Asia Pacific share market closed mostly lower after reversing early gains on Thursday, May 09, 2013, as wave of profit taking speeded late afternoon after inflation data out of China renewed concern about the fragility of the country's economic recovery, overshadowing encouraging news of interest rate cut in South Korea and record close of offshore bourses overnight.
Most Asian markets had advanced in morning trade after U.S. and German equities climbed further into record territory, but couldn't hold on to those gains. The Dow Jones Industrial Average and the Standard & Poor's 500 Index both ended at record highs in the U.S. on Wednesday, while the German benchmark index also finished at an all-time peak.
China's Consumer Price Index (CPI), a main gauge of inflation, rose 2.4% from a year earlier in April, up from 2.1% in March, the National Bureau of Statistics said this morning. China's Producer Price Index (PPI), a major gauge of inflation at the wholesale level, fell 2.6% year-on-year to a six-month low last month, according to the bureau. The faster-than-expected inflation may reduce the possibility of another interest rate cut although a lower PPI suggests domestic demand is weakening amid a slowing economy.
Also, China's trade data for April released today, showed trade growth accelerated last month but market pundit said export figures might be inflated due to unchecked capital inflows instead of real demand and the recovery might be weaker than it looks. The General Administration of Customs said that exports expanded 14.7% from a year earlier to US$187.1 billion last month. Imports jumped 16.8% to US$168.9 billion, also stronger than March's 14.1% gain. That created a trade surplus of US$18.2 billion in April, compared to a deficit of US$884 million a month earlier.
South Korea's benchmark Kospi index jumped 1.2% to 1,972.70 after the Bank of Korea lowered its benchmark interest rate for the first time in seven months. In announcing that it was lowering the rate by a quarter percentage point to 2.5%, the Bank of Korea became the latest central bank to take steps to boost flagging economic growth. Europe, India and Australia reduced key interest rates this month while the Bank of Japan and the U.S. Federal Reserve are engaged in an unprecedented expansion of their domestic money supplies.
The Australian stock market closed almost flat, slightly backing off from a nearly five-year high hit earlier in the session, following subdued Chinese inflation data and volatile jobs numbers. The benchmark S&P/ASX200 index down by 1.40 points to 5198.40, while broader All Ordinaries rose 2.70 points to 5180.60.
Australia's seasonally adjusted unemployment rate was estimated at 5.5% in April, as announced by the Australian Bureau of Statistics (ABS) today. The ABS reported the number of people employed increased by 50,100 to 11,663,200 in April. Both full-time and part-time employment increased, with full-time employment up 34,500 to 8,159,700 people and part-time employment up 15,600 people to 3,503,500. The increase in total employment was driven by increases in part-time and full-time employment for both males and females. The number of people unemployed decreased by 2,700 people to 685,300 in April, the ABS reported.
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Japan's shares pulled down today, weighing the Nikkei Stock Average down by 0.66% to 14191.48, registering first fall in three days, as profit taking emanated after the benchmark index closed nearly five years peak prior day. Meanwhile yen hardening against the greenback and weakness in the Shanghai and Hong Kong markets also prompted investors to sell stocks in Tokyo.
Shares of Toyota Motor Corp, the world's top-selling auto maker, declined 1.7% to 5890 yen despite reporting that its operating profit for the year ending March 2014 will likely rise 36% on the year to 1.8 trillion yen.
Bridgestone lost 6.6% to 3,475 yen after the tire maker left unrevised a prior earnings outlook made three months ago for 2013 despite performed solidly in the March quarter. Toshiba dropped 4.9% to 487 yen after the electronic maker outlook for the current business year failed to impress market. The company said Wednesday it expects a net profit of 100 billion yen and an operating profit of 260 billion yen on revenue of 6.1 trillion yen for the business year that started in April.
Fuji Heavy Industries added 2.1% to 1,938 yen after the firm said it expects its group net profit to reach Y110 billion for this fiscal year. Daikin Industries rose 6% to 4,235 yen after saying Wednesday that it sees its group net profit rising to Y64 billion for this fiscal year.
China shares pulled back for the first time in five days in row today, weighing the benchmark Shanghai Composite Index down by 0.6% to 2232.97, amid concerns that rising inflation may erode easing policies while weaker producer prices signal the fragility of the country's economic recovery. Shares in steel, cement and glass makers were weak on reports the government has drafted plans to curb production overcapacity and may strictly control new projects in industries. Anhui Conch, China's biggest cement maker, fell 3.8% to 17.57 yuan. Huaxin Cement Co. (600801), the Chinese affiliate of Holcim Ltd., retreated 5% to 13.57 yuan. Poly Real Estate fell 2% to 11.98 yuan, while a gauge of real-estate companies in the Shanghai index slumped 1.7%.
Hong Kong shares closed down in volatile but narrow trade, with the benchmark Hang Seng Index down by 0.14% to 23211.48. Among the 50 HK blue chips, 15 rose and 31 fell, with 3 stocks remaining steady, while 1 is suspended trading. Hengan gained 5% to HK$84.55, while China Resources Enterprise plunged 4.4% to HK$25.8, making themselves the largest blue-chip gainer and loser. HKEx fell 2.7% to HK$130.70 on top of a 1.1% decline on Wednesday after first-quarter net profit rose just 1% to HK$1.16 billion in spite of a nearly 20% increase in revenue. Solar stocks were hit by news that Chinese solar-panel manufacturers face import tariffs of up to 67.9% in the European Union. GCL-Poly Energy dropped 2.5% to HK$1.57 and Comtec Solar fell 2.1% to HK$1.41.
Indian stocks were also pulled back today, snapping three-day winning streak as European stocks fell. The S&P BSE Sensex fell below the psychological 20,000 mark, having alternately moved above and below that mark in intraday trade. The Sensex was provisionally down 47.72 points or 0.24%, off 116.02 points from the day's high and up 38.63 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Index heavyweight and cigarette major ITC was slightly higher. Another index heavyweight Reliance Industries (RIL) edged lower. IT stocks edged higher after Cognizant Technology Solutions Corp on Wednesday posted a strong set of first quarter numbers and also reiterated its revenue guidance for 2013. Metal stocks dropped. Asian Paints dropped after the company during trading hours today, 9 May 2013 reported fall in Q4 net profit.
Elsewhere in the region, New Zealand's NZX50 ended edge 0.02% down. Taiwan's Taiex added 0.23%. Singapore's STI jumped 0.6%. Malaysia's KLSE Composite fell 0.45%. Indonesian market closed for holiday.
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