Regional bourses commenced today's trading firmly higher boosted by new signs of improvement in the U.S. economy. On Thursday U.S. economic news was good on two fronts: The Labor Department reported a drop in claims for unemployment benefits and the Federal Reserve Bank of Philadelphia said manufacturing activity in the mid-Atlantic region grew in July at the fastest pace in more than two years.
But after buying ran its course investors began selling blue chip stocks due to concerns over the Chinese and Japanese economies and lingering jitters over US stimulus continual after fresh comments about scaling back the US stimulus program.
In congressional testimony on Wednesday, Fed Chairman Ben Bernanke said the central bank still expected to start scaling back its bond purchase program later this year but left open the option of altering that plan if the economic outlook changed. In his second day of Congressional testimony, Bernanke reiterated that the Fed intends to maintain a highly accommodative policy for the foreseeable future.
Overall, the subdued moves suggest that investors are beginning to accept Bernanke's core position, which is that monetary policy will remain highly accommodative, even as the Fed begins to scale back its bond buying.
In the Asia Pacific market, Japan's share market declined for the first time in six straight sessions, as investors preferred to book recent gains ahead of weekend national parliamentary upper house elections. The benchmark Nikkei 225 index closed 1.48% lower after briefly diving nearly 2.7%, while the broader Topix index ended 0.82% lower. The benchmark index commenced today's trading firmly higher in response to Wall Street gains overnight and the yen's depreciation. But after buying ran its course investors began selling futures to lock in recent gains, which pushed down cash stocks. Investors are also selling stocks ahead of a meeting of the Group of 20 finance ministers and national polls Sunday that will elect half of Japan's 242-member upper chamber of parliament, which Prime Minister Shinzo Abe's ruling party is expected to win.
Sharp Corp closed 0.86% up after trimming early highs after the Nikkei newspaper reported it was considering raising funds via a private placement to Lixil Group Corp and Makita Corp. Shares of Lixil added 0.84%, and Makita fell 2.37%.
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Panasonic Corp declined 0.11% following reports the company and its unit Sanyo Co. will pay $56.5 million in fines in the U.S. for their involvement in a price-fixing case.
Australian stock market closed lower after opening comfortably higher, with a wave of selling in blue chip mining stocks and a slide in blasting systems supplier Orica after it cut full-year earnings guidance. The benchmark S&P/ASX200 fell 0.43% to 4972.10, while the broader All Ordinaries dropped 0.35% at 4959.40.
Explosives maker Orica was down 13.4% to A$18.19 after it downgraded its full year profit guidance. he group expects net profit for the full year to be down 10% compared to last year's result of A$650.2 million. A familiar refrain was offered as an explanation for the downgrade, with economic conditions being cited in addition to higher than expected costs related to its tunneling business.
Santos dropped 3.7% at A$13.74, after reporting a decline in production and cutting forecasts for oil and gas output.
New Zealand shares fell for a third session, led by Tower as institutional investors re-weight their portfolios ahead of MightRiverPower's addition to the top 50 index next week. The NZX 50 Index fell 25.079 points, or 0.6 percent, to 4538.306. MRP fell 0.8 percent to NZ$2.38 on turnover of $36.6 million as fund managers build their exposure to the stock in anticipation of its entry to the benchmark index.
Taiwan share market declined, dragged down by heavyweight tech stocks after TSMC's disappointing second-half outlook. Grim business prospects for HTC and Largan also weighed on the local market. The Taiex was down 1.6% at 8062.03. TSMC was 7% limit-down at NT$98.20 and Largan is limit-down at NT$867.00. HTC and Catcher dropped by 7% daily limit, closing at NT$168.50 and NT$135.00, respectively.
Chinese stock market tumbled for third day in row, dragged down by cyclical shares such as realty, resources, and energy on mounting concern over the economy and upcoming corporate earnings. Meanwhile jitters over further tightening move in the property sectors intensified selloff. The benchmark Shanghai Composite was 1.52% lower at 1992.65. The benchmark index lost 2.3% this week.
Property developers in China declined for second day in row on fears of further tightening move in the industry to curb property prices after home price rise in June. Average new home prices in 70 major Chinese cities climbed 0.8 percent in June from the previous month, easing slightly from May's month-on-month gain of 0.9 percent, according to calculations from data released by the National Bureau of Statistics (NBS) on Thursday. Compared with a year ago, new home prices rose 6.8 percent in June, the sixth consecutive rise. China Vanke Co, the nation's biggest listed property developer, lost 5.5% to 9.56 yuan. Poly Real Estate Group Co, the second largest, sank 5.6% to 10.18 yuan. Gemdale Corp, the fourth biggest, retreated 5.1% to 6.56 yuan.
Shares of Coal producers sank on tracking steep fall in China's coal price index. The Bohai-Rim steam coal price index, which tracks power-station coal prices at six Chinese ports, fell 1.5% WoW to 592 as on Wednesday, July 17, 2013. Datong Coal Industry Co slumped 4.2% to 5.75 yuan. Yanzhou Coal Mining Co fell 4.5% to 9.29 yuan. China Shenhua Energy Co lost 1.1% to 15.92 yuan.
The Hong Kong's stock market closed tad higher after seesawing in the boundary line, as gains in financials heavyweights helped offsetting losses among realty and utilities stocks. The benchmark Hang Seng Index finished 0.1% higher at 21362.42.
Among the 50 HK blue chips, 33 fell, while 12 rose and 5 stocks remaining steady. CR Power dipped 4.5% to HK$16.86, while China Shenhua put on 3.1% to HK$23.05, making themselves the biggest blue-chip loser and winner. China Resources Group companies were lower after Chinese top authority has confirmed that it is investigating into the corruption case of China Resources Group. CRL (01109) fell 2.6% to HK$19.72. CR Enterprise (00291) slipped 0.9% to HK$23.2.
Solar counters rose in HK after China announced anti-dumping duties on polysilicon originating from US and South Korea. GCL-Poly (03800) bounced 4.3% to HK$1.96. Comtec Solar (00712) jumped 5.3% to HK$2.17.
In India, volatility ruled the roost in late trade as the 50-unit CNX Nifty reversed intraday gains and as the BSE Sensex gave away almost the entire intraday gains as European stock markets declined. The Sensex was provisionally up 4.92 points or 0.02%, up 123.27 points from the day's low and off 22.20 points from the day's high.
Indian index heavyweight Reliance Industries rose ahead it's Q1 June 2013 results today, 19 July 2013. Index heavyweight and cigarette major ITC rose marginally after striking a record high. Bank stocks dropped. In the pharma pack, Lupin scaled record high. Power equipment major Bhel dropped sharply. IT major TCS hit record high after reporting good Q1 results after trading hours on Thursday, 18 July 2013.
Bajaj Auto surged in volatile trade after declaring Q1 June 2013 result. HDFC fell after announcing Q1 June 2013 result. MMTC was locked at 5% upper circuit, with the stock recovering on bargain hunting after recent steep slide.
Elsewhere in Asia, Indonesia's Jakarta Composite rose 0.35% and Malaysia's KLSE Composite rose 0.35%. Singapore STI fell 0.15% and South Korea's KOSPI lost 1.62%.
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