Turnover across the regional bourses were relatively thin, as global investors holding their breath on the side-line on caution ahead of a keenly awaited rates announcement from both the ECB and the Bank of England tonight. The BoE is expected to leave rates unchanged but the ECB announcement may prove an important market catalyst.
President Mario Draghi has made very clear the ECB will take some action to stimulate the eurozone economy, but the implication for global markets will depend on how big and broad the stimulus is. If the ECB fires both barrels in its arsenal and uses broader measures, in addition to cutting interest rates, then that could weaken the euro and create extra liquidity very quickly.
Among Asian bourses- Disappointing trade balance data weigh on Australia shares
Australian share market finished lower for third consecutive session, as risk aversion selloff after bigger than expected trade deficit in April and on caution before the European Central Bank announcement on policy later in the global trading day. Losses from the big four banks and consumer staples stocks stemmed the gains made in the materials sector. The benchmark S&P/ASX200 and the broader All Ordinaries each declined marginally more than 0.1% to 5436.90 and 5419.70, respectively.
The Australian Bureau of Statistics said on Thursday that the country posted a seasonally adjusted trade deficit of A$122 million in April, compared with a revised surplus of A$902 million in March, as capital- and consumer-goods imports rose strongly. The data showed exports fell 1% from March, while imports overall rose by 2%.
Financial stocks closed down, with the major banks leading decline. Commonwealth Bank of Australia dropped 0.3% to A$80.95, Westpac Banking Corp 0.4% to A$34.20, National Australia Bank 0.2% to A$33.23 and ANZ Banking Group 0.5% to A$33.23.
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Shares of material and resource companies rebounded as bargain buying resumed on tracking gain in iron or prices. The iron ore price rose 2.2% to close at US$94.60 a dry tonne on Wednesday. Resources giant BHP Billiton advanced 0.1% to A$36.20 while main rival Rio Tinto added 0.4% to A$59.65. Fortescue Metals Group jumped 4.3% to A$4.65.
Graincorp (GNC) announced a restructure which will see it revamp the way it stores and transports grain. The revamp could cost A$200 million and see up to 80 jobs lost. GNC shares fell by 0.5% to A$8.45.
Lynas Corp (LYC) fell 6.1% to 15.5c as the rare earths miner announced CEO Eric Noyrez was leaving the company after 14 months in the top job. Former Commander Communications boss Amanda Lacaze has taken over the top job.
Japanese market rises to fresh 2-month high
Japanese share market finished the session marginally higher after moving zigzag between boundary line on Thursday, 05 June 2014, marking a fourth straight gain. The market got a lift from halt in yen appreciation and building on Wednesday's 2-month closing high. But, profit-taking holding back further gains after the previous day saw the market post its best finish in two months and as the most recent survey of activity in the Chinese services sector disappointed. The benchmark index edged up 11.41 points to 15079.37, a two-month high, while the Topix index of all first-section shares slipped 1.20 points to 1232.75.
Dai-ichi Life Insurance said on Wednesday it would buy U.S.-based Protective Life for $5.7 billion in a record deal, the latest overseas takeover by a Japanese firm to counter a declining market at home. The company, Japan's No. 2 insurer, said that it would pay $70 per share for the American firm and issue up to 250 billion yen ($2.4 billion) in new stock to help finance the deal. The price is a 34% premium on Protective Life shares when they closed on Friday in New York, before reports of the deal emerged. Shares price of Dai-ichi Life Insurance closed 0.1% higher at 1500 yen.
Chinese shares jump on bargain buying
Mainland China share market advanced today, registering first gain in five consecutive sessions, as investors chased for bottom fishing, with shares in materials, financials, consumer discretionary and consumer staple sectors leading gains. Market gains were, however, limited as investor enthusiasm for equities were waning amid a slowdown in the nation's economic growth. The benchmark Shanghai Composite rose 0.79% to finish at 2040.88, on turnover of 56.37 billion yuan.
China's economic growth expansion slowed to 7.4% in the first quarter from a year earlier, compared with 7.7% in the previous period. The world's second-largest economy is projected to grow 7.3% this year, which would be the weakest pace since 1990.
Shares of consumer goods manufacturers advanced on bargain hunting following steep losses in recent sessions. Kweichow Moutai, the nation's biggest maker of baijiu liquor, climbed 2.4%, while Wuliangye Yibin Co., the second largest, advanced 1.9%.
Shares of materials and resources also ended up. Baotou Rare-Earth, China's biggest producer of the metal, added 3.1% while China Minmetals gained 1.6%. Rising Nonferrous Metals Share Co. advanced 2%.
Datong Coal dropped 0.9%. First-half net income for coal producers may fall more than 50% from a year earlier on declining coal prices, Guopeng Zu, an analyst at Citic Securities wrote in a report.
The United States slapped new import duties on solar panels and other related products from China late Tuesday after the commerce department ruled they were produced using Chinese government subsidies. In a preliminary determination, the U.S. commerce department imposed duties of 35.21% on imports of panels and other products made by Wuxi Suntech Power and five other affiliated companies, 18.56% on imports of Trina Solar and 26.89% on imports from other Chinese producers. China retaliated against the original U.S. duties by introducing anti-dumping and anti-subsidy duties on imports of U.S. polysilicon, the key raw material in solar cells, and has accused the United States of trying to curb Chinese imports.
China has begun levying an anti-dumping tax on a chemical imported from the European Union and the United States, the Commerce Ministry said Tuesday. The ministry said China would impose duties of 27.6% on European exports of perchlorethylene, a chemical used in insect repellent and refrigerants, according to a statement on its website. A tax of 71.8% will be imposed on exports of the chemical by U.S. companies, including Dow Chemical Co. and Occidental Chemical Corp., it said. The duties took effect from May 31 and will run for five years.
Hong Kong shares fall
Hong Kong share market finished weaker in narrow and quiet trade, as risk aversion selloff after worse than expected survey data for activity in the Chinese services sector and on caution before the European Central Bank announcement on policy later in the global trading day. The benchmark Hang Seng Index closed 42.05 points lower at 23109.66. Market turnover was HK$48.61 billion vs HK$48.16 billion on yesterday.
The China services Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics slid to 50.7 in May from 51.4 in April, according to a report released today. Hong Kong developers were higher after JP Morgan's upbeat forecast on the industry. Henderson Land (00012) put on 3.39% to HK$51.9. Sino Land (00083) soared 4.5% to HK$12.54. SHKP (00016) and ew World Development Co (00017) rose 1.51% and 1.56% to HK$107.7 and HK$9.1.
Evergrande Real Estate Group gained 2.78% to HK$3.7 after Alibaba Group Holding buys a 50% stake in Guangzhou Evergrande Football Club at 1.2 billion yuan ($192 million).
China Rare Earth Holdings jumped 9.5% toHK$1.04 after Reuters reported the country will soon end limits on rare earth exports.
Shougang Fushan (639) dropped 4.1% to HK$1.86. The company said it expects a loss for the January to April period on falling sales volume and declining prices.
Sensex revisits 25000-mark
Key benchmark indices closed higher after a news agency quoted an unnamed official of the India Meteorological Department as saying that conditions have turned favorable for the onset of monsoon in India in about 24 hours. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit highest level in more than a week. The barometer index, the S&P BSE Sensex, moved above the psychological 25,000 level.
The benchmark BSE Sensex provisionally closed 0.86 percent higher at 25,019.51, surpassing the earlier record set on Tuesday. The broader Nifty gained 0.97 percent to 7,474.10, breaching Tuesday's record.
PSU OMCs extended gains as crude oil prices declined. HPCL (up 5.16%) and Indian Oil Corporation (IOCL) (up 3.92%) gained. BPCL rose 6.81% to Rs 616 after hitting record high of Rs 626.80 in intraday trade.
Steel shares edged higher. Jindal Steel & Power was up 3.02% at Rs 338.10. The stock hit 52-week high of Rs 341.90 in intraday trade. JSW Steel was up 1.34% at Rs 1,290.80. The stock hit 52-week high of Rs 1,304.65 in intraday trade.
Shares of Tata Steel and Steel Authority of India extended recent gains triggered by reports the two steel makers have restarted most of their iron ore mines in Odisha state after getting new permits from the Odisha state government. Iron ore is a key input in steel making. Steel Authority of India (Sail) was up 6.93% to Rs 107.20. Tata Steel was up 3.96% to Rs 557.85.
Shares of other metal companies extended recent gains. Hindustan Copper (up 2.84%), National Aluminium Company (up 0.8%), Hindustan Zinc (up 0.09%) and Hindalco Industries (up 5.98%), edged higher. Sesa Sterlite rose 6.6% to Rs 314.75 after hitting 52-week high of Rs 315.90 in intraday trade.
NMDC rose 1.6% to Rs 193.60 after hitting 52-week high of Rs 194.50 in intraday trade. NMDC has reportedly raised ore prices by up to 9% in June, the first increase in five months as supply has been cut by a temporary ban on some mines in Odisha state. Given the expected rise in demand for NMDC's ore, the company has raised prices for iron ore fines by 9% to Rs 3,160 per tonne and by 7% to Rs 4,600 for lumps, reports suggest. Coal India gained 0.21% to Rs 391
Elsewhere in the Asia Pacific region, Taiwan's Taiex index rose 0.23%. South Korea's KOSPI index was down 0.65%. New Zealand's NZX50 rose 0.14 point. Singapore's Straits Times index fell 0.02%. Indonesia's Jakarta Composite Index added 0.06%. Malaysia's KLSE Composite added 0.2%.
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