Headline equities of the Asia Pacific market declined on Monday, 12 January 2015, on tracking soft lead from Wall Street last week after an unexpected drop in American wages clouded the outlook for interest rates. Meanwhile, worries about the impact of slide in the global crude oil prices and doubt over viability of Europe's stimulus plans to solve the euro region's economic woes further dented risk sentiments.
Shares in Asian market mostly started the day with soft tone on tracking a negative lead from the US where the Dow Jones Industrial Average ended down 1%, while the S&P 500 shed 0.8% after December's nonfarm payrolls report gave a mixed view of the economy. Figures from the Labor Department showed the US economy added 252,000 to payrolls last month, after generating an unexpectedly strong 353,000 jobs in November. The unemployment rate, meanwhile, dropped to 5.6%.
Meanwhile, fall in iron ore prices and slump in crude oil prices intensified selloff pressure. West Texas Intermediate crude dropped 1.6% to $47.59 a barrel today, after sinking 8.2% last week. Brent oil fell 1.7% to $49.27 per barrel. The benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $69.80 a tonne, down 1.1% from its previous close of $70.60 a tonne.
Risk sentiments dented further amid concern Europe's stimulus plans may not solve the euro region's economic woes. The ECB is studying models for buying as much as 500 billion euros ($591 billion) of investment-grade assets, according to media reports.
Trading in US index futures indicated that the Dow could gain 13 points at the opening bell today, 12 January 2015.
Among Asian bourses
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Australia stocks fall on weak offshore lead, commodity prices
Australian share market finished weaker, on tracking cues from a negative finish on Wall Street last week. Meanwhile, fall in iron ore prices and slump in crude oil prices also dented sentiments. The benchmark S&P/ASX 200 Index declined 0.78% to 5422.70 and the broader All Ordinaries Index shed 0.75% to 5399.50.
Shares of iron-ore mining companies were also down, on tracking weakness in iron-ore prices. Resources giant BHP Billiton was fell 2.3% to A$28.48, while main rival Rio Tinto slipped 1.5% to A$58.46. Australia's third largest iron ore miner Fortescue Metals Group tanked 3.2% to A$2.69.
Energy stocks declined the most in Sydney, after further fall in the oil price. Australia's biggest dedicated oil producer Woodside Petroleum fell 2% to A$36.31. Santos lost 5.2% to A$7.29. Origin Energy slipped 3.3% to A$11.13.
China market stumbles on liquidity woes, ahead of new offerings
Mainland China share market stumbled for a third day, as investors continued offloading shares to raise funds for upcoming new listings this week. Meanwhile, worry of liquidity squeeze also fuelled selloff in the domestic bourses. The Shanghai Composite declined 1.71% to 3229.32.
Chinese shares faced downward pressure as investors rushing to hold more cash for 22 new share offerings this week. It will be the eighth round, and the largest wave of new share offerings, since last June when the China Securities Regulatory Commission, the securities watchdog, restarted the initial public offering (IPO) market. For five trading days this week, Wednesday alone will see 10 new offerings, Thursday to have another 6 offerings, while each of the other three trading days will have 2 new offerings.
Figures released by China's data company Wind indicated that the 22 new IPOs are expected to raise a total fund of 12.2 billion yuan. Also, separate figures released by BOC International indicated 22 new offerings were expected to lock up a bidding fund of 2.28 trillion yuan.
Shares of Aluminum Corp. of China slumped 6.1% and Poly Real Estate Group Co. dropped 3% on profit booking after strong performance over the past year. PetroChina Co., the biggest energy company, retreated 3.7% before trade data tomorrow.
Hang Seng ends 106.51 points up
Hong Kong share market closed volatile session modest higher, with shares of Cheung Kong Holdings and Hutchison Whampoa being major gainers, boosted by restructuring theme. The Hang Seng Index ended 106.51 points, or 0.45%, up at 24026.46, off an intra-day high of 24118.59 and low of 23905.01. Turnover amounted to HK$89.94 billion.
Shares of Cheung Kong Holdings rose 14.7% to HK$143.20 and Hutchison Whampoa surged 12.5% to HK$98.35 after Asia's richest man Li Ka-shing announced a restructuring of his business empire to create better value for shareholders.
Shares of Cheung Kong Holdings rose 14.7% to HK$143.20 and Hutchison Whampoa surged 12.5% to HK$98.35 after Asia's richest man Li Ka-shing announced a restructuring of his business empire to create better value for shareholders.
Macau gaming players were pressured. Galaxy Ent (00027) slipped 3% to HK$38.95. Sands China (01928) fell 0.7% to HK$36.55.
Auto makers were higher. Geely (00175) jumped 4.3% to HK$2.91. Dongfeng Motor (00489) gained 1.9% to HK$11.52. Great Wall Motor (02333) slipped 2.2% to HK$41.95.
Sensex trims losses in afternoon
A bout of volatility was witnessed as key benchmark indices trimmed losses after extending intraday losses in early afternoon trade. The volatility on the domestic bourses materialized as global crude oil prices dropped further. Investors fear that the sharp slide in global crude oil prices over the past few months signals a weak global economy. At 13:15 IST, the S&P BSE Sensex was down 55.68 points or 0.2% at 27,402.70. The CNX Nifty was down 10.55 points or 0.13% at 8,273.95.
Shares of public sector banks advanced. Adani Enterprises rose after the company said it has signed a Memorandum of Understanding with SunEdison Inc., to establish a joint venture to build the largest, vertically integrated solar photovoltaic manufacturing facility in India with an investment of around $4 billion. Max India advanced after the company said that its board of directors has delegated authority to its Investment & Finance Committee, to examine options for corporate restructuring of the company.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index declined 0.4% to 9178.30. South Korea KOSPI was down 0.2% to 1920.95. New Zealand's NZX50 rose 0.5% at 5609.80. Singapore's Straits Times index rose 0.1% at 3341.83. Indonesia's Jakarta Composite index fell 0.5% to 5190.51. Malaysia's KLCI slipped 0.1% to 1730.69. Japanese markets closed for the Coming of Age Day holiday.
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