Asia Pacific share market closed down on Tuesday, 15 March 2016, after the Bank of Japan painted a gloomier view of the world's third-largest economy, and on caution before the conclusion of Wednesday's U.S. Federal Reserve interest-rate decision meeting. Sentiments were also hit by decline in commodities prices, with crude oil being one of the biggest drags after Iran said on Monday that it wouldn't participate in a production freeze sought by other nations.
With the global economy slowing and many countries facing deflationary pressures, investors' focus remained squarely on policy decisions from the world's major central banks. Up next on the central bank roster is the U.S. Federal Reserve on Wednesday and the Bank of England and the Swiss National Bank on Thursday.
Among Asian bourses
Australia Stocks close lower
Australian share market ended steep lower, due to profit booking across the board. Nine out of ten sectors lost ground, with energy and material stocks being major losers amid weakness in oil and iron ore prices. At the close, the benchmark S&P/ASX200 index tumbled 74.10 points, or 1.43%, at 5111.40, while the broader All Ordinaries index shrank 73.80 points, or 1.41%, to 5168.60.
Material and energy stocks were down as recent weakness in oil and iron ore prices. Mining giant BHP Billiton fell 3.4% to A$17.13, Rio Tinto 3.4% to A$42.97, and Fortescue Metals Group 1.6% to A$2.54. Oil Search lost 3.5% to A$6.95, Santos 3.3% to A$3.86, Origin Energy 5% to A$4.94, and Woodside Petroleum 3.9% to A$25.72.
Ports and rail freight company Asciano leapt 1.3% after it received a A$9.1 billion takeover offer by Qube Holdings, Canada's Brookfield Asset Management Inc and international partners.
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The Australian Bureau of Statistics found motor vehicle sales edged down 0.1% in February following a 0.4% rise in January, while the Reserve Bank of Australia's meeting minutes showed the central bank was keeping a way eye on market volatility and the local jobs market. ANZ's consumer confidence index rose to its highest level in 14 months, with Australians more upbeat about their finances.
Nikkei ends down on BOJ inaction
Japan share market ended down on Tuesday, 15 March 2016, as investors took profits after Bank of Japan has kept monetary policy steady and amid caution ahead of the two-day US Federal Reserve monetary policy meeting. Notable decliners comprised insurance, banking, and mining-linked shares. The 225-issue Nikkei Stock Average declined 116.68 points, or 0.68%, to end at 17117.07. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 7.87 points, or 0.57%, to close at 1372.08.
The Bank of Japan maintained its pledge to increase base money at an annual pace of 80 trillion yen. It also left unchanged a 0.1% negative interest rate it applies to some reserves financial institutions park at the BoJ. The BOJ also decided to exempt money reserve funds (MRFs) from the minus 0.1% rate and instead apply a rate of zero starting in May. "Japan's economy continues to recover moderately as a trend, although exports and production have been sluggish due mainly to the effects of slowing emerging markets growth," the BoJ said in a statement announcing the policy decision, offering a slightly bleaker view than in January.
Shares of export-related companies declined, hurt by stronger yen, with Toyota Motor Corp shares ending 1.8 lower and Panasonic Corp share falling 1.4%.
Shares of real estate firms, which have benefitted from the BOJ's negative rate policy that boosts housing investment with lower mortgage rates, dropped after the BOJ did not cut rates further. Tokyo Tatemono fell 2.9% to 1,423 yen and Mitsui Fudosan declined 2.7% to 2,776 yen.
Fusion Partners plunged 10.1% to 518 yen after the IT services firm said Monday it will issue new shares to raise capital, amid investor concern the move will dilute the ownership of current shareholders.
Kandenko dropped 5.2% to 791 yen after the electrical engineering firm said Monday it will issue convertible bonds next month, also raising dilution concern among investors.
China Market ends higher
Mainland China stock market ended above the boundary line after recouping intraday losses on Tuesday, 15 March 2016, led by gains in finance, consumer and real estate shares amid speculation about state-backed funds intervention to support the market during annual policy meetings. The benchmark Shanghai Composite Index rose 0.17%, or 4.87 points, to 2864.37. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 8.59 points, or 0.3%, to 3074.78.
Premier Li Keqiang was set to address the press at the closing of the National People's Congress meeting on Wednesday. The market is waiting to see whether some new measures will come from the government to stimulate the economy.
PetroChina Co., long considered a target of government buying because of its large index weighting, climbed 0.5%. China Life Insurance Co., the fifth-most heavily weighted stock, jumped 6.3%. China's central bank has drafted rules for a levy on foreign-exchange trading that would help curb currency speculation.
Hong Kong Stocks end softer
The Hong Kong stock market declined, following mixed closes of the US equity markets overnight and on caution before the conclusion of Wednesday's U.S. Federal Reserve meeting. The benchmark Hang Seng Index declined 146.57 points, or 0.72%, to 20288.77 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 80.64 points, or 0.93%, to 8605.63 points. Turnover reduced to HK$56.5 billion from HK$72.6 billion on Monday.
Shares of Want Want (00151) slid 4% to HK$5.43, as the snack manufacturer reported its 2015 earnings of US$542 million, representing a decline of 13%.
Oil majors were all lower as US oil future prices declined 3.4% on news that Iran would not freeze production, and the rising US crude oil inventory. CNOOC (00883) dipped 3% to HK$8.82. Sinopec (00386) fell 2% to HK$4.78. PetorChina (00857) slipped 1% to HK$5.31.
Wharf (00004) has agreed to buy properties in Wheelock House for HK$6.2 billion from Wheelock (00020) and Peter Woo. Both Wharf and Wheelock were down 0.7% to HK$41.65 and HK$33.35 respectively.
HK Electric-SS (02638) dropped 2% to HK$6.5 after hitting an intra-day high of HK$6.68 earlier as the company reported its distributable income amounted to HK$3.54 billion. Power Assets (00006) also softened 1% to HK$76.4.
BAIC Motor (01958) said it plans to buy a 35% stake in Fujian Benz Automotive. It surged 6% to HK$6.31. But other automakers were lower. BYD (01211) edged down 0.5% to HK$41.95. Dongfeng Group (00489) sank 3.2% to HK$9.38.
Sensex, Nifty hit lowest closing level in almost 2 weeks
Pharma stocks and index heavyweights HDFC and ITC led losses as the two key benchmark indices snapped two-day winning streak. The barometer index, the S&P BSE Sensex, fell 253.11 points or 1.02% to settle at 24,551.17. The 50-unit Nifty 50 index fell 78.15 points or 1.04% to settle at 7,460.60. The decline on the domestic bourses mirrored a slide in global stocks. The Sensex and the Nifty, both, hit their lowest closing level in almost two weeks.
Index heavyweight and housing finance major HDFC edged lower on media reports that a foreign brokerage has downgraded the stock to sell from neutral. Lupin fell sharply after the company clarified during trading hours that the United States Food and Drug Administration (USFDA) inspected its Goa facility last week and cited 9 observations. Procter & Gamble Hygiene and Health Care edged lower after the company announced that it has discontinued the manufacture and sale of its OTC drug Vicks Action 500 Extra with immediate effect.
Shares of public sector banks edged higher as the latest data showing easing of headline inflation in February 2016 gave rise to expectations for a policy rate cut at the Reserve Bank of India's next policy meeting on 5 April 2016.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 added 0.2% to 6577.82. Taiwan's Taiex index fell 16% to 8611.18. South Korea's KOPSI slipped 0.1% to 1969.97. Malaysia's KLCI sank 0.6% to 1690.92. Singapore's Straits Times index fell 0.3% at 2839.44. Indonesia's Jakarta Composite index dropped 0.6% to 4849.78.
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