Asia Pacific share market ended mostly down after wiping out initial gains on Friday, 15 January 2016, as lingering concern about the state of China's economy and relapsing oil prices hit investors' appetite for risk.
China's main stock benchmark gauge entered into bear-market territory, defined as a fall of 20% or more from a recent high. The index has fallen 20% from its recent high, the definition of a bear market, reached on Dec. 22. The benchmark gauge has slumped 18% in 2016 and 45% from its June 2015 peak, making it one of the world's worst-performing equity indexes, amid concern about the outlook for the economy and uncertainty over the central bank's exchange-rate policy. The renewed bout of volatility in China added to investors' concerns about slowing growth in the rest of the region during the Asia day.
Markets have been closely tracking oil prices, as the plunge to multiyear lows amid a supply glut infects other parts of the commodity sector and raises fears that the moves presage a global economic slowdown. Brent crude was down 3.3% to $29.89 a barrel and the US-domiciled WTI contract is off 4.8% to $29.72. The market is warily eyeing the $30 level. Both contracts have briefly dipped below that mark in recent sessions. Traders fear that a close below $30 could trigger further sharp losses, pouring more woe on to the beleaguered resources sector.
US stock index futures pointed at steep losses for US stocks later in the global day. Trading in US index futures indicated that the Dow Jones Industrial Average could fall 204 points at the opening bell today, 15 January 2016.
Among Asian bourses
Australia Market ends softer
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Australian share market finished the session weaker, despite a positive finish from Wall Street overnight, as risk sentiments remain subdued amid lingering concerns about slackening economic growth in China, one of the world's biggest consumers of commodities from oil to copper. At the close, the benchmark S&P/ASX 200 index declined 16.60 points, or 0.34%, to 4892.80 points, while the broader All Ordinaries index dropped 15.60 points, or 0.31%, to 4948.50 points. The local market closed down almost 2% for the week and has lost 7.6% since the start of 2016. Ten out of 11 trading sessions since the start of the year have been negative and today was the lowest close since July 2013.
Financial stocks were down amid concerns about how China's slowing economy and financial turmoil will affect Australia's domestic economy and housing market. Commonwealth Bank of Australia declined 0.7% to A$78.88, Westpac Banking Corp 0.2% to A$31.06, National Australia Bank 0.4% to A$27.01, and Australia & New Zealand Banking Group 0.6% to A$24.91.
Gold miners finished mostly down, with Newcrest Mining falling 2.5% to A$12.74 and Kingsgate Consolidated erasing 5.3% to A$0.27.
Nikkei ends down
Japan share market ended softer, after paring its gains at noon, following a burst of positive action in early trading, as insurance, realty and bank, and financial stocks started to slip. Initial market action in the Tokyo market was driven by a buoyant Wall Street, which rallied strongly overnight following an oil price rise and gains in Chinese share markets yesterday. The 225-issue Nikkei Stock Average ended 93.84 points, or 0.54%, down at 17147.11. The Topix index of all Tokyo Stock Exchange First Section issues dropped 4.10 points, or 0.29%, to 1402.45.
Shares of export-related companies were mostly down as yen remained hovering around lower-117 level against the dollar. The dollar-yen pair fell 0.3% to 117.68 after climbing as high as 118.26 earlier. A stronger yen is usually considered negative for Japan's exporters as it trims earnings when translated back into the home currency. Soy sauce maker Kikkoman Corp, which gets 47% of revenue from North America, dropped 0.9% to 3675 yen. Subaru automaker Fuji Heavy Industries, which relies on North America for 60% of sales, lost 1.6% to 4392 yen. Among other blue chip exporters, Sony Corp dropped 1.5% to 2583 yen and Panasonic Corp 0.6% to 1091 yen, meanwhile Toyota Motor Corp dropped 0.6% to 6759 yen, Nissan Motor Co 1.9% to 1106 yen, and Mazda Motor Corp. 2.4% to 2058 yen. Alps Electric Co. sank 1.6% to 2726 yen and TDK Corp 1% to 7140 yen. China-linked Factory robotics firm Fanuc Corp was down 1.1% to 18515 yen. Market heavyweight Fast Retailing, operator of the Uniqlo chain, was off 1.7% at 37000 yen.
Shares of electronics maker Sharp Corp saw its shares rise 14.7% to 125 yen after reports that Taiwan's Hon Hai Precision Industry, better known as Foxconn, would offer to invest 700 billion yen in the company, raising the cap from 500 billion yen offered previously.
China Market enters into a bear terrain
Mainland China stock market ended the session down, erasing more than yesterday gains and back into bear terrain. The selloff pressure mounted on fading confidence in government efforts to manage the country's markets and economy, uncertainty over the central bank's exchange-rate policy, and a report that some banks in Shanghai have halted accepting shares of smaller listed companies as collateral for loans. The Shanghai Composite Index declined 3.55%, or 106.68 points, to close at 2900.97. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, lost 102.84 points, or 3.19%, to 3118.73. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 3.4%, or 63.24 points, to close at 1796.13. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, shrank 2.86%, or 62.11 points, to close at 2112.90.
The Shanghai gauge entered into bear-market territory, defined as a fall of 20% or more from a recent high. Chinese stocks also breached their Aug. 26 close, the summer stock trough. The benchmark gauge has slumped 18% in 2016 and 45% from its June 2015 peak, making it one of the world's worst-performing equity indexes, amid concern about the outlook for the economy and uncertainty over the central bank's exchange-rate policy.
All 10 industry groups in the CSI 300 Index tumbled, with losses were led by energy and resources companies. Datong Coal Industry Co. paced declines for energy shares, tumbling 4.4%, while Yanzhou Coal Mining Co. slumped 6.2%. Jiangxi Copper Co., the nation's biggest producer of the metal, sank 5.1%.
Data from the nation's central bank showed on Friday that Chinese banks issued 597.8 billion yuan ($90.7 billion) of new yuan loans in December, down from 708.9 billion yuan in November.
Hong Kong Market tumbles on fears of interest rates hike
The Hong Kong stock market declined further in volatile trading, as sell orders fueled amid lingering concern about the Chinese government's ability to manage the economic slowdown and yuan devaluation. Hong Kong dollar dropped to the lowest level against the U.S. dollar in four years on Thursday, raising concerns of sustained capital outflows. The Hang Seng Index (HSI) opened down 35 points at 19,781 and saw it losses widen after China released its December credit data. Meanwhile, USD/HKD continued its spike, triggering woes of capital outflows from HK. The HSI fell as much as 317 points at one stage to an intra-day low of 19,500. The benchmark Hang Seng Index has lost 296.64 points, or 1.5%, to 19520.77 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, sank 223.35 points, or 2.64%, to 8236.28 points. Turnover reduced slightly to HK$73.7 billion from HK$75.4 billion on Thursday.
Shares of energy players remained subdued on tracking weakness in crude oil futures in Asian trade today. PetroChina (00857) and CNOOC (00883) fell 2.2% and 3% to HK$4.38 and HK$7.06. Kunlun Energy (00135) dived 5.2% to HK$5.46. Sinopec (00386) slid 4.5% to HK$4.03 on reports that Sinopec has purchased its first ever batch of US crude oil for export, a landmark deal after the ending of a four-decade ban on domestic exports.
Developers fell across the board on USD/HKD spike to 7.7990, which ushers in speculation of rate hike. Henderson Land (00012) dipped 2.7% to HK$41.75. New World (00017) slipped 2.1% to HK$6.7. CK Property (01113) declined 2.9% to HK$44.9. MTRC (00066) was the top blue-chip winner, rising 0.4% to HK$36.6.
Shares of Bossini International Holdings tumbled after the casual wear apparel retailer issued profit warnings, saying earnings for the July-December period could fall as much as 90% from a year earlier.
Sensex falls
After flip-flopping between gains and losses earlier during the session, the key benchmark indices ended the session with sharp losses after a sudden slide towards the latter part of the trading session. The barometer index, the S&P BSE Sensex, fell 314.95 points or 1.27% at 24,458.02, while the 50-unit Nifty 50 index fell 99 points or 1.31% at 7,437.80, as per the provisional closing data. Stocks of public sector banks and metal and power sector stocks led losses for the two key benchmark indices.
Hindustan Unilever (HUL) edged lower after its third quarter financial performance showed that volume growth for the FMCG major remain muted during the quarter. The stock shed 2.63% at Rs 804.70. HUL profit after tax before exceptional items rose 7% to Rs 1024 crore in Q3 December 2015 over Q3 December 2014. Total income rose 2.87% to Rs 8120.60 crore in Q3 December 2015 over Q3 December 2014. The result was announced during trading hours today, 15 January 2016.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.25% to 7762. South Korea's KOPSI slid 1.1% to 1878.87. Malaysia's KLCI fell 0.3% to 1628.55. Singapore's Straits Times index sank 0.5% at 2630.76. Indonesia's Jakarta Composite index added 0.24% to 4523.98. New Zealand's NZX50 rose 1% to 6169.09.
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