Asia Pacific share market mostly higher on Thursday, 04 February 2016, as investors chased for recently battered resources stocks on following a positive lead from Wall Street and jump in crude oil price overnight.
Oil prices extended their rebound in Asia today, as investors took advantage of a drop in the US dollar after weaker-than-expected US service-sector data and comments from the US Federal Reserve suggesting a slower-than-expected monetary tightening plan. US benchmark West Texas Intermediate crude for delivery in March was up 36 cents, or 1.12%, at $32.64 and Brent crude for April was trading higher by 29 cents, or 0.83%, at $35.33. Crude oil prices rebounded sharply on Wednesday with the benchmark Brent crude surging by 7% to trade above $30 a barrel.
Traders brushed aside bearish data showing another increase in US commercial crude inventories. The US Department of Energy had said yesterday that commercial crude stockpiles in the world's top oil consumer soared by 7.8 million barrels in the week ending January 29. That was almost double the market expectations and took total crude inventories to 502.7 million, topping 500 million barrels for the first time on record, exacerbating market concerns over the global glut that has depressed prices for nearly two years.
Among Asian bourses
Australia Stocks enjoy relief rally
Australian share market rebounded as investors chased for bottom fishing across the board, led by energy and resource linked stocks after surprise bounce in the crude oil prices. At the close, the benchmark S&P/ASX 200 index spurted 103.60 points, or 2.12%, to 4980.40 points, while the broader All Ordinaries index surged 98.50 points, or 2%, to 5029.30 points.
Shares of energy and resources-linked companies spurted the most among ASX industry groups after global oil prices spiked 6 to 7% overnight after a US currency sell-off, which followed weaker-than-expected US service-sector data and comments from the US Federal Reserve suggesting a slower-than-expected monetary tightening plan. Global benchmark Brent crude was up 6.17% to $34.74 a barrel while iron ore continued its run of gains, rising 2.1% to $44 a tonne. Oil prices edged up further upon the start of trading in Asia, Brent futures rising to $35.36.
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Oil and gas producer Woodside Petroleum ascended 5.8% to A$27.14, and Santos strengthened 13.36% to A$3.14. AGL Energy lifted 2.16% to A$18.91 after it said it is quitting its gas exploration and production activities due to the collapse in oil and gas prices. In the resources sector, global miner BHP Billiton jumped 8.27% to A$15.45, Rio Tinto rose 8.91% to A$40.33, and Fortescue Metals put on 11.73% at A$1.81. BHP Billiton spinoff South32 was 14.21% higher at A$1.085 as it said it will slash 620 jobs and has flagged widespread job losses in Australia after revising down its commodity price forecasts.
Nikkei extends losses
Japan share market ended down, dragged down by export-related stocks after yen appreciated against the greenback on weaker-than-expected US service-sector data and comments from the US Federal Reserve suggesting a slower-than-expected monetary tightening plan. Most of Topix industry groups declined, with notable decliners comprised retailer, fishery, insurer, and drug maker shares. The 225-issue Nikkei Stock Average ended down 146.26 points, or 0.85%, at 17044.99. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 17.46 points, or 1.24%, lower at 1388.81.
Shares of export-related companies declined on yen appreciation against greenback and worries about China economic slowdown. The greenback tumbled to 117.81 yen from 120.01 yen the day before. A stronger yen hurts exporters' profitability and tends to knock demand for their shares. Panasonic dived 8.71% to 967.2 yen after the electronic maker cut its full-year revenue forecast, pointing to a slowdown in China and other emerging economies. Hitachi plunged 7.80% to 512.6 yen after the company cut its full-year net profit forecast by more than 20%, citing China's Chinese growth slowed and oil prices plummeted..
Toshiba rose 2.9% to 198.5 yen. The firm reported its latest earnings results and announced it expanded its full-year loss forecast to an eye-watering $6.0 billion following an embarrassing accounting scandal.
Sharp Corp jumped 16.78% to 160 yen after reports that the embattled firm's board is favouring accepting a $5 billion bailout from Taiwanese giant Hon Hai Precision, the parent of key Apple supplier Foxconn.
Resources stocks lead China market rally
Mainland China stock market ended higher, with resources related shares leading rally on the back of surprise rebound in crude oil prices and stronger official yuan midpoint rate fixing from the China's central bank. The Shanghai Composite Index ended up 1.53%, or 41.78 points, at 2781.02. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, grew 36.12 points, or 1.23%, to 2984.76.
China's central bank set its official yuan midpoint rate at the strongest level since January 6, after the dollar index fell to its lowest level in three months amid weaker-than-expected US service-sector data and comments from the US Federal Reserve suggesting a slower-than-expected monetary tightening plan. The PBOC set the daily fixing, which restricts onshore moves to a maximum 2% on either side, at 6.5419 a dollar, 0.16% stronger than the previous day's reference rate.
Shares of commodity producers rallied after global oil prices spiked 6 to 7% overnight. Global benchmark Brent crude was up 6.17% to $34.74 a barrel while iron ore continued its run of gains, rising 2.1% to $44 a tonne. Hainan Mining Co. rallied by the daily 10% limit, while Jiangxi Copper Co. jumped 5.8%. PetroChina added 0.6%, while Offshore Oil Engineering Co. and Sinopec Shanghai Petrochemical Co. increased more than 2%
Hong Kong Market follows positive global lead
The Hong Kong stock market ended higher, following a positive lead from Wall Street and jump in crude oil price overnight. Meanwhile, gain in Mainland A-share market also lifted risk sentiments. The benchmark Hang Seng Index has gained 191.50 points, or 1.01%, to 19183.09 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, added 116.09 points, or 1.48%, to 7974.40 points. Turnover reduced to HK$65.4 billion from HK$78.7 billion on Wednesday.
Shares of energy companies rallied after crude oil prices bounced 8% overnight, snapping a 2-day losing streak. CNOOC (00883) soared 6.2% to HK$7.7. Sinopec (00386) mounted 3.8% to HK$4.34. PetroChina (00857) shot up 5.3% to HK$4.61.
Dah Sing (00440) shot up 7.2% to HK$37.95 on talks that its insurance business is being bid by China Life (02628), which dipped 1.3% to HK$17.14. BEA (00023) gained 4.1% to HK$21.8 on news that a hedge fund proposed to acquire the bank at premium.
Property developers were higher on market expectation of slower pace of rate hike and China central bank easing in new down-payment requirements for first and second home owners. Swire (00019) added 3% to HK$74.95. SHKP (00016) rose 1.6% to HK$82.15.Henderson Land (00012) also ascended 1.3% to HK$40.05.
Sensex, Nifty snap 3-day losing streak
Stocks of metal and mining firms, oil exploration and production companies and index heavyweight Infosys led gains for key benchmark indices in what was a choppy trading session. The barometer index, the S&P BSE Sensex, rose 115.11 points or 0.48% to settle at 24,338.43. The Nifty rose 42.20 points or 0.57% to settle at 7,404. Gains in Asian stocks aided the upmove on the domestic bourses as the Sensex and the Nifty snapped a 3-day losing streak.
The market breadth indicating the overall health of the market was weak. On BSE, 1,623 shares declined and 1,030 shares rose. A total of 123 shares were unchanged. The BSE Mid-Cap index dropped 0.18%. The BSE Small-Cap index declined 0.75%. Both these indices underperformed the Sensex.
Shares of oil exploration and production firms gained after sharp rebound in crude oil prices. Shares of public sector oil marketing companies (PSU OMCs) dropped after a sharp rise in crude oil prices. Metal and mining stocks edged higher as copper prices rose in global commodities markets. Tata Steel edged higher in volatile trade ahead of the announcement of its third quarter results. Pharma stocks edged lower on media reports that the US government has made it mandatory for active pharmaceutical ingredients (APIs) to be manufactured locally.
ABB India surged after reporting robust Q4 December 2015 results. Bajaj Auto edged lower in volatile trade after announcing third quarter results.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 added 0.1% to 6137.71. South Korea's KOPSI rose 1.4% to 1916.26. Malaysia's KLCI gained 1.44% to 1656.77. Singapore's Straits Times index added 0.3% at 2558.49. Indonesia's Jakarta Composite index rose 1.5% to 4656.77.
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