Asia Pacific Market: Stocks end mixed

Asia Pacific share market closed mixed on Friday, 08 September 2017, as positive lead from robust Chinese trade data offset by concerns over possible fresh North Korean missile launch during weekend.

China's growth in exports eased in August as the yuan strengthened, while imports beat expectations, pointing to a stronger appetite for commodities. China's August imports grew at a better-than-expected pace of 13.3 per cent from a year earlier, while exports rose 5.5 per cent, narrowing the trade surplus to US$42 billion from July's US$47 billion, according to data released by the General Administration of Customs on Friday.

Among Asian bourses

Australia Stocks end softer

Australian equity market finished session lower, hurt by declines the big banks and by a string of companies going ex-dividend. At the close, the S&P/ASX 200 index finished 17.28 points, or 0.35, lower at 5,672.60, while the broader All Ordinaries index closed down 14.41 points, or 0.25%, at 5739.40. Participation on Friday was below average with around 2.9 billion transactions being measured by the ASX valued at A$5.01 billion. At the close 569 shares were higher, 553 were lower and 410 were unchanged. For the week, S&P/ASX 200 index fell 0.9%.

The financials were the biggest drag after the banking regulator spelled out plans for a major investigation into back-to-back scandals at Commonwealth Bank of Australia. The Australian Prudential Regulation Authority said on Friday it would dig deeper to look into whether CBA's corporate structure had enabled a series of scandals that have hurt the reputation of the nation's biggest bank by market value.The "Big Four" banks - Westpac, Commonwealth Bank, National Australia Bank and Australia and New Zealand Banking Group - all ended lower.

Material and energy stocks also lost ground with miner Fortescue Metals Group falling 2.2% and Woodside Petroleum declining 0.9%. However, the gold index finished up after prices of the yellow metal hit a fresh one-year high in early trade, despite concerns over a higher royalty payment. Gold miner Northern Star Resources rose 0.7%.

Syrah Resources (SYR) topped the ASX 200 gainers for the day after announcing that it had signed a binding sales agreement with Jixi BTR Graphite Industrial, a wholly owned subsidiary of Shenzhen BTR New Energy Materials. BTR is the world's largest manufacturer and leader of technology development of battery anode materials for lithium-ion batteries. BTR supplies battery anode materials to the Chinese domestic market and export markets, servicing its major customers in battery, electric vehicle and energy storage sectors. The agreement is for 30,000 tonnes of graphite from the SYR's Balama operation in the first year of production.

Shares in packaging provider, Amcor (AMC) were 1.6% lower after responding to press speculation regarding a potential acquisition of One of its peers, Bemis which produces flexible and rigid plastic packaging for a range industries including food, consumer products, medical and pharmaceutical. Bemis claims to have 59 facilities in 12 countries worldwide, employing 17,500 employees. Amcor said it is 'continually reviewing opportunities to improve shareholder value and, as part of that process, regularly assesses a range of strategic options'.

Nikkei falls on yen appreciation

The Japan share market closed down as investors sentiment dampened by the yen's strengthening against the dollar and concerns over possible fresh North Korean missile launch during weekend. The benchmark Nikkei 225 average fell 121.70 points, or 0.63%, to close at 19,274.82. The Topix, including all first-section issues, ended down 4.70 points, or 0.29%, at 1,593.54

Export-linked issues declined by appreciation in the yen. The dollar fell from 108.49 yen in New York to 107.64 yen, the lowest since November last year as demand for the safe-heaven yen grew with the possibility of a fresh missile launch at the weekend. Camera maker Olympus dropped 2.89% to 3,690 yen while Panasonic slid 0.94% to 1,468.5 yen.

Banks were lower on worries over low interest rates. Mitsubishi UFJ lost 0.50% to 653.6 yen and Sumitomo Mitsui Financial slid 0.37% to 4,000 yen. Insurers, including Sompo Holdings, Sony Financial, MS&AD and Dai-ichi Life, regional bank Concordia Financial and megabank group Resona, were also downbeat on the U.S. interest rate drop. Home builder Sekisui House met with selling on concern over future earnings although it posted a larger profit for the first half of fiscal 2017.

China Market ends down

The Mainland China equity market continued on its downward path as defensive consumers stepped back from a rally. However, losses were limited as some investors were pumping fresh money into a market buoyed by solid economic growth and a resurgent yuan. The SSE sectors were mixed, with the airline sector outperforming on the back of strong gains in the yuan. The CSI 300, which tracks large companies listed in Shenzhen and Shanghai, inched down 0.1% to 3,825.99. The Shanghai Composite Index was flat at 3,365.24 points, while the Shenzhen Composite Index rose 0.2% to 1,975.87. For the week, both CSI300 and SSEC shed 0.1%.

Airline shares jumped, as investors expected the sector, typically with heavy US dollar debt, to benefit from a stronger yuan. Shanghai-traded China Southern Airlines rallied 4.5% to 9.06 yuan, Air China advanced 2.5% to 9.32 yuan, and China Eastern Airlines rose 2.2% to 7.08 yuan.

China's securities regulator on Friday published draft rules that would restrict borrowing using stocks as collateral, part of efforts to reduce leverage in the financial system and ward off systemic risks. The draft rules on the so-called stock pledged repurchase business, published by the Shanghai and Shenzhen stock exchanges, will curb leverage and are aimed at reducing risk in the event of a sharp decline in stock prices. The value of shares that shareholders have pledged as collateral to borrow money, mainly from brokerages, has quadrupled over two years to more than 6 trillion yuan ($898 billion), or a tenth of the total value of China's stock market, according to estimates from Bank of America Merrill Lynch and BOCOM International.

Hong Kong Stocks end higher; realty leads

The Hong Kong stock market finished higher, helped by solid China economic data, with property developers leading the broader market rally on hope that the Hong Kong government to launch a new affordable housing scheme to benefit young, first-time home buyers. The Hang Seng Index closed on 27,668.47, up 0.5%, or 145.55 points. The Hang Seng China Enterprises Index, known as the H-share index, rose 0.5%, or 50.92 points, to 11,149.64. Daily turnover decreased 17% to HK$83 billion from Thursday.

Hong Kong property developers advanced after Hong Kong chief executive Carrie Lam Cheng Yuet-ngor suggested the government will soon launch the Starter Homes scheme to provide subsidised housing to local first home buyers. The Government's new affordable housing policy was analyzed to benefit the local developers. Analysts believed that farmland would have to be converted to become land for development. Developers with large farmland holdings would benefit the most. Bank of America Merrill Lynch said the scheme will have a positive impact on local property developers, as it may speed up the conversion of farm land owned by developers into residential land. Sun Hung Kai Properties, Cheung Kong Property, New World Development, and Henderson Land Development gained 4.1%, 3.6%, 5.7%, and 5.8%, respectively. They contributed a combined gain of 63 points to the Hang Seng Index.

Handset stocks continued to fall after reports that Apple's new iPhone, due to be released next Tuesday, had hit production glitches and could lead to supply shortfalls and shipping delays. AAC Technologies and Sunny Optical, both of which supply smartphone components for Apple, fell 1.1% and 2.7% to HK$136 and HK$108.

India Stocks end mixed

The key benchmark indices settled with small gains in a range-bound session of trade. The barometer index, the S&P BSE Sensex, rose 24.78 points or 0.08% to settle at 31,687.52. The Nifty 50 index rose 4.90 points or 0.05% to settle at 9,934.80. The market breadth, indicating the overall health of the market, was negative. On the BSE, 1,501 shares fell and 1,118 shares rose. A total of 140 shares were unchanged. Private bank stocks saw mixed trend. PSU bank stocks declined. Capital goods stocks saw mixed trend.

Dr Reddy's Laboratories lost 2.93% after the company announced that on 7 September 2017, the Regulatory Authority of Germany (Regierung von Oberbayern), concluded an audit of the company's formulations manufacturing facility in Duvvada, Vishakapatnam, with zero critical and six major observations. Products manufactured at the facility are not currently exported to the European Union (EU). The announcement was made during market hours today, 7 September 2017.

Eicher Motors shed 0.48% to Rs 32,628.70, extending Thursday's gains on buzz the company is preparing an offer to acquire superbike major Ducati for $1.8 to 2 billion. The stock had hit high of Rs 33,483.95 in intraday trade, which is also a record high. Reports suggested that Eicher is close to making a binding offer to acquire Italian superbikes Ducati for around $1.8 to 2 billion. The deal is being valued at 14-15 times Ducati's earnings before interest, taxes, depreciation and amortisation (EBITDA) of about 100 million euro, reports added.

IDBI Bank rose 0.99% after the bank said that its board approved divesting bank's stake in Sidbi. As on 28 August 2017, IDBI Bank held 8.64 crore shares, or 16.25% stake in Small Industries Development Bank of India (Sidbi). The announcement was made during trading hours today, 8 September 2017.

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