The advance in the regional market came on hopes US data later in the global day may signal a mixed recovery in the world's biggest economy that may keep the Federal Reserve from reducing stimulus this year.
Economic data from the US released overnight were mixed with good news on housing offset by a drop in consumer confidence to a seven-month low. US home building permits surged more than expected in October to the highest level in five years, the Commerce Department reported. Home prices in the 20 largest cities on the S&P Case-Shiller index rose 13.3 per cent in September from a year ago, topping the 13 per cent average estimate. But consumer confidence fell in November, according to the Conference Board, instead of rebounding from an October plunge amid the partial government shutdown. The Conference Board's confidence index fell to 70.4 in November from a revised 72.4 a month that was stronger than initially estimated, the New York-based private research group said yesterday.
Investors have been keeping watch on economic data in the United States as the Federal Reserve monitors the pace of recovery to gauge when it will begin to reduce monetary stimulus for the US economy, which has been aimed at encouraging growth. The Fed has said improvement in the labour market is a key factor in its policy assessment. The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013.
The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
But, gains on the upside were limited as investors' opted side-line ahead of the upcoming US thanksgiving holiday. Meanwhile, risk sentiments were also muted on reports fund managers switching funds from Asian market to better performing markets like Germany and America where stock indexes are setting record highs. The Nasdaq composite closed above 4,000 overnight for the first time in 13 years. The Standard & Poor's 500 closed above 1,800 for the first time and the Dow Jones industrial average finished above 16,000.
Among Asian bourses, the Australian share market closed weaker after swinging between gains and losses, with shares in miners, energy, industrial and consumer goods companies led retreat. The benchmark S&P/ASX 200 index declined 24.10 points, or 0.45%, to 5332.90. The broader All Ordinaries lost 25.70 points, or 0.48%, to 5324.90.
Shares of heavyweight energy players declined the most in the Australian market in response to fall in crude oil prices. World oil prices fell on Tuesday as the interim Iranian nuclear agreement was bolstered by expectations of higher US crude oil inventories. Brent crude eased by US12c to US$110.88 a barrel while US Nymex crude fell by US41c to US$93.68 a barrel. Among energy players, Woodside Petroleum fell 0.4% to A$38.24, Origin Energy 1.1% to A$14.15, Santos 1.3% to A$14.34 and Oil Search 1.2% to A$8.28.
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Australian materials and resources shares declined the most in the Australian bourse in response to pullback in base metal price at the London Metal Exchange on Tuesday, with the exception being lead (up 0.3%). Zinc recorded the biggest decline down 0.8% while nickel lost 0.7%. Among miners, BHP Billiton declined 1.5% at A$37.25, while Rio Tinto lost 1.1% to A$64.30 and Fortescue Metals shed 1.6% to A$5.65.
Australian dollar was weaker against greenback and other major currencies on Wednesday, in spite of data showing a strong rise in construction activity. The currency has been under pressure since last week when Reserve Bank of Australia Gov. Glenn Stevens said he was open-minded on the question of intervention, which created speculation that action to drive the currency lower was imminent.
Australian Bureau of Statistics said on Wednesday that construction work done rose seasonally adjusted 2.7 per cent to A$53.43 billion in the September quarter. Meanwhile, the seasonally adjusted estimate of total building work done rose 1.5%, to A$20.96 billion and for engineering work done rose 3.5%, to A$32.47 billion in the September quarter.
In Japan, the Japanese share market extended a retreat for second consecutive session after hitting a six-month high on Monday, as investors cashing out gain off the table on market overheating woes. Meanwhile halt in yen depreciation against the greenback also triggered profit booking. The benchmark Nikkei225 index declined 65.61 points to 15449.63, while broader Topix index shed 5.94 points to 1247.08. The Nikkei225 index remains up 9.7% over the last month, however, on pace for its second-best monthly performance of the year.
Panasonic Corp rose 3.5% to 1167 yen on reports that the company plans to sell three semiconductor plants in Japan to Israeli chip maker TowerJazz.
Nippon Steel & Sumitomo Metal Corp closed 0.9% down at 328 yen, in spite of reports that the firm will team up with ArcelorMittal to acquire an automotive steel-sheet plant in the U.S. from ThyssenKrupp.
Internet retailer Rakuten rose 6.4% to 1,527 yen, after news that the TSE on Tuesday approved the firm's application to move to the Topix from the JASDAQ startup bourse on Dec. 3.
The BOJ released the minutes for the October meeting. At the meeting, the central bank kept interest rates unchanged at 0.1% and decided to maintain the target for the monetary base expansion at an annual pace of 60-70 trillion yen. 3 of the 9 board members were opposed to the central bank's baseline medium-term growth and inflation outlook that upside and downside risks are balanced. On monetary policy, "most members" agreed to keep the accommodative policy so as to achieve its 2% inflation target.
The average price of regular gasoline in Japan this week slumped to 156.9 yen per litre from 157.9 yen last week, marking the fifth straight weekly drop, data from the Agency for Natural Resources and Energy showed on Wednesday. The average retail price this week was 7.8% above the 145.7 yen per litre price seen a year earlier, the 29th straight week of year-on-year increase following the 8.4% gain in the previous week.
In China, key benchmark indices of the Chinese share market rose for the first time in five straight sessions, with tech, industrials, financial and resources blue chip shares leading the way up. The Shanghai Composite gained 18 points to finish at 2201.07, while the CSI 300 Index jumped 27.06 points to 2414.48.
The rebound in the Chinese market came after the head of China's central bank assured the market of more financial reforms, including free deposit rates and a more flexible currency. People's Bank of China head Zhou Xiaochuan also said that China will allow more foreign institutions to invest in the domestic stock and bond markets.
Shares of Chinese brokerage companies advanced after Citigroup said in a latest report that China's reform outlines reiterated accelerated development in capital markets, which would be structurally positive for brokers in the long term. Citic Securities Co, China's biggest listed brokerage, added 3.1% to 12.91 yuan. Haitong Securities Co, the second largest, added 3.4% to 11.73 yuan. Sealand Securities advanced 7.8% to 11.55 yuan. Sinolink Securities locked 10% upper circuit at 17.69 yuan.
Shares of defense-related companies rose in China on demand optimism amidst rising tensions over a new air defense zone after two American B-52 bombers flew through disputed areas of the East China Sea covered by China's defense zone. China announced the air-defense identification zone effective Nov. 23 and said its military will take defensive emergency measures if aircraft enter the area without reporting flight plans or identifying themselves. Guangzhou Hi-Target Navigation surged 10% to 27.89 yuan. Chengdu Gotecom Electronic Technology Co. gained 6.8% to 19.18 yuan. Beijing BDStar Navigation Co climbed 8% to 39.69 yuan.
Shares of China's railway-related companies jumped on reports that China, Hungary and Serbia will set up working groups immediately and advance the railway project as rapidly as possible. CSR, the nation's biggest train maker, added 2.9% to 5.28 yuan, a third day of gains. China CNR, the second largest, rose 1.6% to 5.61 yuan.
In Hong Kong, shares in the Hong Kong financial market climbed up, with the benchmark Hang Seng Index rising 125.07 points to finish at 23806.35, while the Hang Seng China Enterprises Index advanced 99.93 points to 11401.96. The city bourses commenced trading firmly lower, but recovered its lost ground mid-morning on tracking rebound in Mainland China A-share market. In afternoon, the index simply consolidated its gains.
Among the HK 50 blue chips, 32 stocks rose and 15 fell, with three stocks remaining steady. Hengan (01044) gained 2% to HK$96.4, while CR Land (01109) slipped 1.9% to HK$20.55, making themselves the biggest blue-chip winner and loser.
China Mobile climbed up 1.6% to HK$82.95 on talks of 4G licence issuance tomorrow from China, while HSBC Holdings was up 0.3% to HK$87.
Elsewhere, TCC International (01136) soared 23.9% to HK$3.79 after its major holder proposed to take the company private at HK$3.9 per share.
Chow Tai Fook Jewellery Group shares closed steady at HK$12.32 after raising intraday high of 4% gain after the company posted a better-than-expected net profit jump of 90% to HK$3.6 billion in the six months ended Sept. 30. Chow Tai Fook's revenue climbed nearly 50%, driven by strong sales of gold jewelry.
Stocks in Lenovo Group rose 0.2% to HK$9.21 after computer maker's Hewlett-Packard Co fiscal fourth-quarter results. H-P's revenue fell nearly 3%, but the company swung to a profit for the quarter.
In Indonesia, shares in the Indonesian market finished modest higher, with benchmark Jakarta Composite index gaining 0.38% to 4251.49.
Indonesia's rupiah extended declines on concern the current-account and trade deficits aren't narrowing fast enough. The currency yesterday slid after a dollar bond sale fell short of its target.
In India, Indian benchmark indices trimmed losses after hitting fresh intraday low in mid-afternoon trade. Initial gains in European stocks aided intraday recovery on the domestic bourses. The barometer index, the S&P BSE Sensex, was down 15.95 points or 0.08%, up close to 60 points from the day's low and off about 70 points from the day's high.
Among the 30-share Sensex pack, 22 stocks fell and rest rose. Bharti Airtel (down 1.6%), GAIL (India) (down 1.14%), and Sun Pharmaceutical Industries (down 1.13%), edged lower from the Sensex pack.
Tata Consultancy Services (TCS) shed 0.08%, with the stock reversing initial gains. TCS announced after market hours on Tuesday, 26 November 2013, that Keler, Hungary's Central Securities Depository, has selected the Market Infrastructure solution of TCS BaNCS for modernizing its technology and to set up its capability for T2S settlement. The TCS BaNCS solution will provide Keler with a modern, standards compliant, multi-asset, multi-entity solution that will enable the company to quickly introduce new products and services to its market participants and engage with its stakeholders better through faster reporting and communication.
LIC Housing Finance fell 2.73% to Rs 201.60. A block deal of 10.75 lakh shares was executed in the counter on BSE at Rs 200.75 per share at 13:48 IST.
Elsewhere in the region, New Zealand's NZX50 added 0.18%. South Korea's KOSPI rose 0.31%. Taiwan's Taiex index added 0.58%. Malaysia's KLSE Composite rose 0.02%. Singapore's Straits Times index shed 0.05%.
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