Asia Pacific share markets were mostly down on Monday, 09 November 2015, as risk sentiments poured down on the back of below-view trade figures from China and after Friday's strong U.S. jobs report solidified expectations that the U.S. Federal Reserve will raise interest rates in December.
China's General Administration of Customs said on Sunday that October exports fell 6.9% year-over-year in dollar terms, after a drop of 3.7% in September. Imports in October fell by a sharper-than-expected 18.8% from a year earlier, following a 20.4% decline in September. China's trade surplus has widened to $61.64 billion in October from $60.3 billion in September.
According to figures released by the Bureau of Labor Statistics on Friday, nonfarm payrolls grew 271,000 in October, registering a sharp jump from weak August and September numbers. The headline unemployment rate declined to 5.0% from 5.1%. An unexpectedly strong October jobs report fueled expectations the U.S. Federal Reserve will raise interest rates as early as next month after keeping them close to zero since the 2008 global crisis.
Among Asian bourses
Materials and resources stocks fell hard, with drop was being led by BHP which was down 5.6% to A$21.42, its lowest level since late 2008. The world's biggest miner has shed nearly 9% in value since a mine disaster in Brazil late Thursday left up to 29 dead. BHP Billiton said it was reviewing its iron ore production guidance for fiscal 2016 in the wake of the disaster. Rio Tinto followed, falling 3.5% to A$49 and Woodside Petroleum declined 2.5% to A$29.23. Oil and gas producer Santos was in a trading halt as it sought to raise A$3.5 billion through share and asset sales, and appointed an industry veteran as its new chief executive. Santos last traded at A$5.91.
Broadcaster Nine Entertainment descended 2.3% to A$1.545 after the company announced that TV guru Hugh Marks would take over from David Gyngell.
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Nikkei soars 2% on weaker yen
The Japanese share market closed higher, with export related stocks leading rally on a weaker yen after strong U.S. employment data brought the prospect of a rise in U.S. interest rates closer. The Nikkei Stock Average advanced 377.14 points, or 2%, to end at 19642.74 points. The broader Topix index has gained 1.75%, or 27.38 points, to 1590.97 at the close, its highest level since Aug. 20.
Shares of exporters ended stronger due to yen weakening against greenback. The yen weakened 1.1 per cent on Friday and extended the loss by another 0.1 per cent early on Monday, to 123.3 per dollar - its weakest valuation since August 21. A weak yen makes Japanese exporters more competitive overseas and inflates the value of their repatriated profits. Toyota which gets 78% of its auto sales abroad, added 1.6%. Camera and medical device maker Olympus Corp. surged 17%, after profit at the medical-systems maker topped estimates.
Banks and financials were also higher as sentiment was aided by a report saying Japan's three largest banks would likely accelerate the unwinding of cross-held shares and that they plan to provide more details when they report first-half earnings. Mitsubishi UFJ Financial Group Inc gained 5%, Sumitomo Mitsui Financial Group Inc rose 4.7% and Mizuho Financial Group Inc added 3.4%.
Nippon Telegraph and Telephone Corp shares soared 5.4% on raised guidance for the financial year ending in March.
Toshiba Corp tumbled 6.7% after the company reported a half-year operating loss and announced it was suing five former executives. Toshiba said on Saturday it sued five former executives for damages over their alleged roles in a huge accounting scandal, as it announced a deep six-month operating loss. Meanwhile, Toshiba also announced a whopping operating loss of 90 billion yen for six months to September compared to a year-earlier 137.8 billion yen profit.
China market surges 1.58% on IPO resumption news
The Mainland China stock market ended stronger, as risk sentiments underpinned by news that securities regulator plan to resume initial public offerings (IPO) after a near four-month halt. Most of the sectors advanced, with financial blue-chip shares being major gainer, as investors piled into stocks which had been beaten down in the midst of the equity correction. The Shanghai Composite Index advanced 1.58%, or 56.85 points, to close at 3646.88 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.82%, or 39.17 points, to close at 2191.60. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, was up 2.37%, or 63.21 points, to close at 2724.62.
Shares of financial blue-chip shares was top gainer in the Beijing, as investors piled into stocks which had been beaten down in the midst of the equity correction and China's plan to lift a five-month freeze on new share sales. Industrial & Commercial Bank of China advanced 3.2% on Monday, while China Construction Bank Corp. jumped 4.7%. Founder Securities climbed up by the daily maximum allowable of 10% and Everbright Securities tacked on 4.6%.
Hong Kong market ends softer
Hong Kong stock market ended down in volatile trade after strong U.S. employment data Friday brought the prospect of a rise in U.S. interest rates closer. But losses were limited on news that the CSRC considers allowing the relaunch of A-share IPOs by year end. The benchmark Hang Seng Index fell 140.01 points, or 0.61%, to 22727.32 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, declined 49.56 points, or 0.47%, to 10506.41 points.
Shares of brokerages houses went up, underpinned by the securities regulator's move on Friday to allow initial public offerings (IPOs) to resume after a more than 3-month halt. GF Sec (01776) jumped 2.5% to HK$17.74. Haitong Sec (06837) put on 1.6% to HK$15.02. CITIC Sec (06030) gained 0.6% to HK$19.46.
China International Capital Corp (CICC) shares surged 7.4% above the IPO price of HK$10.28 to HK$11.04 in its market debut after raising $811 million from its IPO.
Sensex hovers in red
Fears of a setback to the economic reforms process in the wake of by Bharatiya Janata Party's (BJP) drubbing in Bihar assembly elections and prospects of hike in interest rates by the US Federal Reserve at its next momentary policy review in December 2015 pulled key benchmark indices lower. At 13:25 IST, the barometer index, the S&P BSE Sensex, was off 301.48 points or 1.15% at 25,963.76. The 50-unit Nifty 50 index was off 91.95 points or 1.16% at 7,862.35. The Sensex was currently hovering below the psychological 26,000 level. It had reclaimed that mark for a brief period in mid-morning trade. Earlier, the Sensex slipped below the psychological 26,000 level after a weak opening triggered by BJP's drubbing in Bihar assembly elections.
Concerns about pick up in inflation also weighed on the domestic bourses after the finance ministry announced the imposition of a Swachh Brarat Cess at the rate of 0.5% on all services presently liable to service tax. The Swachh Brarat or Clean India cess will be applicable from 15 November 2015. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives.
Meanwhile, a poor showing of BJP-led National Democratic Alliance (NDA) in the Bihar assembly elections has raised concerns among investor that the opposition parties may disrupt the Centre's economic reform process. The pre-poll alliance between the Janata Dal (United), Rashtriya Janata Dal and Congress scored a stunning win in the Bihar assembly elections for which counting took place yesterday, 8 November 2015, dealing a major blow to the ruling NDA government at the Centre. The NDA won just 58 seats of which the BJP won 53 seats in the Bihar assembly elections. With the opposition, emboldened by the victory in Bihar, unlikely to let Parliament function smoothly in the winter session, the fate of key legislation aimed at furthering the government's reform agenda remains uncertain. The BJP-led NDA has a comfortable majority in Lok Sabha, but lags in numbers in the Rajya Sabha, the upper house, where members are elected by the strength of legislators in the states. The NDA was hoping that a good performance in some of the state assembly elections would help it consolidate its position in the Rajya Sabha, which in turn could help it push through important legislation in the upper house. At present, the Congress is the single largest party in the Rajya Sabha with 67 seats. The BJP has 48 members in the 245-member house and the NDA 60 members.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index declined 0.6% to 8642.48. South Korea's KOPSI dropped 0.8% to 2025.70. Singapore's Straits Times index lost 0.4% at 2998. Indonesia's Jakarta Composite index slipped 1.6% to 4494.92. Malaysia's KLCI lost 0.2% to 1681.91. New Zealand's NZX50 declined 0.4% to 6047.891.
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