Headline shares of the Asia Pacific market ended mostly down on Friday, 12 September 2014, as risk sentiments were muted on caution ahead of next week's Federal Open Market Committee policy meeting, where investors expect to see firmer signals for higher interest rates in the US. The MSCI Asia Pacific Index dropped 0.2% to 145.97, retreating for a seventh day. The equity gauge posted a 1.7% decline this week.
The decline in the regional stocks came as investors were struggling to find catalysts to drive stock prices higher especially as anticipation builds that the Federal Reserve is closer to winding down its economic stimulus and raising interest rates. In the absence of major economic indicators, geopolitical tensions also weighed on investor sentiment after the U.S. announced tighter sanctions on Russia and a wider military campaign against the Islamic State group.
Among Asian bourses
Aussie market falls to a fresh four-week low
Australian share market finished lower today, as drop in personal finance commitments data and commodity prices dragged on the financials, property trusts, and energy sector. Mining stocks managed to advance despite further weakness in iron-ore prices. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each declined by 0.3% to 5531.10 points and 5532.30 points, respectively. Turnover was relatively healthy with 1.99 billion shares worth of A$3.99 billion traded today. The S&P/ASX 200 Index lost 1.2% over the week. The benchmark index posted its third consecutive weekly loss.
Australian Bureau of Statistics data showed the seasonally adjusted series for the value of total personal finance commitments fell 1.3%. Also, the seasonally adjusted series for the value of total commercial finance commitments rose 3.7% in July 2014, following a rise of 11.8% in June 2014.
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The financial stocks extended losses, with Australia's top four big banks were the key dragger of the day after UBS AG said the government may require the nation's top four banks to hold additional capital of as much as A$68.67 billion. Commonwealth Bank of Australia lost 0.5% to A$80.23, while Westpac Banking Corporation fell 1.1% to A$34.25. ANZ Banking Group shed 0.9% to A$32.83 and National Australia Bank fell 0.5% to A$34.25.
Energy stocks also ended down, on tracking fall crude oil prices to fresh multi-month lows. Oil and gas producer Woodside Petroleum erased 0.02% at A$42.34, Origin Energy sank 0.8% to A$15.28 and Santos surrendered 0.3% to A$14.64.
Nikkei rises to fresh 8-month high
Japanese share market advanced to fresh eight-month high, powered by yen depreciation to weakest level since 2008 against the dollar which bolstered appetite for export related companies. The Nikkei 225 index at the Tokyo Stock Exchange rose 0.25%, or 39.09 points, to 15948.29, the best finish since early January, while the Topix index of all first-section shares rose 0.19%, or 2.48 points, to 1313.72.
The yen's extended its depreciating streak, trading above 107 level, a fresh six-year low, against the greenback. The US dollar has gained traction on buying ahead of next week's Federal Open Market Committee policy meeting, where investors expect to see firmer signals for higher interest rates. It also got a boost from remarks Thursday by Bank of Japan Gov. Haruhiko Kuroda who said the central bank is ready to make without hesitation adjustments to policy, additional easing or whatever, if necessary.
Export related stocks extended winning streak, on the back of yen weakening against the greenback. A weaker yen inflates the profitability of Japanese exporters, while giving them scope to price goods more competitively in foreign markets. Canon Inc, the world's biggest camera maker, gained 0.4% to 3519 yen. Toyota Motor Corp, the world's biggest automaker, advanced 1.4% to 6303 yen. Honda Motor Co, a carmaker that gets 84% of sales abroad, advanced 0.6% to 3687 yen. Nissan Motor Co, which gets 78% of sales outside Japan, rose 0.2% to 1,055 yen.
Shares of Sony Corp advanced 1.1% to 2127 yen, on the top of yesterday's 2.7% gain, after U.S. mass media company Viacom announced that it has agreed to provide 22 of its networks for Sony's upcoming cloud-based TV service and 21st Century Fox Inc. were said to be in talks to provide programming for the Japanese company's planned Internet TV service..
Astellas Pharma Inc. jumped 3.2% to 1,594 yen, after confirming yesterday that the U.S. government approved a new indication for the use of its Xtandi cancer drug. Astellas and Medivation Inc. confirmed the U.S. regulator's approval for the use of the drug to treat patients with metastatic castration-resistant prostate cancer that will trigger $90 million in payments to Medivation through a pact with Astellas.
Shanghai Composite ends higher
Mainland China share market closed higher, on growing speculation that government will unveil fresh stimulus measures after China's consumer inflation cooled more than expected in August, further evidence that the economy is losing momentum. All ten SSE sectors advanced, with shares of industrials, telecom, utilities, energy and consumer discretionary companies being major gainers. The benchmark Shanghai Composite advanced 20.27 points to finish at 2331.95. The CSI 300 added 14.91 points to 2438.36.
The consumer price index (CPI) rose 2% in August from a year earlier, the National Bureau of Statistics said Thursday, missing market expectations for 2.2% and down from 2.3% in July. The producer price index (PPI) fell 1.2%, its 30th consecutive monthly decline, as weak economic conditions continue to rob Chinese companies of pricing power. The market had expected a 1.1% decline after a drop of 0.9% in July. The CPI rose 0.2% in August from the previous month, only half as much as economists had expected. With consumer inflation well below the official annual ceiling of 3.5%, the government and the central bank have scope to provide further stimulus to the economy if needed.
Shares of civil aviation companies advanced the most in Shanghai market, on prospects for increased travel demand before the National Day holidays in October. Air China, the nation's largest international carrier, rose 2.1% to 3.83 yuan. China Southern Airline, the biggest carrier by fleet size, added 3.4% to 2.73 yuan. China Eastern Airlines Corp, the second-largest carrier, climbed 1.4% to 2.92 yuan.
Shandong Jiangquan Industry Co. surged 10% daily limit to 3.85 yuan after saying Aesthetic Technology, a Beijing-based cosmetics maker, plans to list through the company.
The central bank said on Friday that China's new yuan-denominated lending stood at 702.5 billion yuan (114.2 billion U.S. dollars) in August, nearly double that in July. In July, China's new yuan loans plunged to 385.2 billion yuan, from the 1.08 trillion yuan issued in new loans in June.
Hang Seng slips for sixth day
Hong Kong share market finished lower in volatile trade, on caution ahead of next week's Federal Open Market Committee policy meeting, with shares of financial, energy and resources companies being major losers. The Hang Seng Index ended 67.32 points, or 0.27%, down at 24595.32. The benchmark index has fallen for six consecutive trading days, losing a combined 723 points. Market turnover decreased to HK$61.17 billion from HK$70.89 billion on Thursday.
Shares of energy companies declined the most in Hong Kong market as the International Oil Agency cut its global demand forecasts. Cnooc fell 2.3% to HK$14.30 and PetroChina Co. retreated 1.3% to HK$10.54.
CITIC (00267) slid 4% to HK$14.18, the worst performing blue chip, after the company said it received a copy of the Hong Kong Securities and Futures Commission's (SFC) High Court writ of summons and statement of claim against the company and five of its former executive directors, Larry Yung Chi Kin, Henry Fan Hung Ling, Leslie Chang Li Hsien, Peter Lee Chung Hing, and Chau Chi Yin. The company said in a statement to the HKEx that it in the process of considering the SFC's allegations and claim, and seeking legal advice.
Belle International Holdings declined 2.7% to HK$9.4, after the company announced declining sales in footwear business and reduced the number of its retail outlets. Belle International (01880) said the footwear business had a same store sales decline of 2.8% for the second quarter ended 31 August 2014, while the sportswear and apparel business had a same store sales growth of 14.4%. As at 31 August 2014, the total number of retail outlets of the Group in Mainland China was 19,546, which consisted of 13,491 footwear outlets and 6,055 sportswear and apparel outlets, all of which were directly managed by the Group.
WH Group (00288) jumped 4.2% to HK$6.69 after Goldman Sachs and BofAML initiated coverage on the stock, with respective target price of HK$8.6 and HK$8. A slew of research houses have recently covered the stock, with bullish comments on its outlook.
Sensex regains 27000
Indian stock market ended the session in the green amid firm European cues. But gains were marginally amid caution ahead of CPI inflation data. The 30-share BSE index Sensex was up 65.17 points at 27,061.04 and the 50-share NSE index Nifty was up 19.8 points at 8,105.50.
Bank stocks rose ahead of consumer price inflation data. Among pharma stocks, Cipla scaled record high. Sun Pharmaceuticals Industries trimmed losses in volatile trade after clarification on report that the company's manufacturing facility in Halol, Gujarat is undergoing a surprise inspection by the US Food and Drug Administration.
Macroeconomic data due after trading hours today, 12 September 2014, is likely to show easing of consumer price inflation in August 2014 and a muted growth in industrial production in July 2014. Meanwhile, a recent pick up in monsoon could ease concerns of food price inflation and boost sowing of Kharif crops.
Elsewhere in the Asia Pacific region-- Taiwan's Taiex index declined 1.07% to 9223.18. Singapore's Straits Times index was down 0.05% to 3345.55. Malaysia's KLCI has lost 0.56% to 1855.64. New Zealand's NZX50 dropped 0.73% to 5223.96. South Korea's KOSPI index rose 0.38% to 2041.86after the nation's central bank kept borrowing costs unchanged as Asia's fourth-largest economy slows. Indonesia's Jakarta Composite index added 0.21% to 5143.71.
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