Asia Pacific share market declined on Thursday, 09 April 2015, as investors elected to withdraw some profit off the table after the mostly dovish minutes from the last Federal Reserve meeting.
Minutes of the Federal Reserve's last meeting showed the Fed was still on course to hike interest rates this year. Fed officials acknowledged risks from overseas and a weak start to the year at their March meeting but remained confident enough in the strength of the recovery to continue laying the groundwork for an interest rate hike later this year, the minutes showed.
The FOMC minutes for the March meeting revealed policymakers were split in the timing of rate hike. As mentioned in the minutes, 'several' members were anticipating raising rates in June, while a 'couple' preferred to wait until 2016. On economic developments, the central bank attributed the weaker than expected growth in 1Q15 to transitory factors, including adverse weather and the West Coast port strike. They also cited factors such as lower energy sector activity and reduced state and local government revenues in places where energy sector activity plays an important role. The members revised down the medium-term growth outlook, with stronger dollar the key factor. Despite the downward revision, the FOMC judged that the progress made, particularly in lowering unemployment, should warrant the removal of forward policy rate guidance indicating that 'the Committee would be patient in beginning to normalize the stance of monetary policy'.
Among Asian bourses
Australia market dives 0.5%; Miners lead retreat
The Australian share market closed the session with losses, as investors cashed in profit following recent rally, with shares of big miners being major losers after China's Metallurgical Industry Planning Association forecast weaker demand for iron ore. The benchmark S&P/ASX 200 Index declined 28.40 points, or 0.48%, to 5932.30, while the broader All Ordinaries Index fell 26.80 points, or 0.45%, to 5901.50. Market turnover was healthy, with 1.55 billion shares changing hands worth of A$4.01 billion.
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Shares of materials and resources companies were major losers on the Australia Stock Exchange, amid fears of further falls in iron ore after China's Metallurgical Industry Planning Association forecast weaker demand for iron ore. BHP Billiton was down 1.7% to A$30.225 and Rio Tinto sank 0.8% to A$56.57. Fortescue Metals Group dropped 4.1% to A$1.86.
Energy players were also traded lower, after oil suffered a sharp fall overnight, with Woodside Petroleum falling 2.5% to A$34.185, while Santos and Oil Search both dived 0.4% to A$7.38 and A$7.61, respectively.
Financial stocks extended losses on disappointment after the Reserve Bank of Australia's (RBA) decision to hold borrowing costs steady at a record low of 2.25% on Tuesday. Commonwealth Bank fell 0.2% to A$93.79, ANZ Banking Group 0.5% to A$36.62, Westpac Banking Corp rose 0.5% to A$39.58 and National Australia Bank 0.3% to A$39.32.
Nikkei touches new 15-years high
Japanese share market finished the session at another 15-year high, on the back of persistent buying in exporter shares after yen softened above the 120 yen level against the US dollar. The benchmark Nikkei 225 index inclined 147.91 points, or 0.75%, to finish at 19937.72, its highest level since June 2000, while the broader Topix index of all first-section shares advanced 5.72 points, or 0.4%, to 1594.19.
Nissan Motor soared 4.6% to 1264 yen after brokerage houses increased their target price for the company. SMBC Nikko Securities increased its 12-month price target for the auto maker by 15% to 1,500 yen and raised the stock to outperform from neutral, citing growing sales and profit margins, as well as efforts to control costs and revitalize its mix of car models.
Fujitec Co jumped 3.5% to 1222 yen after saying it purchased 7.6 billion yen of its own shares. The company last initiated a buyback in February for 6.9 billion yen.
FamilyMart Co rose 5.2% to 5490 yen after convenience-store operator reported a 40.4 billion yen operating profit, in line with guidance, and plans to raise operating profits by a further 16% this year.
Hulic Co dropped 2% to 1395 yen after saying it will raise as much as 82.3 billion yen in a public share sale to repay debt as well as acquire and refurbish property.
GungHo Online Entertainment shed 4.2% to 437 yen after reports that the game developer likely saw its group operating profit for the January-March quarter fall 30% from a year earlier, hurt by slowing revenue as its mainstay "Puzzle & Dragons" smartphone game reaches a saturation point.
Shanghai Composite drops 0.93% on profit booking
Mainland China equity market closed lower, amid profit booking following sharp recent rally, with consumer and commodity related stocks leading decline ahead of tomorrow's inflation data. The Shanghai Composite Index declined 37.28 points, or 0.93% to 3957.53 at the close, after briefly surpassing a 4000 points level, its highest level since March 2008. The CSI300 index, the largest listed companies in Shanghai and Shenzhen, sank 33.66 points, or 0.78%, to 4262.14.
Investors elected to book profit after the benchmark Shanghai Composite Index yesterday briefly surpassed 4000 points level, a key psychological resistance level, for the first time since early 2008, as investors bet authorities will increase monetary stimulus to bolster economic growth. The index has doubled since January 2014 as traders borrowed a record amount of money to buy shares, new investors opened stock accounts at an unprecedented pace and government officials endorsed the rally.
China's central bank has cut interest rates twice since November and analysts predict authorities will ease policy further to keep economic growth above their 7% target. The nation's individual investors, who account for about 80% of equity trading, may view the 4,000 milestone as a signal to boost holdings, according to Shenwan Hongyuan Group Co., the nation's second-largest brokerage by market value.
Total of nine out of ten SSE industry groups declined, with telecommunication services issue leading the retreat, down 2%, followed by consumer discretionary (down 1.6%), utilities (down 1.6%), materials (down 1.3%), energy (down 1.2%), healthcare (down 0.7%), financial (down 0.7%), industrials (down 0.6%), and consumer staples (down 0.4%).
B>Hang Seng scales fresh seven-year high
Hong Kong stock market finished the session at fresh seven-year high in heavy turnover, supported by Chinese investors who used up the entire 10.5 billion yuan daily investment quota for second straight session. The benchmark index opened 676 points higher and soared nearly 1,700 points in 30 minutes. But it pared most of its gains after the Shanghai market reversed its path on profit-taking. The Hang Seng Index ended up 707.53 points or 2.7% to 26,944.39, off an intra-day high of 27,922.69 and day low of 26,732.23. The benchmark index closed at a highest level since May 2008. Turnover increased to HK$291.53 billion from HK$250 billion on Wednesday.
The sharp rally in the city's bourse continued supported by strong buying from Chinese investors who used up the entire 10.5 billion yuan daily investment quota in the Shanghai-Hong Kong stock connect for the second straight session. The daily quota allows mainland traders to buy Hong Kong stocks under the Shanghai-Hong Kong stock connect launched last November.
Brokerage houses were among the top performers on the Hang Seng index, with China Galaxy Securities rocketed 13%, while Haitong Securities and Citic Securities climbed 7.8 and 2.5%, respectively.
Power producers were up after the China State Council decided to cut coal-fired IPPs' on-grid tariff and commercial & industrial (C/I) users' electricity tariff. China Longyuan (00906) surged 6% to HK$9.87. Huaneng Power (00902) put on 3.6% to HK$9.97.
Shares of Hong Kong Exchanges & Clearing rose 9% to HK$239.6 after hitting an intra-day record high of HK$250 after the bourse reported record trading volume on Wednesday.
Sensex, Nifty hit three-week high
Indian benchmark indices edged higher in what was a volatile trading session as sentiment was boosted after Global rating agency, Moody's Investors Service today, 9 April 2015, changed India's outlook to positive from stable, saying there was an increasing probability that actions by policy makers will enhance the country's economic strength and, in turn, the sovereign's financial strength over coming years. The Sensex and the 50-unit CNX Nifty, both, hit highest level in three weeks in late trade. Rally gathered steam in late trade with indices hitting fresh intraday high. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex was provisionally up 156.30 points or 0.54% at 28,864.05.
Index heavyweight Reliance Industries (RIL) extended recent gains after the company's KG-D6 partner Niko Resources had on 6 April 2015 said that it has received an independent resources evaluation report for the MJ Discovery in the D6 block in India. Bank stocks gained after rating agency Moody's upgraded India's sovereign ratings outlook.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 479.18 crore yesterday, 8 April 2015, as per provisional data. Domestic institutional investors (DIIs) bought shares worth a net Rs 382.54 crore yesterday, 8 April 2015, as per provisional data.
Elsewhere in the Asia Pacific region: South Korea KOSPI fell 0.02% to 2058.87. Taiwan's Taiex sank 0.04% to 9568.04. New Zealand NZX50 was down 0.21% to 5847.17. Singapore's Straits Times index fell 0.01% at 3460.30. Malaysia's KLCI slipped 0.05% to 1849.39. Indonesia's Jakarta Composite index grew 0.26% to 5500.90.
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