Asia Pacific share market closed down on Wednesday, 09 December 2015, extending a global equities slump spurred by worry about global growth prospects and falling commodities prices.
Investors sold off riskier assets amid concerns over the global economic outlook following declines across European and U.S. equity markets overnight.
Commodities prices have continued to lose ground, with iron ore falling 1.1% overnight to $US38.65 per metric tonne. A decision by the OPEC cartel last week not to cut crude output preceded another slide in prices to levels not seen for seven years as investors fret about an oversupply and weak demand in the struggling global economy. U.S. crude traded above $38 a barrel after sliding to as low as $36.64 on Tuesday
Traders were looking ahead to next week's Federal Reserve monetary policy meeting. The Fed is widely expected to announce an increase in interest rates following the meeting, but traders will pay close attention to the wording of the statement.
Among Asian bourses
Australia stocks falls on global growth fears
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The Australian share market declined, as investors worry about global growth prospects amid continued rout in oil and other commodity prices. Meanwhile selloff pressure mounted after the release of data showing a decline in Australian consumer confidence in December from the month before and a sequential fall in home-loan approvals in October. Among the ASX industry category, notable losers comprised industrials, telecom, property trusts, realty, and financials issues, while materials and energy stocks clawed back some of yesterday's losses. At the close, the benchmark S&P/ASX 200 index ended 28.10 points, or 0.55%, down at 5080.50 points.
Shares of materials and resources companies sold down heavily on Tuesday clawing back some losses. Global miner BHP Billiton closed up 0.65% to $17.16 after losing 5.2% yesterday. Rio Tinto today was down again, 0.83% to $42.05, adding to yesterday's 4.3% fall. Fortescue Mining added 0.8% to A$1.82. Oil and gas producer Woodside Petroleum rebounded 0.5% to A$27.03 and Santos grew 5.7% to A$3.50. Gold miner Evolution rallied 6.1% to A$1.39 while Arrium jumped 6.9 per A$0.062.
Shares of financials and realty players were major drag on the Sydney market, after the release of data showing a decline in Australian consumer confidence in December from the month before and a sequential fall in home-loan approvals in October. Australian Bureau of Statistics data showed total housing finance was down 2% in October, while investor housing finance had plunged 6%. Australia & New Zealand Banking Group dropped 1.5% to A$26.43, Westpac Banking Corp 0.6% to A$32.05, and National Australia Bank 1.2% to A$28.96, while Commonwealth Bank of Australia bucked the trend, inching 0.2% higher at A$80.29.
Spotless shares fell 4% to A$1.10 after the contractor's new boss Martin Sheppard flagged a strategy refresh, but said mergers and acquisitions would continue to be feature. The stock is now down 50% on its level before last week's profit warning.
Nikkei falls to one-month low
The Japanese share market tumbled to one-month low, as risk aversion selloff continued amid worry about global growth prospects and falling commodities prices. Total 28 out of 33 TSE industry groups declined, with the day's notable losers comprised Pharmaceutical, Insurance, Foods, Agriculture & Forestry, Retail Trade, and Iron & Steel issues. The 225-issue Nikkei Stock Average declined 191.53 points, or 1%, to 19301.07, the benchmark's lowest close since Nov. 6. The Topix index of all Tokyo Stock Exchange First Section issues fell 13.15 points, or 0.84%, to 1555.58.
Shares of exporters' were mixed, as some companies' stock prices were more vulnerable to a stronger yen than others. Worries about the global economy caused the U.S. dollar to weaken against the yen and drift around the Y122 level. Panasonic Corp. shed 3.2%, while Toyota Motor Corp. gained 0.7% and Nissan Motor Co. added 0.4%.
Shares of insurance companies declined after Barclays Plc lowered its price target on several insurers. Dai-ichi Life Insurance Co. sank 3.4%, while T&D Holdings Inc. fell 2.6%.
Komatsu fell, bringing its two-day decline to 3%, after the world's second-largest maker of mining and construction equipment said it faces another tough year ahead as falling commodity prices cool customers' investment plans.
Mitsubishi Heavy Industries dropped 2% after reports that the company wouldn't meet a December deadline for delivering a cruise ship to Carnival Corp., likely resulting in losses on the project.
Japan core machine orders rose 10.7% on month in October, the Cabinet Office said on Wednesday - worth 903.8 billion yen, following the 7.5% jump in September. On a yearly basis, core machine orders advanced 10.3% following the 1.7% contraction in the previous month.
China market clings gain line
The Mainland China stock market ended marginally higher after fluctuating in and out of the neutral line. The rebound was led by property shares on policy support hopes as well as signs that insurers are scrambling for stakes in major real estate firms. The market was also aided by stabilizing resource shares, bolstered by evidence that Beijing is accelerating consolidation among metal producers. The Shanghai Composite Index added 0.07%, or 2.37 points, to close at 3472.44.The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.32%, or 7.06 points, to close at 2214.21. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, slid 0.88%, or 23.75 points, to close at 2667.91.
Shares of real estate sector shot up on hopes that Beijing will provide more support for the industry. A media report said some lower-tier cities are subsidising farmers to buy houses. Shares of China Vanke surged 10%, the upward limit, after realty player said on Wednesday that Anbang Insurance Group had been acquiring its shares, and currently owned 5%. It is the second insurer collecting Vanke shares in the secondary market.
Resource-related shares were firm after China Minmetals Corp's acquisition of China Metallurgical Group Corp fuelled expectations of more consolidation in the mining sector to tackle industry
Latest data from National Bureau of Statistics of China showed that the consumer price index (CPI) went up by 1.5% year-on-year in November 2015. The prices grew by 1.5% in cities and 1.3% in rural areas. The food prices went up by 2.3%, and the non-food prices increased 1.1%. The prices of consumer goods went up by 1.2% and the prices of services grew by 2.1%. On average from January to November, the overall consumer prices were up by 1.4% over the same period of the previous year.
Hong Kong stocks end lower
The Hong Kong stock market declined for fifth consecutive session, following weakness in overseas markets amid plunging oil prices, with shares of coal, banking, construction and metals companies leading the losses. The benchmark Hang Seng Index declined 101.37 points, or 0.46%, to 21803.76 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, declined 102.11 points, or 1.06%, to 9558.76 points. Turnover reduced to HK$65.99 billion from HK$76.3 billion on Tuesday.
Shares of oil majors were firmer on bottom fishing despite drop in crude oil prices. CNOOC (00883) rebounded 1.5% to HK$8.42. Sinopec (00386) edged up 0.2% to HK$4.56. PetroChina (00857) dipped 1.3% to HK$5.23.
Automakers jumped across the board after China was reportedly plans to initialize a new round of rural subsidy plan for auto purchase. Geely (00175) shot up 6% to HK$4.36. Dongfeng Group (00489) surged 5.7% to HK$10.84. Great Wall Motor (02333) leaped 5.6% to HK$9.95. BYD (01211) gained 5.3% to HK$42.9.
HKEx (00388) fell 2.6% to HK$198.3 on talks that the company has dismissed its information research department.
China Vanke (02202) bucked the downward, rising 6.2% to HK$21.5 on news of Anbang Insurance's stake build-up. CR Land (01109) put on 2.1% to HK$22.1. COLI (00688) gained 1% to HK$27.05.
Sensex slides for the sixth straight session
Losses for metal sector stocks and index heavyweights Reliance Industries, L&T and Infosys led fresh slide for key benchmark indices. The barometer index, the S&P BSE Sensex, lost 260.03 points or 1.03% at 25,050.30, while the Nifty fell 89.20 points or 1.16% at 7,612.50, as per the provisional closing data.
Diminishing hopes that the constitutional amendment bill on goods and services tax (GST) will be passed during the ongoing winter session of parliament triggered the latest slide on the domestic bourses. The Congress Party has accused the government of pursuing a political vendetta against the Gandhi family. The constitutional amendment bill for the implementation of GST, which subsumes all indirect taxes to create a unified market across the country, has been cleared by the Lok Sabha and is awaiting legislative passage in the Rajya Sabha. A constitutional amendment bill requires a majority of two thirds in the house for its passage. The BJP-led NDA has a comfortable majority in Lok Sabha, but lags in numbers in the Rajya Sabha. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country.
Shares of Dr Reddy's Laboratories (DRL) and Glenmark Pharmaceuticals edged lower on reports the latest political developments in Venezuela might impact the business prospects of these two companies. DRL fell 2.27% at Rs 3,001. Glenmark Pharmaceuticals tumbled 5.05% at Rs 882.25. Media reports suggest that the victory of the Opposition party in the Venezuela National Assembly elections on Sunday, 6 December 2015, might have an impact on Indian drug companies due to a change in the political landscape of the South American country and the many economic reforms the Opposition plans to roll out there. Reports indicated that Venezuela might even go for a currency devaluation. There is a likelihood that the currency will be converted to market-determined rates from a fixed-rate regime, reports suggested. DRL and Glenmark Pharmaceuticals reportedly earn decent revenue from Venezuela.
Meanwhile, DRL announced after market hours yesterday, 8 December 2015, that it has submitted its response to the United States Food and Drug Administration (USFDA) on 7 December 2015. It may be recalled that the USFDA in its warning letter issued to the company dated 5 November 2015, identified significant deviations from current good manufacturing practice (CGMP) at DRL's two pharmaceutical manufacturing facilities in Andhra Pradesh and a unit in Telangana.
TCS rose 1.49% at Rs 2,364.20 after the company announced that Oman Housing Bank (OHB) has selected TCS BaNCS Universal Banking solution to help deliver enhanced end-customer experience in its endeavor to become a leading housing finance bank in the region. The announcement was made during market hours today, 9 December 2015.
Bharat Heavy Electricals (Bhel) rose 2.64% at Rs 169 on reports that Heavy Industry Minister Anant Geete clarified to the media that there were no plans of divestment of the government's stake in the company. As on 30 September 2015, the government held 63.06% stake in Bhel. In March 2014, the government had sold 4.66% stake in the company.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 1.4% to 8229.62. South Korea's KOPSI slipped 0.04% to 1948.24. Malaysia's KLCI slipped 0.6% to 1659.36. Singapore's Straits Times index lost 0.5% at 2861.19. New Zealand's NZX50 rose 0.3% to 6053.55.
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