Investment rationales for cyclical assets remain flimsy amidst speculation that US interest rates might increase earlier than expected. Higher US interest rates could attract FII investment to US from emerging global markets. US Fed is very close to their rate increase timeline as fed chair Yellen hinted after policy review meeting.
The China official inflation data today pointed to an economy losing momentum. The China Bureau of Statistics said in Beijing today that consumer price index rose 2% from a year earlier, compared with growth of 2.3% in July. The rise in the inflation gauge undershot the median 2.2% gain forecast by economists. The data provides more evidence of economic slowdown but economists are divided over whether Beijing will use the extra room to announce fresh stimulus measures.
Fears of an escalation of the Middle East conflict renewed after Obama told Americans in a speech late on Wednesday that he had authorised US air strikes for the first time in Syria and more attacks in Iraq in a broad escalation of a campaign against the Islamic State militant group.
Among Asian bourses
Aussie market falls on weak commodity prices
Australian share market ended lower, despite stronger official jobs data for August, as weaker iron ore and oil prices dragged on the resources sector. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each declined by 0.5% to 5546.10 points and 5546.90 points, respectively. Turnover was relatively healthy with 1.96 billion shares worth of A$3.90 billion traded today.
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Australian Bureau of Statistics data showed the jobless rate dropped to 6.1% last month, coming off a 12-year high of 6.4% in July. The seasonally adjusted labour force participation rate was increased by 0.4 percentage points to 65.2% in August 2014. The Australian economy created 121000 new jobs to 11703500 in August 2014. But many market watchers voiced scepticism about the reliability of both the July and August employment data due to recent changes in the methodology used to collate it.
Materials and resources stocks declined the most in Sydney, on tracking fall in iron ore and weaker base metal prices. The spot price for iron ore, delivered in China extended its losing streak, was shedding 1.2% to $US82.20 a tonne, the lowest level since September 23, 2009.
Resources giant BHP Billiton fell 0.8% to A$35.50, while main rival Rio Tinto edged up 0.1% to A$61.56. Iron ore miner Fortescue Metals Group lost 1.5% to A$3.87 as Bell Potter analysts speculated the weak iron ore price could prompt it to delay infrastructure divestment plans.
Nikkei rises to 8-month high as yen weakens to six-year low
Japanese share market closed at fresh eight-months high, as yen depreciation to weakest level since 2008 against the dollar bolstered appetite for export related shares. The benchmark Nikkei 225 index at the Tokyo Stock Exchange gained 0.76%, or 120.42 points, to finish at 15909.20, its best finish since early January, while the Topix index of all first-section shares added 0.34%, or 4.45 points, to 1311.24.
The yen extended its depreciating streak, trading nearly at six-year low in against the greenback on speculation that the U.S. Federal Reserve could soon raise rates. Higher interest rates would dent demand for safe-haven units such as yen. The Japanese yen lost 0.1% to 106.93 per dollar in mid-afternoon after touching the lowest since September 2008. The weaker yen benefits Japanese exporters by increasing their overseas earnings in yen terms while giving them scope to price goods more competitively in foreign markets.
Export related stocks extended winning streak, on the back of yen weakening against the greenback. A weaker yen inflates the profitability of Japanese exporters. Canon Inc, the world's biggest camera maker, gained 0.3% to 3505 yen. Toyota Motor Corp, the world's biggest automaker, advanced 0.8% to 6218 yen. Honda Motor Co, a carmaker that gets 84% of sales abroad, advanced 1% to 3663.50 yen. Nissan Motor Co, which gets 78% of sales outside Japan, rose 1.1% to 1,053.5 yen.
Shares of Sony Corp rose 2.7% after U.S. mass media company Viacom announced that it has agreed to provide 22 of its networks for Sony's upcoming cloud-based TV service.
SoftBank advanced 2.9% to 8,180 yen, helped by reports that demand for Alibaba Group Holding's IPO shares may push the share price above the indicative $60-$66 range. SoftBank has a 34% stake in Alibaba, and stands to receive billions in windfall profits once shares list on September 19.
Shanghai Composite falls 0.29%
Mainland China share market ended down in volatile trading, amidst weaker than expected Chinese inflation data and on concern recent stocks rally were excessive relative to the outlook for the economy. The eight out of ten SSE sectors declined, with shares of consumer staples companies being major losers. The benchmark Shanghai Composite closed 6.63 points down at 2311.68. The CSI 300 declined 8.98 points to 2423.45.
Shares of consumer-staples companies declined the most among the Shanghai industry groups. Inner Mongolia Yili, China's biggest dairy producer by sales, dropped 4%. Jiangsu Yanghe Brewery Joint-Stock Co. fell 2.9%. Henan Shuanghui Investment & Development Co., the nation's biggest listed pork processor, retreated 2.2%.
Hang Seng slips for fifth day
Hong Kong share market finished the quiet session down, as risk aversion selloff, with shares of automakers and energy companies being major losers. The Hang Seng Index ended 42.72 points, or 0.17%, down at 24662.64. The benchmark index has fallen for five consecutive trading days, losing a combined 656 points. Market turnover decreased to HK$70.89 billion from HK$79.72 billion on Wednesday.
Shares of automakers and energy companies declined the most in Hong Kong bourse. Cnooc fell 1.1% to HK$14.64. PetroChina Co retreated 1.5% to HK$10.68. Dongfeng Motor fell 3.5% to HK$13.38. Great Wall Motor Co, China's biggest maker of sports-utility vehicles, dropped 2% to HK$32.25.
Telecom stocks closed higher. China Unicom put on 1.6% to HK$13.66. China Telecom (00728) rose 1% to HK$5.04. China Mobile (00941) also added 1.3% to HK$100.
Lenovo (00992) dipped 4.2% to HK$11.88 after its chairman Yuanqing Yang cut his stake in the company by 18.2 million shares.
Solar players were generally higher. Xinyi Solar (00968) soared 7.7% to HK$2.67. JP Morgan yesterday raised its target price for the company to HK$3.8. GCL-Poly (03800) gained 1.3% to HK$3.04. Hanergy solar (00566) was up 1.6% to HK$1.31.
Sensex ends down
Indian stock market ended lower for the third consecutive day on concerns foreign investors might slowdown their purchases of emerging market stocks if the US Federal Reserve hikes interest rates earlier than expected. The 30-share BSE index Sensex was down 61.54 points at 26,995.87 and the 50-share NSE index Nifty was down 8.4 points at 8,085.70.
Sun Pharmaceuticals Industries fell 4.5% to Rs.821.25 after Business Standard reported that its manufacturing facility at Halol in Gujarat was under a surprise inspection by the US Food and Drug Administration (US FDA). The move may have been triggered by a number of recent recalls from the plant, the report said. ONGC fell 3.7% to Rs.429 after the government on Wednesday approved the sale of a 5% stake in the company.
ONGC, Coal India and NHPC declined in volatile trade after the Cabinet Committee on Economic Affairs on Wednesday, 10 September 2014, approved stake-sale in these three state-run firms.
Elsewhere in the Asia Pacific region-- Taiwan's Taiex index declined 0.37% to 9322.95. South Korea's KOSPI index fell 0.74% to 2034.16. Singapore's Straits Times index rose 0.26% to 3347.28. Malaysia's KLCI has lost 0.2% to 1870.44. New Zealand's NZX50 rose 0.49% to 5262.326. Indonesia's Jakarta Composite index declined 0.19% to 5133.03.
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