Asia Pacific shares closed mostly higher on Wednesday, 08 April 2015, ahead of companies' quarterly earnings in coming weeks. Also, risk sentiment was boosted by growing expectations of delayed start to any tightening by the US Federal Reserve.
Investors are hoping that the Federal Reserve would hold off its interest rate hike after weak US jobs data. The Fed will release minutes from its March 17-18 monetary policy meeting on later in the global day, which should shed light on its internal debate over the rate hike plans. The Fed's updated economic and rate forecasts in March showed policymakers saw the US economy growing at a more moderate rate than previously and Fed chair Janet Yellen said first-quarter data pointed to softer growth.
Among Asian bourses
Nikkei hits 15-years peak
Japanese share market advanced to fresh 15-year peak, as persistent buying in large-cap shares, after Bank of Japan maintained its massive stimulus and its optimistic view of the economy. The yen softening at 120 yen against the US dollar also contributed to boosting the market. The benchmark Nikkei 225 index inclined 149.27 points, or 0.76%, to finish at 19789.81, its highest level since April 2000, while the broader Topix index of all first-section shares advanced 9.92 points, or 0.63%, to 1588.47.
As widely expected, the Bank of Japan (BoJ) board stuck to its majority view that it is still on track to achieve its price goal of 2% inflation at its latest policy meeting on Wednesday, maintaining its key policy of buying 80 trillion yen ($665 billion) of assets annually. The BoJ has stood pat on policy since expanding stimulus in October last year to prevent slumping oil prices, and a subsequent slowdown in inflation, from delaying a sustained end to deflation.
Energy shares were the biggest gainers in the Topix crude oil rose to the highest level this year. Oil explorer Inpex added 2.2% to 1417.50 yen, while Japan Petroleum Exploration Co. rose 3.2% to 4380 yen.
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Carmakers were mostly lower, with Fuji Heavy Industries slumping 2.2% to 4040 yen after UBS lowered its rating to sell from neutral, citing a negative environment for the automobile sector. The brokerage also lowered its rating for Toyota Motor Corp to neutral from buy, sending shares sliding 0.5% to 8372 yen.
Dentsu Inc. jumped 6.1% to 5780 yen after the advertising agency reported 2.5% rise in sales from a year earlier and as Citigroup Inc. upgraded its price target for the company by 18% to 6000 yen.
Industrial-equipment maker Kawasaki Heavy Industries climbed 2.5% to 623 yen after reports that growing sales of airplane parts to Boeing Co. and recovering demand for motorcycles from emerging-market countries should boost profits by 16% to 100 billion yen in the current fiscal year.
The finance ministry said on Wednesday that Japan surplus in the current account, the broadest measure of Japan's trade with the rest of the world, stood at Y1.44 trillion in February before seasonal adjustment, the highest since September 2011. The current account measures trade in goods, services, tourism and investment.
Australia market jumps 0.6%
The Australian share market closed higher, on the back of gains in the shares of energy, resources and materials sectors. But a mixed performance by the big banks kept the overall market in check. The benchmark S&P/ASX 200 Index advanced 34.70 points, or 0.59%, to 5960.70, while the broader All Ordinaries Index grew 35.10 points, or 0.6%, to 5928.30. Market turnover was healthy, with 1.52 billion shares changing hands worth of A$4.22 billion.
Shares of energy, resources and mining companies were major beneficiaries on the Australia Stock Exchange, thanks to recovery in iron-ore and oil prices. Woodside Petroleum added 2% to A$35.07, Santos 4.4% to A$7.41, Origin Energy 1.9% to A$11.55, and Oil Search 5.7% to A$7.64. Beach Energy jumped 6% to A$1.14 after signalling sales of some infrastructure assets may be on its agenda. BHP Billiton climbed up 1% to A$30.74 and Rio Tinto rose 1.5% to A$57. Fortescue Metals Group added 8.1% to A$1.94.
Gold Miner Newcrest advanced 2.2% to A$14.23. St Barbara jumped 23% to A$0.27 after it said it had bolstered its cash reserves and lifted gold production to record rates.
Evolution Mining jumped 1.1% to A$0.915 after the company said it had accelerated debt repayments as the company reported record free cash flow despite a fall in quarterly gold output. Australian gold producer made a voluntary loan repayment of A$35 million last fiscal quarter, reducing outstanding debt in its corporate revolving credit facility by 28% to A$91.8 million. Evolution reported free cash flow of A$27 million for the three months through March, underpinned by a reduction in operating costs. Gold output was down 9% on-quarter to 103,305 troy ounces.
Emeco Holdings rose 4.6% to A$0.115 after closely held Orionstone approached the Australian mining and construction equipment rental company about a possible merger.
Financial stocks were mixed, on disappointment from the Reserve Bank of Australia's (RBA) decision to hold borrowing costs steady at a record low of 2.25% yesterday. Commonwealth Bank fell 0.2% to A$94 and ANZ Banking Group 0.3% to A$36.79, while Westpac Banking Corp rose 0.3% to A$39.76 and National Australia Bank 0.3% to A$39.45.
Shanghai Composite hits fresh seven year highs
Mainland China benchmark Shanghai Stock Exchange closed above 4000 points, a key psychological resistance level, for the first time since early 2008, as investors sentiments boosted by ample liquidity and strong confidence in the economy. The fresh seven-year high of the share market was reached in spite of an upcoming wave of new share offerings which will reduce liquidity. The Shanghai Composite Index inclined 33.43 points, or 0.84% to 3994.81 at the close, its highest level since March 2008. The CSI300 index, the largest listed companies in Shanghai and Shenzhen, grew 35.76 points, or 0.84%, to 4295.80.
Last week, China's securities regulator approved 30 IPOs for April, compared with 24 in each of the previous two months, raising concerns that stepped-up share sales could hurt the market liquidity as it could lock up as much as 3.7 trillion yuan in subscription funds over the next two weeks. But Xinhua said in an article that the current pace of IPOs has negligible impact on the stock market, as regulators hope to channel some of the heavy money inflows into the real economy. To bolster the lukewarm real economy, the central bank has cut the benchmark interest rates twice and banks' reserve requirement ratios (RRR) once since November of 2014.
Shares of rail sector expanded the most in Beijing market, with China's high speed rail manufacturers China North Railway (CNR) and China South Railway (CSR) both surging by the daily limit of 10%, after the train makers received government approval for their proposed merger.
Passenger arrivals and departures recorded at Chinese airports hit 831.5 million in 2014, representing a rise of 10.2% year on year, according to data released by the Civil Aviation Administration of China on Tuesday. More than 760.6 million trips were recorded for domestic routes, up 10.1% year on year. That was compared with 70.9 million trips for international routes, up 11.7%. Airports in Beijing, Shanghai and Guangzhou accounted for 28.3% of all those trips last year.
The State Administration of Foreign Exchange said in a statement on Tuesday that China's total foreign debt climbed an annual 2.5% in 2014 to US$895.5 billion. The outstanding debt included medium and long-term debt of US$274.4 billion and short-term foreign debt of US$621.1 billion.
Hong Kong market surges 3.8%
Hong Kong stock market finished the session at seven-year high in heavy turnover, catching up with an explosive rally in Mainland China A-share market as well as flood of cash from China surging into the city and amid speculation of delayed start to any tightening by the U.S. Federal Reserve. The Hang Seng Index ended up 961.22 points or 3.8% to 26236.86, off an intra-day high of 26247.63 and day low of 25640.04. The benchmark index touched a highest level since May 2008. Turnover increased to HK$250.03 billion from HK$124.74 billion on last Thursday. The local stock market closed on Friday through Tuesday for Easter holidays.
The sharp rally in the city's bourse was supported by Chinese investors who used up the entire 10.5 billion yuan daily investment quota for the first time. The daily quota allows mainland traders to buy Hong Kong stocks under the Shanghai-Hong Kong stock connect launched last November.
Shares of Alibaba Pictures Group, the movie division of Chinese e-commerce giant Alibaba Group Holding, jumped 26.6%, boosted by an announcement regarding injection of entertainment assets from its parent company.
Sensex, Nifty climbs
Indian benchmark indices advanced for the fourth straight session, with IT and PSU OMCs stocks being major gainers. The barometer index, the S&P BSE Sensex, and, the 50-unit CNX Nifty, both settled at their highest level in more than three weeks. The S&P BSE Sensex rose 191.16 points or 0.67% to settle at 28,707.75. The CNX Nifty advanced 54.10 points or 0.62% to settle at 8,714.40
Realty stocks gained after the Union Cabinet chaired by the Prime Minister, Narendra Modi, yesterday, 7 April 2015, gave its approval to amendments to the Real Estate (Regulation and Development) Bill, 2013 pending in the Rajya Sabha, and approved amendments proposed in the Bill. Index heavyweight Reliance Industries advanced. Another index heavyweight and cigarette major ITC also edged higher. Housing Finance major HDFC edged lower. Meanwhile, ICICI Bank announced before market hours reduction in base rate by 0.25% to 9.75% per annum with effect from 10 April 2015. SBI, Axis Bank and HDFC Bank have also cut lending rates as per media reports.
Meanwhile, strong response to Rural Electrification Corporation (REC)'s offer for sale on stock exchanges today, 8 April 2015 also boosted sentiment. REC's OFS was subscribed 5.11 times. Bids were received for a total of 25.24 crore shares till 15:25 IST compared with an offer for sale of 4.93 crore shares by the government of India in REC, as per the live bidding data from BSE.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 234.09 crore from secondary equity market yesterday, 7 April 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) sold shares worth a net Rs 326.06 crore yesterday, 7 April 2015, as per provisional data.
Elsewhere in the Asia Pacific region: South Korea KOSPI added 0.6% to 2059.26. Taiwan's Taiex fell 0.73% to 9571.97. New Zealand NZX50 was up 0.07% to 5859.71. Indonesia's Jakarta Composite index sank 0.77% to 5480.59. Singapore's Straits Times index fell 0.15% at 3460.53. Malaysia's KLCI slipped 0.33% to 1850.31.
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