Headline equities of the Asia Pacific market mostly down on Friday, 03 July 2015, amid growing caution before Greece's weekend referendum. The MSCI Asia Pacific Index slipped 0.4% to 146.36. The measure headed for a 1% decrease this week.
The participants across the region cut their exposure ahead of this weekend's Greek referendum. Downbeat sentiment prevailed on caution ahead of a key referendum on Sunday that would determine Greece's future in the euro zone. A "no" vote by Greeks could force the country out of the eurozone. A "yes" vote could cause the Syriza party led coalition government to collapse. Greek Finance Minister Yanis Varoufakis said he would resign if the country votes to accept European Union bailout proposals in the weekend referendum.
Greece and its lenders failed to reach an agreement over bailout funds, resulting in a missed payment to the International Monetary Fund (IMF) on Tuesday, 30 June 2015. The closure of Greece's banking system entered 5th day today, 2 July 2015. After the collapse of the bailout talks, Greece had ordered the shutdown of its banking system for six days from 29 June 2015 to avoid a run on the country's banks and the nation's central bank moved to impose controls to prevent money from flooding out of the country.
Among Asian bourses
Australia stocks fall, with resources lead losses
The Australian share market registered first fall in four consecutive days, as weak finish of offshore market overnight and decline in commodity prices triggered profit booking. The worse than expected retail sales data for May also weighed down investor sentiments. All ASX sectors closed down, with shares of oil explorers and mining companies being top losers. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each declined by 1.1% to 5538.30 and 5528, respectively. The ASX200 closed down 0.14% for the week.
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Shares of energy players suffered the most damage in the Sydney market inline with drop in Nymex and Brent crude-oil futures overnight, with Oil Search erasing 3.3% to A$7.07 and Santos falling 3.1% to A$8.01. Woodside Petroleum sank 1.5% to A$34.76.
Materials and resources stocks also down on tracking weaker commodity prices, including a significant pullback for iron ore. The iron ore price also plunged by 6% on Thursday.BHP Billiton lost 1.5% to A$26.59 and Rio Tinto fell 1% to A$52.50. Fortescue Metals Group sank 4.7% to A$1.82.
Qantas Airways shares dived 2.1% to A$3.20 after announcing it would spend roughly A$70 million on one-time bonus payments to most of its workforce, which had been under a pay freeze since early 2014.
Australia's retail sales rose by 0.3% in May from April, according to the Australian Bureau of Statistics data released on Friday. Sales for April were revised downwards to show a 0.1% drop, compared with the flat result originally reported.
Nikkei climbs for fourth day
Japanese share market ended edge higher after recouping intraday losses, and maintained rising streak for fourth straight sessions. But, concerns over outcome of weekend's Greek referendum capped gains. The Nikkei Stock Average advanced 17.29 points, or 0.08%, to end at 20539.79, posting a 0.8% drop this week. The Topix index of all Tokyo Stock Exchange First Section issues dropped 0.23%, or 3.85 points, to close at 1652.09, posting a 0.9% drop this week.
Shares of export-related stocks mixed after the yen appreciated against the greenback, last quoted at 123.05 yen per dollar vs 123.33 yen per dollar on Thursday. A strong yen is negative for Japanese exporters as it makes products costlier overseas and erodes their profits when repatriated. Sony Corp lost 0.3% and Panasonic Corp sank 1%, while Nissan Motor Co rose 2.1% Toshiba Corp added 1.4%. Kyocera Corp was up 2.2% after settling a patent suit by Microsoft Corp and agreeing to expand a tech-sharing deal between the two companies.
Fast Retailing Co fell 3.7% after reporting a surprise double-digit drop for June sales at its Uniqlo stores. Same-store sales at its Uniqlo stores fell about 12% in June due to the cool weather.
Furukawa Electric Co. slumped 3.2% after Morgan Stanley reduced its rating on the cable maker to equalweight from overweight while cutting its share price target by 14%.
FamilyMart Co. gained 1.2% after the retailer reported better than market expected 23% rise in operating profit to 11.1 billion yen ($90 million) in the first quarter.
China stocks plunge another 5.8%
China's stock market ended lower for third straight day on another rollercoaster ride, amid a fresh wave of panic selling even as Beijing moves swiftly to try to plug losses. The Shanghai Composite Index tumbled 225.85 points, or 5.77%, to end at 3686.92. The Shenzhen Composite Index tanked 117.34 points, or 5.3%, to close at 2098.48. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 44.04 points, or 1.66%, to end at 2605.28. The gauge has tumbled 24% from its June 12 peak, helping wipe out at least $2.4 trillion of value. Chinese shares have erased more than $2.8 trillion of value in three weeks.
China's benchmark Shanghai Composite Index lost 12.1% this week and nearly 30% from its June 12 peak, despite a raft of simulative measures by authorities, including rate cuts, reduction in stock-transaction fees, and an easing of margin rules.
Comments from the central bank and Premier Li Keqiang on Thursday did little to calm panicky investors. The central bank vowed to guard against systemic financial risks, while Premier Li called for a stable and healthy capital market. The remarks were quickly overshadowed by a statement from the China Securities Regulatory Commission (CSRC) on Friday it had set up a team to look at clues of illegal manipulation across markets.
All ten SSE industry groups declined, with industrial and utility companies leading losses after doubling over the past year. China Eastern Airlines Co. plunged by the daily limit of 10% for a second day after applying to sell shares in a private placement. Huaneng Power International Inc. also fell 10% for a three-day, 27% loss.
Chinese brokerage stocks also suffered sharp losses, after the China Securities Regulatory Commission said that it had decided to launch an investigation into suspected market manipulation possibly linked to recent market turmoil. Shenwan Hongyuan H.K. dropped 7.4% to 13.63 yuan.
Hong Kong s Stocks fall
The Hong Kong stock market ended down, as soft lead from global equity markets and weekend's Greek referendum rattled investor sentiments. The Hang Seng Index declined 218.21 points or 0.83% to finish at 26064.11 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 175.67 points, or 1.37%, to 12608.98 points. Turnover reduced slightly to HK$148.9 billion from HK$150.8 billion on Thursday
Insurers were hit hard in tandem with the Shanghai equity market. Ping An (02318) slipped 2.9% to HK$99. China Life (02628) fell 2.6% to HK$32.25. China Pacific Insurance Group Co dropped 4.1% to HK$35.20 and PICC Property & Calsualty Co lost 2.3% to HK$17.26.
Chinese developers were lower. CR Land (01109) fell 4% to HK$23.85. COLI (00688) dipped 2.4% to HK$27.
HSBC (00005) and StanChart (02888) were investigated by the Brazilian watchdog for rigging of Brazilian currency. HSBC was flat at HK$69.5. StanChart edged down 0.5% to HK$125.8.
Macau casino stocks mostly extended their recent gains after the city posted better-than-expected gambling revenues in June. Also, buying was spirited after Macau relaxed its transit visa restrictions for China tourists, starting 1 July, the duration of stay for transit visas increases to 7 days from 5 days. Sands China added 0.7% to HK$29.45 and rival MGM China Holdings rose 0.4% to HK$14.76.
Sensex ends higher
The Indian benchmark indices ended at highest in 2-1/2 months, on better-than-expected progress of the monsoon, with banking and capital goods stocks leading the rally. Announcements by the government on the capex front, Digital India campaign and a slew of positive macro numbers also supported the markets. The Sensex advanced 147 points to close at 28,092.79 and the Nifty advanced 40 points to shut shop at 8,485.
The outcome of a monthly survey today, 3 July 2015, showed that the reduction in India's services activity accelerated last month. The seasonally adjusted Nikkei Services Business Activity Index declined to 47.7 in June 2015 from 49.6 in May 2015. The index hit its lowest level since March 2014.
Meanwhile, the Reserve Bank of India (RBI) Governor Dr. Raghuram G. Rajan yesterday, 2 July 2015, said that the Indian economy was recovering and there were signs of capital investments picking up. Rajan said that the government was trying to put stalled projects back on track.
India Meteorological Department (IMD) expects rainfall to be above normal over northwest, central and over some parts of east India during the period from 6 to 10 July 2015. Rainfall activity may remain above normal over west India during 11-15 July 2015 and over northern plains during 16-20 July 2015, as per IMD's Extended Range Forecast. The IMD has forecast below normal rainfall activity over interior Peninsular India.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.2% to 9358.23. South Korea's KOSPI lost 0.1% to 2104.41. New Zealand's NZX50 ended marginal 0.57 point down at 8540.90. Singapore's Straits Times index rose 0.5% at 3342.73. Indonesia's Jakarta Composite index rose 0.8% to 4982.91. Malaysia's KLCI jumped marginal 0.36 point at 1734.24.
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