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Asia Pacific Market: Shares commence 2014 with mixed note

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Capital Market
Last Updated : Jan 07 2014 | 11:55 PM IST
Asia Pacific shares kicked off first trading session of the Calendar Year 2014 with mixed note. The MSCI Asia Pacific excluding Japan Index slipped 0.6%, with share gauges of South Korea and Thailand among the region's top losers, while Indonesia was region's top gainer.

In South Korea, shares in the Seoul market tumbled, dragging the benchmark Taiex 2.2% down to 1967.19, amid concerns strengthening domestic currency reduced exporters competitiveness in the international market. Also contributing to the sell-off was news that both carmakers forecasted their weakest annual sales growth in over ten years for 2014.

Seoul index heavyweight Samsung Electronics tumbled 5% on the back of a disappointing earnings outlook.

The South Korean currency won hit a five year high against the dollar after Korea's HSBC PMI, which was also released on Thursday, rose in December to 50.8 from 50.4 in November. The dollar was last trading at KRW1049.49.

In Thailand, shares in Thailand market skidded to their lowest level in almost 16 months on concerns of a delay in February elections after anti-government protesters have planned a mass rally to shutdown Bangkok from Jan. 13, calling for national reform to precede the election while security agencies sought an enforcement of the Emergency Decree to deal with the protest.

The key SET index was down 2.8% at 1,262.56, slipping to 1,257.06 at one point, the lowest since Sept. 13, 2012, amid sell-offs in large caps such as shares of Siam Commercial Bank and Advanced Info Service

Thailand's baht touched 32.958 per dollar, the weakest level since March 1, 2010, after losing 6.9% last year in the biggest drop since 2000.

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In Indonesia, shares in the local market climbed up sharply, sending the benchmark Jakarta Composite index 1.2% higher at 4327.27, the highest in nearly one month, on first trading day of the year. The gain in the Indonesian market came after official data showed nation's posted trade surplus for two consecutive months in November and manufacturing conditions improved for the fourth successive month in December.

Indonesia's trade posted a surplus for two consecutive months in November, bolstering indication that the country's current account deficit is narrowing. It was also the largest monthly trade surplus since March 2012. The country posted a $776.8 million trade surplus in November, compared to a revised $24 million surplus in October, the Central Statistics Agency (BPS) reported on Thursday.

Exports fell 2.4% to $15.9 billion from a year earlier. Imports fell 11% to $15.15 billion from the same period last year, as imports of raw materials and machinery declined. A weaker rupiah has raised the costs of goods shipped from abroad. For 2013, the rupiah lost 27% against the US dollar.

The seasonally adjusted HSBC Indonesia Purchasing Managers' Index rose to 50.9 in December from 50.3 in the previous month, Markit Economics reported. A renewed growth of output and increased new order levels underpinned manufacturing conditions.

In Australia, the Australian shares got off to a positive start for the New Year, with the benchmark S&P/ASX 200 Index closing 0.3% higher at 5367.90, following a 15% annual gain in 2013. Nearly every sector moved higher today with the exception of the health care and energy sectors which were slightly lower.

Metals and mining was the best-performing sector, with BHP Billiton adding 0.6% to A$38320 and Rio Tinto gaining 0.8% to A$68.71 on reports that operations at key ports in the Pilbara region, crucial to the major miners, were returning to normal after the passing of Cyclone Christine. Fortescue Metals jumped 1.9% to A$5.93. Australia's biggest goldminer, Newcrest Mining, jumped 8.3% to A$8.45

Property stocks rose after home prices across major cities rose nearly 10% in 2013, their best performance in four years, according to RP Data-Rismark. Stockland, Westfield and Mirvac Group rallied over 1% each.

Many of the major financial shares were mixed, with Commonwealth Bank up 0.1% to $77.84, while National Australia Bank was flat at A$34.83 and Australia & New Zealand Banking Group falling 0.03% to A$32.22. Westpac Banking Corp edged down 0.1% to A$32.34, following the news it has completed its acquisition of a $1.45 billion portfolio of Australian asset and corporate loans from the UK-based Lloyds Banking Group. Insurance Australia Group added 0.3% to A$5.84, after increasing its insurance protection from A$5 billion in 2013 to A$5.6 billion in 2014.

Aurizon, which operates industrial rail freight lines in Queensland, rose 0.8% at $4.92 as the Queensland government urged miners to get started on new projects to take advantage of its discounted royalty scheme in the Galilee basin, while ruling out extending the perk to other parts of the state.

Australia's biggest oil producer, Woodside Petroleum, dropped 0.9% to A$38.56 amid speculation Shell is preparing to move to sell its 23% interest valued at roughly A$7.4 billion.

Data from the Reserve Bank of Australia showed the prices of iron ore and thermal coal increased in November, while gold, coking coal, wheat and base metals declined. Overall, the RBA's index of commodity prices for November rose 0.1%, after declining 0.4% in October. In Australian dollar terms the 0.1% rise translated to an increase of 1.5%.

In Japan, Stocks weren't trading in Tokyo on Thursday, as the Japanese market was closed for a public holiday.

The local currency was still being traded, with the dollar steady against the yen at 105.28. The greenback surged 21.4% against its Japanese counterpart in 2013a major contributor to the rally in stocks, which enjoyed their best year in four decades with a 57% gain.

In China, shares in the Chinese market declined as Chinese manufacturing PMI data for December 2013 disappointed, adding to views that while the world's second-largest economy remains resilient, it lost some steam in late 2013. The benchmark Shanghai Composite index declined 6.59 points to finish at 2109.39, while the CSI 300 Index grew 8.05 points to close at 2321.98.

Investment rationale turned bearish in China after economic data indicated weakness in the Chinese manufacturing sector. The manufacturing Purchasing Managers' Index compiled by HSBC and Markit eased to 50.5, unchanged from the initial flash reading released earlier last month, but lower than the final November print of 50.8. The moderation of December's final HSBC China Manufacturing PMI was mainly due to slower output growth.

The HSBC report came one day after the official Purchasing Managers' Index (PMI), published by the National Bureau of Statistics, dipped to 51.0 in December from November's 51.4, as export orders and output weakened.

Also weighing on Shanghai was the resumption of initial public offerings, after a moratorium on new listings since late 2012. Earlier in the week, five companies were granted approval to start marketing deals on Thursday. Before the suspension of IPOs, China's domestic stock market had been weighed for several years by a constant supply of shares of new companies coming to the market.

Most of the China's sectoral heavyweight declined, with shares in energy, consumer-staples and financial companies lead losses. Yanzhou Coal lost 2.6% to 8.65 yuan. Datong Coal fell 3.5%. Kweichow Moutai, China's biggest liquor maker by market value, declined 1.9%. Wuliangye, the second-largest, dropped 1.4%. Ping An Insurance Group Co. declined 1%, while Industrial Bank Co. lost 1.6%.

In Hong Kong, HK stocks closed firmer in volatile yet quiet trade. The benchmark index opened 146 points higher, but retreated at lunchtime after data showed both the China's official PMI and HSBC Markit PMI growth moderated in December. However, market recouped some ground late afternoon on value buying. The benchmark Hang Seng Index was provisionally ending 33.66 points higher at 23340.05. The benchmark index rose 2.87% YoY in the CY2013.

Among the HK 50 blue chips, 24 rose and 21 fell, with 5 stocks remaining steady. Tencent Holdings was the top blue-chip gainer, rising 2% to HK$504.50, while China Coal Energy Co was the top blue-chip loser, down 4.1% to HK$4.18.

In economic news, Macau earned MOP360.75 billion of gambling revenue in 2013, an increase of 18.6% from 2012, data from Macau's Gaming Inspection and Coordination Bureau showed. In December, gaming revenue amounted to MOP33.46 billion, up 18.5% over the same period last year.

Hong Kong's value of total retail sales in November, provisionally estimated at HK$39.6 billion, rose 8.5% over a year earlier. After netting out the effect of price changes over the same period, the volume of total retail sales expanded 9% in November compared with a year earlier, data from the Census and Statistics Department showed. The revised estimate of the value of total retail sales in October grew 6.3% over the same period a year earlier, while the volume of total retail sales increased 5.9%. For the first eleven months of 2013, total retail sales gained 11.6% in value and 11.1% in volume over the same period a year earlier.

In Singapore, shares in the Singaporean market was trading firmer late afternoon, with the benchmark Strait Times index up 0.23% from prior day to 3173.87, in spite of official data indicated domestic economy shrank for the first time in five quarters after its manufacturing and services industries weakened.

Singapore Gross domestic product fell an annualized 2.7% in the three months to Dec. 31 from the previous quarter, when it expanded a revised 2.2%, the trade ministry said in a statement today.

In India, key benchmark indices dived into negative zone from positive zone around mid-afternoon trade.

The Sensex extended initial gains and hit fresh intraday high in morning trade. Firmness continued on the bourses in mid-morning trade after the result of a survey showed that India's manufacturing sector ended 2013 on an encouraging footing as operating conditions improved for the second successive month in December 2013, as both output and new orders increased. The Sensex trimmed gains in early afternoon trade. The Sensex retained positive zone in afternoon trade. Volatility ruled the roost after a sudden steep slide pushed key benchmark indices into negative zone from positive zone in mid-afternoon trade.

At 14:20 IST, the S&P BSE Sensex was down 158.15 points or 0.75% to 20,982.33. The index fell 214.17 points at the day's low 20,926.31 in mid-afternoon trade, its lowest level since 20 December 2013. The index jumped 190.84 points at the day's high of 21,331.32 in morning trade, its highest level since 9 December 2013.

Among the 30-share Sensex pack, 18 stocks declined and the rest rose. Bhel (down 2.77%), Tata Power Company (down 2.43%) and L&T (down 2.41%) dropped.

The Indian manufacturing sector ended 2013 on an encouraging footing, according to a monthly survey from Markit Economics. Operating conditions improved for the second successive month in December, as both output and new orders increased. Consequently, firms raised their workforce numbers further in the latest month.

Down slightly from 51.3 in November to 50.7 in December, the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) signalled a second consecutive monthly improvement in business conditions. Although weaker than its long-run trend, the PMI average for the final quarter of the year at 50.5 was greater than that seen for Q3 at 49.4. Manufacturing production rose for the second month running, but at only a marginal rate. Supporting the latest increase in total output was a further gain in incoming new business. Sector data indicated that the overall expansion in production volumes was largely centred on the consumer goods sub-sector, Markit Economics said.

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First Published: Jan 02 2014 | 3:05 PM IST

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