Geopolitical tensions over Ukraine eased after comments from Russian President Vladimir Putin on Tuesday, 4 March 2014, signaled the Ukraine crisis won't immediately escalate. Putin on Tuesday, 4 March 2014, said that he's not considering taking control of the Black Sea region of Crimea and would send troops into Ukraine only in extreme circumstances. Ukraine, a former Soviet republic, has been plunged into turmoil since protesters forced the ouster of the president last month. Russia keeps its Black Sea fleet in Crimea, where the majority language is Russian. Troops in the region have only been securing their bases and gunmen who have seized crucial infrastructure and surrounded military installations in the Crimea are acting independently, Putin said on Tuesday.
Meanwhile, risk sentiments also bolstered on easing concerns over a sharp slowdown in China following the announcement of its annual growth target.
At the start of China's annual meeting of its legislature, the National People's Congress, Premier Li Keqiang today, 5 March 2014, said the government would keep its economic-growth target at 7.5% in 2014, unchanged from that of 2012 and 2013. Meanwhile, the consumer inflation target was set at 3.5%. The world's second-largest economy grew 7.6% in 2013, its slowest pace since 1999. Setting the target at 7.5% would strengthen market confidence, optimize economic structures, and protect jobs, Li said in his first "work report" to the legislature. "Growth is the key to solve all the key issues in our country. We have to hold firm to the focus of economic development in our work and maintain a proper economic growth rate," Li said.
The 7.5% target "is in keeping with our goal of finishing building a moderately prosperous society in all respects, and it will boost market confidence and promote economic structural adjustment. More importantly, stable growth ensures employment," Li said. "China is still a developing country in the primary stage of socialism, and development remains the key to solving all our country's problems," Li said in the report.
Among Asian bourses, Japan's stock market closed sharp higher, spurred on by yen depreciation against major currencies and on tracking strong rally on offshore markets during Tuesday's trade. The benchmark Nikkei-225 index added 1.2% to 14897.63, while the Topix index of all first-section shares climbed up 0.73% at 1212.90.
Also helping Japanese stocks were recent comments from Bank of Japan Governor Haruhiko Kuroda interpreted as market-friendly and positive for a weaker Japanese yen. The dollar rose to Y102.19 as of the Tokyo stock market close Wednesday, from Y101.64 a day prior.
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Real-estate developers and exporters continued uptrend on bargain hunting after heavy recent selling. Mitsubishi Estate rose 5.2% to 2549 yen. Mitsui Fudosan gained 3.6% to 3155 yen. Sumitomo Realty & Development added 3.5% to 4334 yen. Honda Motor rose 1.3% to 3732 yen. TDK added 1.8% to 4360 yen.
Nippon Electric Glass Co, a supplier of panels used in liquid crystal displays, climbed 4.2% to 473 yen after Macquarie Group raised its rating on the stock to outperform from neutral.
Fuji Heavy Industries, a Subaru cars maker, dropped 1.8% to 2685 yen, after cutting its profit forecast.
In Australia, Australian stock market closed higher, on the back of better than expected fourth quarter GDP data and receding geopolitical tension between Ukraine and Russia. The benchmark S&P/ASX 200 Index lifted 0.85% to 5446.2, the highest finish since June 2008.
Australian shares have closed at their highest in more than five-and-a-half years, after Australian Bureau of Statistics data showed the Australian economy picked up pace in the December quarter, rising by 0.8% after a 0.6% increase in the September quarter. The GDP number was at the upper end of expectations, with the economy growing at a 2.8% annual pace, only modestly below the decade average growth of 3%. The biggest contributions to growth came from net exports (+0.6%age points) followed by household consumption (+0.4pp), inventories and public investment (both +0.2pp) and government consumption (+0.1pp). The biggest drag on growth was non-dwelling construction (-0.2pp).
Meanwhile, buying momentum spirited further on abating fears of a military escalation between Ukraine and Russia eased after Russian President Vladimir Putin said in a news conference that there is "no need yet" to use military force in Ukraine
Among ASX sectors, information technology sector was up 2%, the best-performing sector in 10 sectoral groups, while realty issue had worst day, finishing 0.2% down. Elsewhere, consumer discretionary, property trusts, financials, energy, industrials, materials healthcare, utilities and consumer staples sectors dived 1.34%, 1.15%, 1%, 0.96%, 0.93%, 0.86%, 0.79%, 0.4% and 0.37%, respectively.
In company news, Wesfarmers shares jumped rose 1% to A$43.15 after the owner of Coles announced plans to spend A$1.1 billion opening 70 new supermarkets across the country over the next three years. The expansion plan is expected to create 16,000 jobs.
Qantas (QAN) shares rose 0.44% to A$1.14 on bargain hunting following significant selling in the stock since posting its A$252 million loss last week. Labor and the Greens have said they will block legislation to change the Qantas Sale Act in the Senate, as proposed by the Abbott government earlier this week.
Carsales.com shares declined 0.6% to A$10.51 as it traded ex-dividend. The company today announced plans to acquire a further three% stake in iCar Asia, taking its total stake to 22.9%.
In China, Mainland China stock market extended losses for second consecutive day, after the China set its growth target unchanged at 7.5% for this year and on reports stating the country might face first-ever default in the corporate-bond market later this week. The benchmark Shanghai Composite Index slipped 0.89% to 2053 at the close.
The concerns about China's first onshore corporate bond default resurfaced after Shanghai Chaori Solar Energy Science & Technology Co. (002506) said on Tuesday that it may not be able to make an 89.8 million yuan ($14.6 million) interest payment in full by the March 7 deadline. A default would highlight strain in China's financial system after a trust product issued by China Credit Trust Co. was bailed out in January.
At its annual legislative session, China's National People's Congress kept an annual growth target of about 7.5%, the same as last year. Premier Li Keqiang told the annual meeting of the legislature in Beijing today that the growth target, which is the same as last year's, will boost market confidence and protect jobs. We must keep economic development as the central task and maintain a proper economic growth rate, Li said.
Among SSE sectors, 9/10 sectors of the SSE index declined, with healthcare sector was worst performer amongst the SSE sectoral peers, falling 1.37%, while consumer staples issue had best day, gaining 0.33%. Meanwhile, financials, industrials, telecommunication services, materials, utilities, consumer discretionary, information technology, and energy industries declined by 1.27%, 1.16%, 0.81%, 0.8%, 0.73%, 0.67%, 0.54%, and 0.43%, respectively.
In Hong Kong, HK stocks closed weaker for second time in last three sessions, dragged down by Mainland related stocks, as China Premier Li Keqiang's work report delivered little surprises, despite the strong rally of the Dow on abating tension between the US and Russia. The benchmark Hang Seng index declined 77.85 points from prior day to finish at 22579.78.
Chinese stocks listed in Hong Kong declined the most city bourse on default concerns. PetroChina Co. slumped 2.2% to HK$8.06 and China Construction Bank Corp. lost 1.5% to HK$5.18, the biggest drags on the H-share gauge. China Medical System Holdings Ltd. plunged 6.2% to HK$9.35 after the preliminary results of a clinical trial on a liver cancer treatment showed no statistical difference from a placebo in some patient groups.
Solar counters shined. GCL-Poly (03800) shot up 2.5% to HK$2.89. Singyes Solar (00750) jumped 11.9% to HK$11.02.
Among other stocks, Sands China (01928) was top blue-chip winner, putting on 2.1% to HK$66.15. Cheung Kong (00001) edged up 0.8% to HK$124.6. Huchison Whampoa (00013) rose 1.5% to HK$110.7. Casino-operator Sands China Ltd. added 2.1% to HK$66.15, while Cathay Pacific Airways Ltd. rose 1.8% to HK$15.68.
China Unicom (00762) and Tencent (00700) reached an agreement on WeChat payment. Unicom fell 2.7% to HK$10.16, but Tencent gained 1.6% to HK$622.5.
In India, Indian stock market closed higher in choppy trade after a survey showed that private sector output across India rose for the first time in eight months during February and that Indian services companies maintained their positive outlook for output growth over the coming year in February 2014. Services contribute about 60% to India's gross domestic product.
The S&P BSE Sensex garnered 67.13 points or 0.32% to settle at 21,276.86, its highest closing level since 23 January 2014. Among the 30-share Sensex pack, 17 stocks rose and rest of them declined.
Index heavyweight Reliance Industries (RIL) fell 1.1% to Rs 805.65. The stock hit high of Rs 817.85 and low of Rs 805. Reliance Jio Infocomm (Reliance Jio), a subsidiary of RIL, and Bharti Infratel, after market hours on Tuesday, 4 March 2014, announced the signing of a Master Services Agreement. Under the agreement, Reliance Jio would utilize the telecom tower infrastructure of Bharti Infratel to launch its services across the country. As per the agreement, the pricing would be at 'arm's length,' based on prevailing market rates.
Oil & Natural Gas Corporation (ONGC) rose 1.76%. The company after market hours on Tuesday, 4 March 2014, said that a meeting of the board of directors of the company will be held on 24 March 2014 to consider payment of second interim dividend for the year ending 31 March 2014. ONGC has fixed 29 March 2014 as record date for determining entitlement of shareholders for payment of second interim dividend. Payment of interim dividend, if declared, shall start from 31 March 2014 onwards to the shareholders, ONGC said.
Punjab National Bank gained 4.26% after the bank announced after market hours on Tuesday, 4 March 2014, that after regulatory approvals, the bank has sold its entire stake in Credit Information Bureau India (CIBIL) to TransUnion International Inc. (FII).
Elsewhere in the Asia Pacific region, South Korea's KOSPI index added 0.88%. Taiwan's Taiex index rose 0.92%. New Zealand's NZX50 added 0.79%. Indonesia's Jakarta Composite Index rose 1.26%. Malaysia's KLSE Composite added 0.15%. Singapore's Straits Times index added 0.38%.
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