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Asia Pacific Market: shares gain on Yellen comments, China trade data

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Capital Market
Last Updated : May 14 2014 | 11:59 PM IST
Asia Pacific share market rebounded on Thursday, 08 May 2014, as unexpectedly strong Chinese trade figures and Federal Reserve Chair Janet Yellen indicated continued central bank support for the U.S. economy. The MSCI Asia Pacific Index gained 0.5% to 137.55.

The Customs Administration said on Thursday that China's exports climbed 0.9% on year in April versus March's 6.6% fall, while imports rose an annual 0.8%, compared with an 11.3% slump in March. This brought the trade surplus for the month to $18.5 billion, more than double the $7.7 billion in March.

Federal Reserve chairwoman Janet Yellen reiterated her view that the world's biggest economy is doing better than is evident from official data after a freak cold snap earlier in the year, while confirming the central bank will not rush to raise the official interest rate.

Risk sentiments for cyclical stocks also underpinned as calming concerns that Ukraine will descend into civil war after President Putin called on separatists in the eastern reaches of the country to postpone their referendum on independence, and added that Russia had withdrawn its forces from the border. Putin stressed that Russia will do "all it can" to resolve the crisis and will take a "most positive" approach to international peace efforts.

Among Asian bourses, Japanese share market finished the session modest higher, as investors bought back shares unloaded in the prior session's sharp selloff. But buying enthusiasm was blunted by weakness in companies announcing earnings results after Wednesday's market close, as overall sentiment remained fragile. The benchmark Nikkei 225 index rose 0.93% to 14163.78, while the Topix index of all first-section shares climbed 0.69% to 1160.01.

Mitsubishi Corp. soared 6.5% to 1,938 yen after the trading house's earnings topped estimates and it said it will buy back stock.

SoftBank Corp lost 1.6% to 7229 yen, extending losses from Wednesday's 5% decline, due to risk pessimism after the China's largest e-commerce operator announced plan to raise as much as $20 billion via an initial public offering in the US.

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Consumer electronics Nintendo Co closed 0.7% down at 10595 yen after losing as much as 5% after booking a wider operating loss of Y46.4 billion for the just-ended fiscal year, hurt by sluggish sales of its Wii U software and Nintendo 3DS game consoles.

In Australia, Australian share market rebounded, as investors chased for bargain hunting after better than expected domestic employment report and positive trade figures out of China, with shares in materials & resources, energy and financial companies led advances. The benchmark S&P/ASX200 rose by 0.75% to close at 5476.80 and the broader All Ordinaries gained by 0.68%% to 5455.90.

Materials and resources stocks were broadly higher in Sydney market after Chinese trade figures came in well ahead of expectations. BHP Billiton was up 1.3% to A$37.65, while Rio Tinto jumped 1.4% to A$61.46 as chief executive Sam Walsh told the annual general meeting he was not concerned about increased competition to its flagship iron ore business in the Pilbara from a joint venture between China's biggest steel producer Baosteel partners and local iron ore rail haulage provider Aurizon. Iron ore miner Fortescue Metals Group jumped 4.1% to A$61.46, even as the spot price for iron ore, landed in China, fell 0.9% to a near two-month low of $US105.10 a tonne.

Financials also finished higher, with top four lenders led gains. ANZ Banking Group rose by 0.1% to A$33.80, Commonwealth Bank of Australia 0.7% to A$79.09 and Westpac Banking Corp 1.2% to A$34.90. National Australia Bank advanced 0.9% to A$34.14 despite narrowly missing forecasts for a A$3.2 billion half-year cash profit to report a 8.5% rise to A$3.15 billion in the six months ended March 31. However investors were cheered that the bank boosted its interim dividend by 6 cents to 99 cents.

In New Zealand, equities on the New Zealand share market finished weaker today after a political poll showed dwindling support for the incumbent National-led administration, and weighing on power companies exposed to regulatory risk under a change of government. Contact Energy lead the benchmark index lower, as MightyRiverPower, Meridian Energy, and Genesis Energy paced the decline. By the provisional close, the NZX 50 Index fell 27.716 points, or 0.5%, to 5161.41. Within the index, 23 stocks fell, 18 rose and nine were unchanged.

Shares of power companies declined after a Roy Morgan political poll showed a Labour-Green coalition could win government in September's general election. The two opposition parties plan to re-regulate the energy market in a bid to push down retail prices, a policy which has dampened investors' interest in the government's partial privatisation of state owned energy companies, MRP, Meridian and Genesis.

Z Energy, the transport fuel refiner, fell 1.3% to $3.83 after boosting underlying earnings 12% to $219 million as it widened fuel margins at the expense of market share.

Warehouse, New Zealand's largest listed retailer, was unchanged at $3.38 after the red sheds company said sales rose 8.6% in its third quarter.

In China, Mainland China share market finished the session slight higher after trimming intraday gains spurred by surprisingly strong trade surplus data and renewed stimulus measures speculation. The benchmark Shanghai Composite Index rose 5.19 points to close at 2015.27, after touching an intraday peak of 2036.94.

The Customs Administration said on Thursday that China's exports climbed 0.9% on year in April versus March's 6.6% fall, while imports rose an annual 0.8%, compared with an 11.3% slump in March. This brought the trade surplus for the month to $18.5 billion, more than double the $7.7 billion in March.

Investors were speculating that government support for the flagging economy might be on the way after the People's Bank of China warned of the possibility of a further growth slowdown in a report on Tuesday.

Shares of property developers were mostly higher, with company's exposure to Beijing and the northern province of Hebei led rally after the regions unveiled measures to aid the market. Shijiazhuang, the capital of Hebei province, released a set of proposals to speed up plans for the development of a mega-metropolitan area encompassing Beijing, Tianjin and Hebei province on Wednesday. Huayuan Property Co locked 10% upper circuit at 3.15 yuan and Metro Land Corp hit daily trading limits of 10% to 4.72 yuan.

In Hong Kong, shares in city's market were mostly higher, after better than expected export numbers from China, though overall increases were limited by sliding casino firms after China initiated a probe into illegal payments in Macau. The benchmark Hang Seng index was up 0.42% to 21837.12, while Hang Seng China Enterprises Index grew 0.82% to 9734.97.

Among the HK 50 blue chips, 24 rose and 23 fell, while remaining three stocks closed steady. China Mobile advanced 3.4% to HK$75.20, contributing 46-points gains to the benchmark Index and becoming the best-performing blue chip in percentage term. Galaxy Entertainment Group declined 7.6% to HK$55.40, contributing 33-points losses to the benchmark Index and becoming the worst-performing blue chip in percentage term, after China initiated a probe into illegal payments in Macau.

Energy shares were sharp higher in Hong Kong market after data from the China Petroleum and Chemical Industry Federation showed faster growth in investment in the first quarter of 2014. China Petroleum and Chemical Corp (Sinopec) rose 2% to HK$6.77 and PetroChina Co jumped by 1.7% to HK$8.93. China Shenhua Energy Co added 1.4% to HK$21.10.

China telecom carriers were higher on news of preliminary joint TowerCo stake distribution among the trio, with China Mobile taking the largest share of 40%. China Mobile (00941) added 3.4% to HK$75.2. China Unicom (00762) put on 3% to HK$12.72. China Telecom (00728) jumped 5.3% to HK$4.19.

Shares in casino companies declined the most in HK bourse after China's state-backed UnionPay announced fresh measures to crack down on illegal payment channels in the world's largest gambling hub. Macau is facing a cash-card crackdown on concern that tens of billions of yuan are being funneled into casinos in contravention of national currency controls, the South China Morning Post reported today, citing unidentified gaming and security sources. Galaxy Entertainment sank 7.6% to HK$55.40, while Wynn Macau declined 8.5% to HK$28.50 and Sands China lost 4.6% to HK$52.55.

In India, key benchmark indices eked out small gains after witnessing intraday volatility. The S&P BSE Sensex garnered 20.14 points or 0.09% to settle at 22,344.04, its highest closing level since 6 May 2014. Among the 30-share Sensex pack, 17 stocks gained and rest of them fell.

Procter & Gamble Hygiene and Health Care jumped 4.99% after net profit rose 55.04% to Rs 80.76 crore on 20.09% rise in net sales to Rs 500.35 crore in Q3 March 2014 over Q3 March 2013. The company announced the result after market hours on Wednesday, 8 May 2014.

Tata Motors rose 1.56%. TML Holding, a wholly owned subsidiary of the company, on Wednesday, 7 May 2014, issued and allotted $300 million in principal amount of 5.75% senior fixed rate notes due 2021. The net proceeds from the notes will be used to repurchase certain shares issued to Tata Motors and for general corporate purposes, Tata Motors said in a statement today, 8 May 2014.

India's largest Power Project exporter, Bharat Heavy Electricals (Bhel) rose 3.22%. The company announced during trading hours today, 8 May 2014, that it has achieved one more milestone in the Middle-East region with the commissioning of yet another Gas Turbine Generating unit in Oman. The 126 MW Fr-9E Gas Turbine Generator (GTG) has been successfully commissioned at Qarn Alam-3 power project of Petroleum Development Oman (PDO). This is the second successive project after the successful commissioning of the 2x126 MW Fr-9E PDO Amal GTG project in 2012, Bhel said in a statement.

HCL technologies rose 1.61%. HCL Technologies after market hours today, 8 May 2014, said it has partnered with LinkedIn to launch an application aimed at encouraging users to go above and beyond the scope of their existing contracts.

Lupin fell 1.13% to Rs 979. The stock was volatile. The stock hit a high of Rs 999.25 and low of Rs 965.50. A foreign brokerage house upgraded Lupin to "outperform" from "neutral" and raised its target price to Rs 1,100 from Rs 985 after the drug maker's Q4 earnings beat consensus estimates. The brokerage said accelerating US generic sales are providing comfort about margins. Given its execution track record, strong balance sheet, earnings momentum and defensive characteristics, Lupin should sustain premium valuation of around 20 times FY 2015 earnings, it said.

Elsewhere in the Asia Pacific region, Taiwan's Taiex index added 0.42%. South Korea's KOSPI index was up 0.55%. Singapore's Straits Times index rose 0.35%. Malaysia's KLSE Composite closed 0.13% up. Indonesia's Jakarta Composite Index edged down 0.02%.

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First Published: May 08 2014 | 5:15 PM IST

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