Headline equities of the Asia Pacific market closed mostly higher on Tuesday, 19 May 2015, boosted by record high finish of Wall Street overnight, Beijing fresh guidelines to reform its economic system in 2015, and the European Central Bank statement to increase its liquidity-boosting bond purchases in May and June. But gain on the regional bourses capped on caution ahead of key U.S. housing data that could feed into the Federal Reserve's decision on the timing of an interest rate increase.
The State Council, China's cabinet, said in a guideline published on Monday that the country needs deepen the economic system reform in 2015 by further opening up the financial sector to both foreign and domestic investors, expanding capital markets, and intensifying the reform of state-owned enterprises.
The European Central Bank signalled it would speed up its 1 trillion euro bond-buying program for the next two months ahead of an expected summer lull. The moves were compounded as France's central bank governor Christian Noyer, also an ECB member, said the bank was "ready to go further if necessary" with its easing measures.
Among Asian bourses
Nikkei ends above psychologically important 20000 level
Japanese share market advanced for second consecutive session, as risk sentiments propelled by fresh record high closes on Wall Street overnight and yen depreciation against the greenback. But, gain on the upside was limited on caution ahead of Japanese gross domestic product figures for January-March on Wednesday and a Bank of Japan policy setting meeting set to conclude Friday. The benchmark Nikkei 225 index advanced 136.11 points, or 0.68%, to finish at 20026.38. The broader Topix index of all first-section shares ended up 6.67 points, or 0.41%, up at 1633.33, its highest level since November 2007.
Shares of currency sensitive exporters went up after the US dollar rebounded modestly against the yen, improving to 120.06 yen compared to 119.67 yen at the previous Tokyo stock close. Casio Computer Co rallied 2.3%, TDK Corp 2.4%, Sony Corp 1.5%, and Bridgestone Corp 0.4%. Funai Electric Co., which gets 66% of sales in the U.S., advanced 1.7%. Panasonic Corp added 0.9% after the company announced plans to ramp up its output of solar cells
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Chiyoda gained 3.2% on news it was selected by Anadarko Petroleum Corp. to work on a potential $15 billion liquefied natural-gas project in Mozambique.
Stanley Electric advanced 2.8% after saying it will repurchase as much as 2 billion yen of stock, while Klab rose 2% after saying it will buy 2.5 billion yen of its shares.
Shares of Mitsubishi UFJ Financial Group Inc fell 1.4% in likely profit-taking after the shares rallied on the back on strong earnings and a share-buyback program.
Australia market extends losses
The Australian share market closed down for second consecutive session, after initial gain propelled by dovish Reserve Bank of Australia minutes which kept the door open for further rate cuts. The selloff triggered on concerns whether the recent weakening in the US dollar, coupled with gains in the Australian dollar to around US$0.80 and recovery of the commodity markets would be sustainable. The benchmark S&P/ASX 200 Index dropped 43.70 points, or 0.77%, to 5615.50, while the broader All Ordinaries Index lost 40.60 points, or 0.72%, to 5619.40. Market turnover was relatively healthy, with 1.89 billion shares changing hands worth of A$5.92 billion.
Banks and financial stocks extended the previous day's sharp losses, despite dovish Reserve Bank of Australia minutes, with Commonwealth Bank of Australia lower by 0.2% to A$82.85, ANZ Banking Group down 0.9% to A$32, and National Australia Bank down 1% to A$33.67. Westpac Banking Corp added 0.2% to A$32.28. AMP Capital dropped 2% to A$6.31 after its chief executive Stephen Dunne announced his exit after a decade at the helm.
Materials and resources stocks mostly declined, with BHP Billiton down 1.7% to A$29.63. Rio Tinto closed steady at A$57.45. Fortescue metal closed 3.1% lower at A$2.22 after the iron ore price shed 1.1% to $US60.65 a tonne in overnight trade on Monday.. Shares of South32, the new global miner spun off by BHP Billiton, climbed up 12% to A$2.33, backed by unanimously positive notes from JPMorgan and Citigroup, which all have buy recommendation on Australia's third-largest listed miner.
Shanghai Composite surges on signs of fresh investment
Mainland China equity market closed sharply higher, after Beijing unveiled guidelines to reform its economic system in 2015, which includes approval of railway projects and further opening up reform in the capital markets. The Shanghai Composite Index advanced 134.06 points, or 3.13%, to finish at 4417.55 points. The CSI300 index added 156.08 points, or 3.41%, to 4731.64.
China's state-planning agency approved six rail and subway projects on Monday, with a total investment close to 250 billion yuan ($40.30 billion). China's State Council also released guidelines on capital-market reform priorities Monday, touching on areas such as the Shenzhen-Hong Kong Stock Connect, and further liberalizing interest rates and boosting the yuan's global status.
Shares of banks and financials advanced the most in Beijing, buoyed by government pledged to further open up the capital markets. Huatai Securities Co locked 10% upper limit after it kicked off its Hong Kong initial public offering on Monday, aiming to rise up to $4.5 billion. Orient Securities Co and Dongxing Securities Co also surged 10% daily limit. Haitong Securities and Citic Securities Co gained 7.5% and 6.6% respectively. Banks also recorded a solid advance, with China Merchants Bank Co adding 4.6% while Bank of China, China Citic Bank Corp, China Construction Bank Corp, and China Minsheng Banking Corp all rallied 3%.
Shares of railway players advanced after China's top economic planning agency China's National Development and Reform Commission (NDRC) had given the green light to six rail and subway projects, with a total investment of close to 250 billion yuan ($40 billion), to spur economic growth. China Communication Construction Co. surged 10%, China Railway Construction Corporation jumped 3.5% and China Railway Group climbed 2.6%.
Hang Seng ups 0.37%
The Hong Kong stock market closed higher in volatile trade, as risk sentiments underpinned by tracking fresh record close of Wall Street overnight and sharp jump in Mainland China market today on reform plans. The Hang Seng Index ended up 102.29 points or 0.37% to 27693.54, off an intra-day high of 27765.55 and day low of 27500.76. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, rose 265.22 points, or 1.9%, to 14191.50 points. Turnover increased to HK$136 billion from HK$123 billion on Monday.
Chinese stocks became engine of the rally again. Both Bankcomm (03328) and China Life (02628) added 3% to HK$7.83 and HK$37.7, respectively. COLI (00688) rose 0.7% to HK$29 after plans to spin off property management business. CR Land (01109) rose 2% to HK$24.9.
Shares of tech players extended gain, with software developer Kingdee International Software Group adding 2.5% on the top of its previous surge of more than 10%, after Chinese e-commerce group JD.com Inc reached an agreement on Monday to buy a 10% stake in the company for about $171 million. Online-game developer NetDragon Websoft Inc jumped 5.3% and Forgame Holdings rose 1.9%.
Online giant Tencent Holdings rose 0.2% on reports it and several other companies are bidding for Nokia's maps business, competing with another group comprised of Uber Technologies Inc., Baidu Technologies Inc and Apax Partners.
Hong Kong's seasonally adjusted unemployment rate decreased from 3.3% in January - March to 3.2% in February - April. The underemployment rate also decreased from 1.4% in January - March to 1.3% in February - April, according to the Census and Statistics Department. On the short-term outlook, the Secretary for Labour and Welfare, Matthew Cheung Kin-chung, said the near-term employment outlook will continue to hinge on the overall economic growth, in particular how domestic demand and inbound tourism would fare down the road amidst the various uncertainties on the external front.
Sensex snaps two-day winning streak
Amid a divergent trend among various index constituents, key benchmark indices registered small losses. Index heavyweight and housing finance major HDFC edged lower. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, fell 41.77 points or 0.15% to settle at 27,645.53.
Index heavyweight Reliance Industries (RIL) edged higher in volatile trade after the company announced the pricing of its Regulation S offering of $200 million 5% Senior Unsecured Callable Notes due 2035. IT stocks rose. Most auto stocks edged lower. Realty stocks also edged higher. Bank stocks were mixed. Metal and mining stocks were mixed.
Foreign portfolio investors sold shares worth a net Rs 96.71 crore into the secondary equity market yesterday, 18 May 2015, as per data released by the depositories. Domestic institutional investors (DIIs) bought shares worth a net Rs 618.54 crore yesterday, 18 May 2015, as per provisional data released by the stock exchanges.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index added 1.2% to 9716.77. South Korea's KOSPI rose 0.34% to 2120.85. New Zealand's NZX50 slipped 0.3% to 5757.16. Singapore's Straits Times index fell 0.16% at 3454.04. Malaysia's KLCI fell 0.76% to 1809.72. Indonesia's Jakarta Composite index added 0.6% to 5269.37.
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