Headline shares on the Asia Pacific market ended volatile session largely in red on Monday, May 13, 2013, as wave of profit taking dominated broadly following recent gains and weaker than expected China industrial production data. Meanwhile cautious ahead of the US Commerce Department's report on retail sales for April later in the global day also fueled selloff.
Official data showed that industrial production in China rose 9.3% in April, below expectations for a 9.5% increase and following an 8.9% rise the previous month. Separate data showed that retail sales in China increased by 12.8% in April, in line with expectations. China's fixed asset investment rose 20.6% from a year earlier to 9131.9 billion yuan (US$1472.9 billion) in the January-April period, slowing from a 20.9% growth in the first quarter.
In the Asia Pacific market, Indian share market was worst performer in the region, with the Sensex declined 2.14% to end at 19,691.67 as traders booked profits across the board after the index rallied past the 20,100 mark and after the latest data showed that the country's trade deficit widened in April 2013. Weakness in European and Asian stocks also weighed on sentiment.
Stocks in Hong Kong and Shanghai were also ended notable lower after China's industrial production rose 9.3% in April from the year-ago month and retail sales during the month improved 12.8%, with growth in both data points accelerating from the rate seen in March. Hong Kong's Hang Seng Index gave up 1.4%, while the Shanghai Composite shed 0.2%.
On the positive side, Japanese stocks rallied to their highest level in more than five years today, sending the Nikkei Stock Average 174.67 points, or 1.2%, higher at 14,782.21, as appetite for risk assets underpinned by an improved profit outlook and further yen weakness after the Group of Seven major economies refrained from criticizing Tokyo's easing policies. Meanwhile solid business results from exporters such as Nissan Motor and TDK, as well as fund rotation into financials also bolstered buying.
The yen slid to a fresh 4-1/2-year low against the dollar of 102.15 yen in Asia on Monday, having earlier hit its highest point since January 2010 against the euro at 132.385. Yen's slid to 132.385 against the euro. Yen's weakness resumed after Japan avoided criticism from its peers for pursuing bold reflationary policies which have resulted in a steady decline in the Japanese currency, which improves earnings prospects for exporters and underpins the export-reliant Japanese economy. Group of Seven finance officials agreed on Saturday to redouble efforts to deal with failing banks and gave a green light to Japan's drive to galvanize its economy. Having urged Tokyo for years to do something to revive its economy, other world powers are not in a position to complain now that it is doing so. Also, central banks such as the Federal Reserve and Bank of England have printed money in the way the Bank of Japan is now.
The Australian stock market closed tad higher after moving in narrow range, as investors hesitant to opt for risk assets ahead of federal budget tomorrow and the US Commerce Department's report on retail sales for April. The All Ordinaries Index added 3.70 points by close to 5194.8. The benchmark S&P/ASX200 index ended higher by 4.20 points to 5210.30.
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Elsewhere, Indonesia's JKSE fell 1%, Singapore's STI shed 0.4%, and Taiwan's Taiex shed 0.4%, while Malaysia's KLSE Composite rose 0.9%, New Zealand's NZX50 added 0.4%, and South Korea's Kospi rose 0.2%.
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