Asia Pacific Market: Stocks extend last week rally

Asia Pacific share market closed mostly higher on Monday, 18 July 2016, as continued speculation that central banks will support global uncertainty with ample liquidity. Meanwhile, buying momentum further underpinned by data out of China on Friday suggesting that the country's gross domestic growth expanded by a more-than-expected 6.7 percent in the second quarter from a year earlier, suggesting the economy is responding to stepped up policy support. The market impact of the coup in Turkey was limited after the country's government reasserted control quickly over the weekend, arresting thousands of members of the military.

Market participants are awaiting the European Central Bank's first policy meeting since Britons voted to leave the European Union. ECB President Mario Draghi is likely to plead for governments to do more to boost the euro zone's economy in a meeting on Thursday, its last before an eight-week summer break. The ECB is not expected to change its monetary stance. Governments in China, Japan and Britain have already started easing their fiscal stance or hinted at plans to do so.

Among Asian bourses

Australia Market extends gain to eighth day

Australian share market advanced for eighth consecutive session, with shares of consumer discretionary and big banks leading the way. At close of trade, the benchmark S&P/ASX 200 index advanced 28.90 points, or 0.53%, to 5538.50. The broader All Ordinaries climbed up 28.80 points, or 0.52%, to 5538.90.

Shares of consumer discretionary sector led the bourse, with JB Hi-Fi climbing 2.7% to A$24.25 after the electronics and whitegoods retailer made an A$850 million bid for competitor The Good Guys. Woolsworth grew 2% to A$21.95

Banking shares were moderately higher after a solid performance by US financial stocks last week. Better than expected US economic data has painted a rosier picture of the world's largest economy, which in turn has prompted speculation the US Fed may raise interest rates sooner than expected, paving the way for higher banking margins. Commonwealth Bank of Australia added 0.2% to A$76.10, Westpac Banking Corp 0.6% to A$30.30, ANZ Banking Group 0.4% to A$24.96, and National Australia Bank 0.1% to A$25.94.

Whitehaven shares surged 1.8% to A$1.69 after reporting a 44% jump in shipments over the year to June. The broker has lifted its 12-month price target on the stock by a massive 41%, to A$2.25 - well clear of the analyst pack, where the median target is A$1.34. The miner is benefiting from increasing coal prices and may be able to maintain premium prices. On Friday analysts at BoA-ML lifted their target to A$1.75 from A$1.50, and maintained their "buy rating".

China Stocks drop on profit booking

Mainland China stock market closed down, as profit booking triggered after the benchmark equity gauge posted three straight weeks of gains. Meanwhile, decline was also fueled on liquidity concerns as lock-up shares worth about 21 billion yuan ($3.15 billion) will become eligible for trade on the Shanghai and Shenzhen bourses this week. The CSI300 index of the largest listed companies in Shanghai and Shenzhen dropped 0.44%, to 3262.02, while the Shanghai Composite Index fell 0.35%, to 3043.56 points.

Real estate and construction stocks led indexes lower after data showing slowing home-price gains. New-home prices excluding government-subsidized housing climbed in 55 cities in June, down from 60 in May among the 70 tracked, the National Bureau of Statistics said Monday. Prices dropped in 10 cities, compared with four a month earlier. China Vanke Co. retreated 2.6%, while China State Construction Engineering Corp. lost 0.9%. Suning Universal Co., a Nanjing-based property developer, plunged by the daily limit of 10%.

Brokerages closed broadly lower. Soochow Securities Co dipped 4.24%. Citic Securities Co, one of the country's biggest brokerages, fell 1.78%.

Shares of energy companies were also down. Sinopec Oilfield Service Corp. dropped 2.4% and Yanzhou Coal lost 3.2%.

China Railway Construction slumped by the 10% daily limit after 1.24 billion shares became available for trading from Monday after the expiry of a year-long lock-up period.

Hong Kong Stocks jump 0.66%

The Hong Kong stock market closed up after official data last week showed the China maintaining its growth pace of 6.7% in the second quarter. The benchmark Hang Seng Index advanced 143.93 points, or 0.66%, to 21803.18 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 41.29 points, or 0.46%, to 9090.95. Turnover decreased to HK$62.3 billion from HK$69 billion on Wednesday. Turnover decreased to HK$55.5 billion from HK$73.2 billion on Friday.

Shares of Lenovo (00992) shined today, jumping 8% to HK$5.1 despite Morgan Stanley's "underweight" rating and target price of HK$4.2. It was the top blue-chip gainer today.

China Merchants (00144) also rebounded 6% to HK$21.55. The company issued a profit warning last week, which credit rating agency Moody's said does not immediately affect its Baa1 issuer rating and the rating outlook remains negative.

Centa-City Leading Index CCL, which reflects property price trend in secondary market, rose 0.77% week-on-week. Meanwhile, Citi Research sees limited downside for property prices. It even expects home prices could rise 3% this year. Both SHKP (00016) and New World (00017) gained 2% to HK$108.1 and HK$8.54. Sino Land (00083) shot up 3% to HK$13.68.

BYD (01211) put on 3% to HK$52.65. Deutsche Bank lifted its target price for BYD to HK$56.8 after Samsung Electronics (SEC) plans to acquire A-share stake in BYD. Huaneng Power (00902) dipped 2% to HK$4.53 after the power producer said its 2Q power output fell 10%. Datang Power (00991) also softened 2% to HK$1.91. CR Power (00836) edged up 0.4% to HK$11.62.

Sensex registers modest losses

Indian benchmark indices registered modest losses in the first trading session of the week. The barometer index, the S&P BSE Sensex lost 89.84 points or 0.32% to settle at 27,746.66. The Nifty 50 index lost 32.70 points or 0.38% to settle at 8,508.70.

Shares of public sector oil marketing companies (PSU OMCs) declined after announcing a slash in petrol and diesel prices. Axis Bank rose after the Reserve Bank of India (RBI) on Friday, 15 July 2016, notified increase in foreign investment ceiling in the bank. Bharti Airtel fell after the company announced an effective reduction in pre-paid data tariffs by increasing data benefits on some of its pre-paid data recharge packs with effect from 17 July 2016.

Elsewhere in the Asia Pacific region: New Zealand's NZX50 added 0.5% to 7105.95. South Korea's KOSPI index gained 0.2% to 2021.11. Taiwan's Taiex index climbed 0.7% to 9008.21. Malaysia's KLCI added 0.2% to 1670.84. Indonesia's Jakarta Composite index gained 0.3% to 5127.50. Singapore's Straits Times index rose 0.1% to 2928.76. Japanese markets closed for Marine Day on Monday.

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