Investors increasingly believe the Federal Reserve will raise its benchmark interest rate from a record low in December. Data on Thursday showed the US economy cooled during the third quarter but that was largely due to transitory changes in inventory levels and the underlying picture is in line with the Fed's view of a moderately strong economy. Super low interest rates have been a boon for stock markets for several years.
The BOJ held off on expanding its massive stimulus programme on Friday, preferring to preserve its dwindling policy options in the hope that the economy can overcome the drag from China's slowdown without additional monetary support.
The Federal Reserve, which kept its rates on hold as expected on Thursday, took the unusual step of strengthening its language about timing in its statement, making it clear that a December rate hike was still possible. The Fed also removed a previous warning about slowing global growth.
Among Asian bourses
Australia market falls for fifth day in row
The Australian share market ended lower for fifth consecutive session, due to selloff in consumer staples, bullion miner, resources, and financial issues. The benchmark S&P/ASX 200 index declined 27.50 points, or 0.52%, to 5239.40 points, while the broader All Ordinaries index sank 21.60 points, or 0.41%, to 5288.60 points. The benchmark ASX200 index fell 2.1% and the broader All Ordinaries index dropped 1.8% for the week. For the month, Australian market managed to lift 4.3%.
Consumer staples issue extended losing streak, with Woolworths leading retreat, down 2.4% to A$24.11 after dreadful quarterly sales report on Thursday and warning that net profits will fall as much as 35% in the December between A$900 million and A$1 billion. Competitor Wesfarmers dropped 5.4% to A$39.41, while Metcash losing 10.5% to A$1.19.
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The banks and financial stocks were down after mixed full-year earnings reports this week from Australia & New Zealand Banking Group and National Australia Bank, two of the country's biggest lenders, have raised concerns about the pace of earnings growth and dividend payouts, ANZ Banking Group fell 3.4% to A$27.21, Commonwealth Bank shed 0.6% to A$76.73, National Australia Bank declined 1% to A$30.15, and Westpac shed 1.7% to A$31.38.
Shares of bullion miners and other resources companies tumbled on tracking pullback in base metal and gold prices. Copper futures fell in U.S. trading overnight, while gold prices slid in Asia trade Friday to a near three-week low. BHP Billiton weakened 1.9% to A$23.02 and Rio Tinto slipped 1% to A$50.65. Junior iron ore miner Fortescue sank 5% to A$2.09. Gold Miner Newcrest lost 3.2% to A$12.31.
Nikkei rises to two-month high
The Japanese share market advanced to highest level in two months, supported by reports that the government is considering a budget of over 3 trillion yen even as the Bank of Japan kept its policy unchanged. Total 29 out of 33 TSE first-section sector sub-indexes ended higher, with Air Transportation, Pharmaceutical, Precision Instruments, Metal Products, Services, Land Transportation and Pulp & Paper issues being major gainers. The Nikkei Stock Average advanced 147.39 points, or 0.78%, to end at 19083.10 points, the highest close since Aug 28. The broader Topix index has gained 0.72%, or 11.09 points, to 1558.20 at the close. For the week, the Nikkei 225 index rose 1.4%, while it jumped 9.7% for the month, the best monthly gain in two years.
Tokyo markets were subdued in the morning trade after the BOJ's monetary-policy decision on washing out expectation of further policy easing from central bank to support the economy and bolster inflation. But, stocks recovered in afternoon trade following a report that the Japanese government is preparing a more-than three trillion yen supplementary budget to build nursing-care facilities and aid farmers, who face tougher competition as the country prepares to join a trans-Pacific trade pact.
The Bank of Japan decided kept its monetary policy unchanged on Friday, betting its already massive level of stimulus is sufficient to revive growth. The decision came after government data showed Japan's consumer prices fell for the second consecutive month in September, with the core consumer price index excluding fresh food declining 0.1% from a year earlier amid prolonged low crude oil prices.
Shares of Sony Corp advanced 0.4% to 3480 yen after electronics giant kicked off the upbeat news by reporting a six-month net profit of 116 billion yen, crediting its PlayStation video game unit and smartphone parts business for a big improvement in its finances. Sony said its net profit of 116 billion yen in the first half of its fiscal year, reversed a 109.2 billion yen loss a year earlier. It also reversed a year-earlier operating loss, although sales ticked down 0.3% to 3.7 trillion yen.
Panasonic Corp jumped 3.4% to 1435 yen after electronics conglomerate said its six-month net profit soared 37% 111.33 billion yen, while sales ticked up 1% to 3.76 trillion yen, as it focuses on casting off money-losing businesses. The company has shifted its attention to its lesser-known endeavors, including energy and an auto division that makes various products found in vehicles, from electrical components to car navigation systems.
Nippon Steel & Sumitomo Metal gained 0.6% despite lowering its profit forecast for the year through March 2016 and cut its production target for the October-March period. Rival JFE Holdings closed up 2.4%, paring early losses, after cutting its guidance and production forecast.
Baby bottle maker Pigeon jumped 10.7%, while toiletry goods maker Kao and personal care goods maker Unicharm rose more than 3% each, thanks to Beijing's easing of family planning restrictions. By contrast, Japan's dominant condom maker Okamoto Industries slid 10.1% on fears that the new ruling may dent Chinese demand for its products.
China stocks end mixed
Headline equities of the Mainland China market ended mixed, on caution ahead of key economic figures including manufacturing PMI data next week. The Shanghai Composite Index declined 0.14%, or 4.75 points, to close at 3382.56 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, grew 0.02%, or 0.46 points, to 2014.86. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, was down 0.28%, or 7 points, to close at 2478.28.
Shares of infant formula makers to toy producers jumped after the ruling Communist Party announced the government would partially relax its strict regulations on population control. Beingmate Baby & Child Food Co. jumped 10% daily limit, while Biostime International Holdings Ltd., a Chinese infant-formula company, rose 5.1%
Financials were mixed amid earnings releases. The country's biggest brokerage Citic Securities climbed 3.7% after delivering a rise of 54% in third-quarter earnings. Bank of China, which announced a profit fall in the third quarter, slipped 0.3%. China Construction Bank - the mainland's second-biggest lender by assets - finished little moved after reporting flat profit growth for the third quarter as bad debt rose.
Aluminum Corp. of China, the nation's biggest producer, fell 2.1% after reporting a loss of 959 million yuan in the third quarter
Hong Kong: Market falls 0.8%
Hong Kong stock market ended below the neutral line, as sentiments weighed down amid worries about the implications of U.S. interest rate rise before the end of the year for the global economy and markets. The benchmark Hang Seng Index declined 179.90 points, or 0.8%, to 22640.04 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, fell 42.80 points, or 0.41%, to 10396.58 points. T Turnover reduced slightly to HK$69.32 billion from HK$70.7 billion on Thursday.
Auto makers rose across the board. Dongfeng Motor (00489) gained 3.9% to HK$11.24. BYD (01211) nudged up 0.2% to HK$48.4. Brilliance China (01114) and GAC Group (02238) put on 2.9% and 1.5% to HK$10.78 and HK$6.82. AIA (01299) was the biggest blue-chip loser. It dipped 3% to HK$45.6 after a 20% rally in this month.
China Huarong Asset Management gained 0.3% to trade at HK$3.100 in its stock market debut, versus its IPO price of HK$3.09, after raising $2.3 billion in the city's largest initial public offering (IPO) in 2015.
Hong Kong-listed baby goods-related counters soared after China's decision to ease family planning restrictions to allow all couples to have two children after decades of a strict one-child policy. China Child Care (01259) soared 40% to HK$1.05. Miko International (01247) jumped 16.4% to HK$0.71. Hengan (01044) added 2% to HK$83.95. Goodbaby (01086) and Playmates Toys (00869) rose 2.3% and 3.6% to HK$3.58 and HK$1.64 respectively. Dairy industry was another sector that benefits from the new policy. Mengniu Dairy (02319) surged 3.4% to HK$15.06. It was the biggest blue-chip winner. Yashili (01230) shot up 6.3% to HK$2.21. Biostime (01112) leaped 5% to HK$17.28. But China Modern Dairy (01117) plunged 7.5% to HK$2.34.
Sensex extends losses for fifth day
Indian stock market declined for fifth consecutive day, as quarterly results from ITC and Larsen & Toubro disappointed investors and raised concerns about the health of the corporate sector. The sentiments were also affected after Moody's projected that RBI will keep rates on hold for the remainder of 2015, with a small chance of another cut early next year. The barometer index, the S&P BSE Sensex, lost 209.93 points or 0.78% at 26,628.21, as per the provisional closing data. The Nifty lost 45.95 points or 0.57% at 8,065.80, as per the provisional closing data.
ITC shares fell 4.5% after the company's September quarter earnings missed analysts' estimates. Shares in industrial heavyweight Larsen & Toubro fell 4.11% after its second-quarter net profit missed street estimates. The company also downgraded its order inflow guidance to 5-7% from 15% earlier.
ICICI Bank jumped 2.04% after it reported a 12% increase in quarterly profit due to faster retail loans growth.
Shares of Kotak Mahindra Bank jumped 3.77% after the company reported a better-than-expected 28% increase in quarterly profit and a stable bad loan ratio.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index declined 0.2% to 8554.31. South Korea's KOPSI fell 0.2% to 2029.47. Singapore's Straits Times index slipped 0.1% at 2998.35. Indonesia's Jakarta Composite index sank 0.4% to 4455.18. Malaysia's KLCI fell 0.1% to 1665.70. New Zealand's NZX50 sank 0.3% to 5986.37.
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