold producers declined as the precious metal headed for a third weekly
drop. The metal declined 3.4% in July to post the biggest monthly loss
this year. Zijin Mining slid 3.3%.
Health-care stocks climbed, with Guangzhou Baiyunshan Pharmaceutical
jumping 7.4% after saying it will start producing Viagra-like products
once it wins regulatory approval.
Shijiangzhuang Yiling Pharmaceutical
Co. advanced 1.4%. Huadong Medicine Co. added 4.3%.
Hang Seng falls 0.91% from 45-month highs
Hong Kong share market closed down, snapping eight sessions winning
streak, as a strong sell-off in global stocks overnight dented
sentiment. But China's strong official PMI offset part of the impact
from weaker overseas market. The benchmark Hang Seng Index declined
224.42 points to close at 24532.43. Turnover decreased to HK$79.9
billion from yesterday's HK$84 billion.
Shares of realty companies declined on profit booking. Cheung Kong
(00001) slid 4.7% to HK$143.6, making itself the biggest blue-chip
loser, after its first-half profit excluding property revaluation and
one-time gains missed analyst estimates. COLI (00688) fell 2.3% to
HK$23.25 after it reported an 18% growth in interim earnings. CR Land
(01109) softened nearly 1% to HK$18.04. China Overseas Grand tumbled 7%
to HK$5.85 after Citigroup cuts its rating to sell from neutral and
Nomura Holdings Inc. lowered it to reduce from neutral.
Casino stocks dropped after Macau said gross gaming revenues in July
reduced 3.6%. Galaxy Ent (00027) and Sands China (01928) slipped 2% to
HK$64.4 and HK$56.45.
Utilities stocks were in spotlight after roadmap for big five power
producers emerged. Huadian Power (01071) put on 3% to HK$4.94. Huaneng
Power (00902) added 2.7% to HK$8.9. CR Power (00836) nudged up 0.2% to
HK$21.8.
Sensex, Nifty hit two-week low
Indian stock market extended losses and hit fresh intraday low in
late-afternoon trade after a narrow movement in negative zone in early
afternoon trade. The barometer index, the S&P BSE Sensex, and the
50-unit CNX Nifty, both, hit two-week low. At 14:20 IST, the S&P BSE
Sensex was down 256.63 points or 0.99% to 25,638.34. The CNX Nifty was
down 73.40 points or 0.95% to 7,647.90.
Capital goods stocks declined. But, Bharat Heavy Electricals (Bhel)
edged higher after the company said that it has commissioned another
hydro generating unit of 68 megawatts (MW) at Rampur Hydro Electric
Project (HEP) in Himachal Pradesh.
HCL Technologies extended Thursday's losses triggered the company
reporting a sequential fall in EBITDA in Q4 March 2014 over Q3 June
2014.
Elsewhere in the Asia Pacific region-- South Korea's KOSPI index
fell 0.15% to 2073.10. Taiwan's Taiex index dropped 0.53% to 9266.51.
New Zealand's NZX50 fell 1.12% to 5109.93. Singapore's Straits Times
index fell 0.88% to 3344.42. Malaysia's KLSE Composite was down 0.43%
to 1863.34.
