Asia Pacific equity market drifted down on Thursday, 16 October 2014, in line with overnight losses in European and the US markets due to worries over the global economy weakness and the spread of the Ebola virus. The MSCI Asia Pacific Index slid 1.2% to 134.94, poised for its lowest close since March 25.
The United States stock markets declined on Wednesday amid waves of nervous after a steep sell-off in Europe and simmering concerns of global growth outlook and inflation. At one point, the Dow Jones industrial average had plunged 460 points, or 2.8%, though it later swung higher to close off 1.1%, or 173.45 points. The Standard & Poor's500 index fell 0.8%, or 15.21 points. European stocks were particularly hard hit on Wednesday, with Italian shares diving more than 4%. The German and French stock markets both fell by nearly 3%.
Risk aversion selloff triggered amid mounting fear that governments and central banks have failed to anticipate a recent weakening in the global economy - and that policy makers may now struggle to prevent their economies from stalling. As a result, the faltering global recovery after the 2008 financial crisis may now be in jeopardy, particularly in Europe.
Global economic worries deepened this week after China's consumer inflation fell to near five-year lows and U.S. producer prices declined for the first time in more than a year.
Among regional bourses
Nikkei drops to five-month low on stronger yen
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Headline equities of the Japanese market fell steeply, weighing the benchmark Nikkei 225 index down by 335.14 points to closed at 14738.38, a five-month low, while the Topix index of all first-section shares slipped 2.30%, or 28.17 points, to 1,195.50. The risk aversion selloff triggered as the yen appreciated against the dollar fueled by fears about the global economy and the Ebola epidemic.
Investors rushed into relatively safe assets such as the Japanese currency amid renewed worries about global economic growth, dragging the dollar down to Y105.19 overnight, its lowest since Sept. 8. At the close of Thursday trade, the dollar was at Y106.28, up from Y105.90 late Wednesday in New York. A weaker dollar is generally bad for exporter shares, as they have less room to cut prices on goods they sell overseas and can't buy as much yen with the profits they send back home.
Shares of banks and exporters were among the largest drags on the Tokyo market. Among banks, Mitsubishi UFJ Financial dropped 3.2% to 560 yen and Sumitomo Mitsui Financial Group Inc. declined 2.7% to 3,933.5 yen.
Among exporters, industrial robot maker Fanuc Corp slipped 1.1% to 17955 yen, while chip testing equipment maker Advantest Corp fell 3.4% to 1208 yen. Air-conditioner maker Daikin Industries fell 1.6% to 6038 yen. Canon Inc, the world's biggest camera maker, lost 1.7% to 3241 yen. Sony Corp., which gets 72% of its sales abroad, dropped 3.2% to 1789 yen. Panasonic Corp., which gets about half its sales outside of Japan, dropped 3.6% to 1140 yen. Toyota Motor Corp, the world's biggest automaker, slid 1.9% to 5879 yen. Honda Motor Co, a carmaker that gets 84% of sales abroad, dropped 3.9% to 3285 yen. Nissan Motor Co., which gets more than 70% of its revenue abroad, declined 1.4% to 953 yen.
Japan Display tumbled 18% to 359 yen after the company expects a loss of 10 billion yen ($94 million) in the year ending March, compared with a previous forecast for net income of 26.8 billion yen.
Aussie shares gain for third day
Australian share market closed higher for third second consecutive day after recovering intraday losses late afternoon, on the back of gains in energy, realty and financial blue-chip stocks. After dipping by as much as 1.6% in early trade on Thursday, the benchmark S&P/ASX 200 Index advanced 0.18% to 5254.90, while the broader All Ordinaries Index grew 0.12% to 5244.30. Turnover was relatively healthy with 1.96 billion shares worth of A$5.89 billion traded today.
Shares of banks and financial companies were higher, with top four lenders being major gainers. Commonwealth Bank of Australia jumped 0.6% to A$75.93, ANZ Banking Group 0.7% to A$31.58, Westpac Banking Corp 0.8% to A$32.73, and National Australia Bank 1% to A$32.88.
Energy stocks were star performer today, led by Woodside Petroleum, up 1.7% to A$39.66, after lifting its full year production forecast. Santos was 1.4% higher at A$12.64 and Oil Search rose 1.4% to A$8.58. Whitehaven Coal climbed 0.7% to A$1.505 after announcing a 40% increase in its quarterly coal production to 3.288 million tonnes for the three months to September 30.
Iluka Resources fell 2.4% to A$7.55 after revealing a 7% drop in revenue to A$491 million for the first nine months of the year, compared with the same period in 2013. The company said this was a reflection of lower-than-expected product sales and the timing of a shipment of a bulk titanium dioxide to customers, which fell outside of the quarter. The Australian dollar was also a major factor in Iluka's result, with the average exchange rate with the US currency sliding half a cent to US92.7 cents in the September quarter from US93.2 cents in the June quarter.
Ten Network shares gained 5.26% to A$0.20 after the struggling television business said tough conditions in the advertising market and poor ratings have pushed the company to post a full-year loss of A$168 million, an improvement of 40% compared with the previous year in which the network reported a A$284 million loss.
Shanghai Composite sinks 0.72%
Mainland China share market closed down after reversing intraday gain late afternoon, after senior People's Bank of China official warned Chinese credit growth is set to decline as the economy slows. All ten SSE sectors declined, with shares of technology, energy, telecom, utilities and material companies being major losers. The benchmark Shanghai Composite index declined 17.17 points, or 0.72%, to finish at 2356.50.
Sheng Songcheng, director of the bank's statistics department, said "in future, money and credit growth will tend to decline in line with the increase of economic aggregates and slowing potential economic growth.
The People's Bank of China said earlier on Thursday that September net new loans were 857.2 billion yuan, above the August's 702.5 billion yuan. M2 money supply grew 12.9% from a year earlier.
Shares of property developers declined on profit booking after Standard & Poor's said Chines property downturn will continue as buyers stay on the sidelines in anticipation of further price declines. Gemdale Corp. dropped 1.5% to 7.91 yuan. Poly Real Estate Group Co shed 2.1% to 5.69 yuan. China Vanke Co., the biggest developer, declined 1.1% to 9.31 yuan.
Shares of railway related companies advanced the most in Shanghai after the top economic planner announced approvals for new projects totaling 70.1 billion yuan ($11.4 billion) and on deals between China and Russia to build high-speed railways. The National Development and Reform Commission approved a 44.5 billion-yuan rail project in Yunnan province and a 25.6 billion-yuan plan to expand rail capacity in northern China. China CNR Corp jumped 9.9% to 5.97 yuan while CSR Corp jumped 10% upper limit to 5.82 yuan. China Railway Construction Corp. climbed 4.4% to 5.47 yuan.
Hang Seng sinks 1.03%
Headline shares of the Hong Kong market stumbled, dragging the benchmark Hang Seng Index down by 239.11 points, or 1.03%, to close at 22900.94, on tracking weak performance of Wall Street overnight and weakness in the mainland A-shares and other regional bourses. Almost all Hang Seng counters declined, with energy and financial stocks being major losers.
Tingyi shares rebounded 1.9% to HK$18.78, making it the top blue-chip winner, after the company said its manufacturing process has no connection with its parent and affiliate companies. Mengniu Dairy (02319) fell 2.7% to HK$32.65, becaming the worst blue-chip performer.
Oil majors were weaker on lower crude prices. CNOOC (00883) declined 2% to HK$12. PetroChina (00857) dropped 0.3% to HK$9.29. Sinopec (00386) slipped 1.8% to HK$6.51.
Anta Sports Products shares slumped 10.9% to HK$15.84 after the Chinese maker of athletic apparel said controlling shareholders are selling some shares.
Three new stocks started trading in Hong Kong on Thursday and their performances were mixed. Hin Sang Group International Holding Co, whose shares were oversubscribed more than 800 times, surged 16.1% to HK$1.37. Construction firm Sam Woo Construction Group, whose shares were oversubscribed more than 600 times went up 8% to HK$1.62. However, building services provider Nga Chun Holdings, closed 9.1% down at HK$1.
Sensex plunge on global slowdown worries
Indian stock market closed steep down on persistent concerns about the global economic recovery. The losses deepened after European markets opened, with the Stoxx Europe 600 Index tumbling 3.1%. The 30-share BSE index Sensex provisionally closed 350 points down at 2599.33 and the 50-share NSE index Nifty shed 115.80 points to 7748.20.
Hindalco Industries, the country's second-largest aluminum producer, fell to a five-month low as global commodity prices tumbled. Copper producer Sesa Sterlite Ltd slid to its lowest level since 19 May. State Bank of India paced losses among its peers. Tata Consultancy Services (TCS), India's largest software exporter, climbed before its earnings on Thursday. Developer DLF rebounded from a record 29% slump.
India's merchandise export rose 2.7% to $28.90 billion in September 2014, data released after market hours on Tuesday, 14 October 2014 showed. Exports of engineering goods exports jumped 20.2%, exports of gems & jewellery rose 11.1%, exports of readymade garments rose 15.9%, rice exports rose 17.7% and exports of organic and inorganic chemicals rose 7.1%. The merchandise imports surged at more than two-and-half year pace of 26% to $43.15 billion in September 2014. Thus, the trade deficit more than doubled to $14.25 billion in September 2014 from $6.12 billion in September 2013, while also galloped from $10.84 billion in August 2014.
Elsewhere in the Asia Pacific region-- South Korea KOSPI declined 0.37% to 1918.83. Taiwan's Taiex index declined 0.25% to 8633.69. Indonesia's Jakarta Composite index declined 0.23% to 4951.61. Malaysia's KLCI fell 1.07% to 1767.77. New Zealand's NZX50 sank 0.6% to 5132.02. Singapore's Straits Times index dropped 1.4% at 3154.21.
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