Asia Pacific share market tumbled on Monday, 29 June 2015, as investors rushed to exit risker assets in-line with global selloff on fears Greece could default on a debt repayment and crash out of the eurozone.
Investors appetite for riskier assets vanished after the Greek leaders imposed capital controls and closed banks for at least six days beginning today, 29 June 2015, to prevent further panicked withdrawals from citizens after the European Central Bank yesterday, 28 June 2015, decided not to expand a lifeline of emergency funds that has been sustaining Greek banks. The move Greek followed Prime Minister Alexis Tsipras' weekend decision to call a referendum on European and International Monetary Fund proposals for Greek reforms in return for bailout funds.
Investor sentiment was also hurt by the continued sell-off in Mainland China markets, despite fresh government easing moves announced over the weekend. China's central bank cut interest rates on Saturday, 27 June 2015, and reduced the reserves that certain banks must hold. The People's Bank of China (PBoC) cut the benchmark 1-year lending rate by a quarter percentage point to 4.85%, its fourth rate cut since November. The PBoC also lowered the reserve requirement ratio for some lenders by half of a percentage point.
Among Asian bourses
Nikkei tumbles 2.88%
Japanese share market declined for third straight session, as investors rushed to the exit on fears that Greece could default on its debt, and ultimately forcing the country to leave the eurozone. The yen hardening against major currency baskets also triggered selloff. The Nikkei Stock Average tumbled 596.20 points, or 2.88%, to finish at 20109.95. The Topix index of all Tokyo Stock Exchange First Section issues dropped 2.53%, or 42.21 points, to close at 1624.82.
Shares of lenders were solidly lower after Greece shut its banking system. Among the top financial shares, Mitsubishi UFJ Financial Group In dropped 3.2%, Mizuho Financial Group Inc fell 3.6%, and Sumitomo Mitsui Financial Group Inc lost 2.7%.
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Exporters that relay mostly on Europe for sales tumbled the most in Tokyo. Game-maker Nintendo Co., which gets about 28% of revenue from the region, lost 3.6%. Industrial parts-maker Makita Corp., which gets 42% of revenue from the region, lost 4.1%. Fast Retailing, the operator of Uniqlo clothing stores, fell 3%.
Japan's industrial production fell 2.2% on month in May, according to data from the Ministry of Economy, Trade and Industry released on Monday. The fall came after rise of 1.2% in April, on lower output of transportation vehicles, chemicals and electronic parts and devices. According to a survey by the ministry, output is expected to rise 1.5% in June and then increase 0.6% in July. METI cut its assessment of domestic production, saying output is see-sawing.
Japan's retail sales rose 3% on year in May, after rising 4.9% in April, according to preliminary retail sales data from the Ministry of Economy, Trade and Industry released on Monday.
Australia market extends fall
The Australian share market closed down for third straight session lower, echoing global market slide, on mounting likelihood of Greece default on its debts after Athens announced a referendum on the nation's bailout terms. All ASX sectors closed lower, with shares of consumer discretionary, financials, energy, and material companies being major losers. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both tumbled by 2.2% to 5422.50 and 5416.60, respectively. Market turnover was relatively strong with 2.1 billion shares changing hands worth of A$5.32 billion.
Banks and financial stocks were solidly lower after Greece shut its banking system. Australia & New Zealand Banking Group dropped 3.1% to A$32.07, National Australia Bank 2.6% to A$33.20, Commonwealth Bank of Australia 2.3% to A$84.69, and Westpac Banking Corp 3% to A$32.02.
Shares of materials and resources companies extended losses after base Metal prices closed lower on last Friday after a rout in Chinese shares and worries about Greek debt talks over the weekend along with a firm U.S. dollar against basket of currencies and with seasonal slowdown in demand. BHP Billiton sank 2% to A$26.95. Rio Tinto dropped 1.5% to A$53.29 and Fortescue Metals Group declined 3% to A$1.93 after reports that iron ore may tumble into the $30s a metric ton in the second half as surging low-cost supplies from the world's biggest producers swamp the market.
Gold miners were mostly higher, as the yellow metal gained due to safe-haven buying amid the Greek crisis. Stock in Evolution Mining added 3.9% to A$1.21, while newcrest Mining jumped 1.2% to A$13.12.
Shares in Slater & Gordon plunged 25 per cent to A$3.78 after it confirmed that the Australian Securities and Investments Commission will come to it with questions about its audit relationship with Pitcher Partners and admitted an accounting error has been found in its UK business.
China stocks dive in bear territory
The Mainland China share market closed steep lower after a rollercoaster ride, as panicked investors rushed to the exit riskier assets in spite of the central bank's effort to revive confidence with an interest-rate cut. Barring energy, all SSE measures declined, with blue chips of telecom, technology, materials, and financial companies leading declines. The Shanghai Composite Index dropped 3.3% to finish at 4,053.03 on turnover of 904.2 billion yuan. The index saw a swing from gains to losses of 10%, rising 2.5% in early trade before at one point losing as much as 7.6%. The Shenzhen Composite Index, which tracks stocks on China's second exchange, plummeted 6.06%, or 151.56 points, to 2,351.40 on turnover of 631.2 billion yuan. The Shanghai benchmark index tumbled 21.5% from a peak on 12 June 2015, crossing the 20% threshold that defines a bear market.
A move by China's central bank over the weekend to cut interest rates failed to give a sustained lift to China's main stock market. On Saturday the People's Bank of China cut both deposit and lending rates by 0.25 per cent and the reserve requirement ratio by 0.5 per cent for agricultural and SME companies. China's central bank cut lending rates on Saturday for the fourth time since November and trimmed the amount of cash that some banks must hold as reserve. Chinese stocks pared losses in the afternoon after reports the government may suspend initial public offerings or slow their pace.
Shares of technology companies declined the most in Beijing on profit booking. Hundsun Technologies Inc. and Shenzhen O-film Tech Co. slid by the 10% daily limit Monday
Banks and financial stocks were also down, with Brokerages led declines for financial shares, with Citic Securities Co. and Haitong Securities Co. dropping more than 5%. Bank of Beijing Co. erased a 3.1% gain, falling 1%, while Ping An Bank slid 1.5%.
Hong Kong stocks down 2.6%
The Hong Kong stock market closed sharply lower, in tandem with a global sell-off on fears Greece will default on a debt repayment and crash out of the eurozone. Investor sentiment was also hurt by the continued sell-off in mainland markets, despite fresh government easing moves announced over the weekend. The benchmark index opened 103 points lower and saw its losses widen to 1,046 points in afternoon session. The Hang Seng Index dropped 696.89 points or 2.61% to finish at 25966.98, off an intra-day high of 26631.51 and day low of 25617.78. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, declined 393.53 points, or 3%, to 12694.66 points. Turnover increased to HK$186.13billion from HK$151.3 billion on Friday.
Among the 50 Hang Seng blue chips, only two stocks rose, and 47 fell, with one remaining steady. CR Power (00836) and Tingyi (00322) edged up 0.7% and 0.3% to HK$21.45 and HK$15.64. HK & China Gas (00003) was flat at HK$16.08. Lenovo (00992) plunged 5.7% to HK$10.32. It was the biggest blue chip loser. Its parent company Legend Holding (03396) made its debut in local stock exchange today. It ended at HK$42.95, or 0.07% below its IPO price.
Market heavyweights were also hard hit. China Mobile (00941) inched down 0.6% to HK$99.25. HSBC (00005) fell 2.4% to HK$70.25. Tencent (00700) declined 4.3% to HK$153.1. China central bank's rate and RRR cuts failed to support Chinese financial players. CCB (00939) fell 2.3% to HK$6.93. ICBC (01398) dipped 2.8% to HK$6.1. Ping An (02318) slid 3.9% to HK$102.5. China Life (2628) slipped 1.7% to HK$32.65.
Hong Kong's value of total retail sales in May, provisionally estimated at HK$39 billion, edged down by 0.1% compared with the same month in 2014. The revised estimate of the value of total retail sales in April dropped 2.1% compared with a year earlier. For the first five months of 2015, the value of total retail sales decreased by 1.8% compared with the same period in 2014, according to the Census and Statistics Department data released on Monday.
Sensex trim losses after a sharp intraday slide
Indian stock market closed slight down after paring sharp intra-day losses. As per provisional closing, the S&P BSE Sensex was down 127.97 points or 0.46% to 27683.87. The 50-unit CNX Nifty was down 62.70 points or 0.75% at 8,318.40.
Shares of Tech Mahindra slumped after company said in its business update announced during trading hours that the company's Q1 June 2015 results have some headwinds and tailwinds which could see a risk of marginal decline in both revenue and EBITDA (earnings before interest, taxation, depreciation and amortization) margin of the company on sequential basis.
Foreign portfolio investors sold shares worth a net Rs 203.74 crore during the previous trading session on Friday, 26 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 234.21 crore on Friday, 26 June 2015, as per provisional data released by the stock exchanges.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 2.4% to 9236.10. South Korea's KOSPI dropped 1.4% to 2060.49. New Zealand's NZX50 sank 0.9% to 5705.81. Singapore's Straits Times index lost 1.2% at 3280.18. Malaysia's KLCI declined 1.1% to 1691.92. Indonesia's Jakarta Composite index was down 0.8% to 4882.58.
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