The regional market opened lower amid a risk-averse mood following the news that the North Korean missile, launched earlier on Tuesday, fell into the Pacific Ocean about 1,180 km east of Cape Erimo in Hokkaido after flying over the Oshima Peninsula.
The missile test is the latest in a series of recent provocations by Pyongyang, testing US President Donald Trump, his South Korean counterpart Moon Jae-In and Japanese Prime Minister Shinzo Abe and raising fresh fears of conflict with the nuclear-armed nation.
The latest act of provocation by North Korea comes only weeks after US President Donald Trump engaged in a war of words with Pyongyang, which had threatened to fire missiles at Guam, a US held Pacific island. Market players will be paying close attention to high-ranking U.S. government officials' possible comments on the North Korean missile firing as clues for Wednesday's trading.
Among Asian bourses
Australia Stocks end in a sea of red
Australian equity market finished session lower, as risk aversion selloff flared by escalating Korean peninsula geopolitical tensions after North Korea fired a missile over northern Japan. Most of the ASX sectors dived into sea of red, with financials and consumer discretionary stocks being major losers. At the close, the S&P/ASX 200 index was down 0.7%, or 40.89 points, to 5669, while the broader All Ordinaries index also closed down 0.7%, or 37.6 points at 5733.6. Falling stocks outnumbered advancing ones on the Sydney Stock Exchange by 685 to 470 and 347 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was up 7.43% to 13.634.
Financial sector was biggest drag on the benchmark index, with Commonwealth Bank leading retreat, down as much as 1.8% after Credit Suisse slashed its target price for the bank to A$80 to A$89. The move follows an announcement on Monday from Australia's banking regulator that it had ordered an independent inquiry into CBA after a money laundering scandal in which the bank's systems were allegedly used by criminals to launder tens of millions of dollars in cash. Among other lenders, Westpac shares lost 1.8%, ANZ dropped 1.7% and National Australia Bank slid 1.6%.
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Gold miners fared better as the price of the yellow metal spiked to its highest level since the result of the US election following North Korea's missile test early on Tuesday morning. Gold was up 0.6% at $1,317.46 an ounce. Resolute Mining was up 6.2% while Saracen Mineral Holdings gained 4.5%.
Japan Stocks fall on heightened geopolitical concerns
The Japan share market finished session lower, weighed down by heightening geopolitical concerns after North Korea launched a missile over Japan. Investor sentiment was also battered by the yen's rise against the dollar, which was prompted by the missile launch. Most of TSE sectors declined with insurance, pulp and paper, and securities house-related issues comprised those that declined the most by the close of play. The 225-issue Nikkei Stock Average lost 87.35 points, or 0.45%, to close the day at 19,362.55. The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, shed 2.36 points, or 0.15%, to finish at 1,597.76. Falling stocks outnumbered advancing ones on the Tokyo Stock Exchange by 1668 to 1469 and 307 ended unchanged. The Nikkei Volatility, which measures the implied volatility of Nikkei 225 options, was down 4.47% to 14.52.
Clothing store chain operator Fast Retailing, major retailer FamilyMart Uny Holdings and convenience store operator Ministop were downbeat as they went ex-dividend. Askul lost ground after the online stationery seller announced disappointing August sales data. By contrast, defense equipment-related Ishikawa Seisakusho and Howa Machinery were hunted, reflecting the growing geopolitical tensions over North Korea.
Japan's Labor Force Survey from the Ministry of Internal Affairs and Communications released on Tuesday. The seasonally adjusted average unemployment rate stood at 2.8% in July, unchanged from June. Backed by rising job offers, the 2.8% unemployment rate, which was also seen from February to April this year, remained at the lowest level since June 1994, when it was also at 2.8%. The number of employed rose 140,000 (+0.2%) month-on-month vs. a rise of 120,000 (+0.2%) in June, while the number of unemployed rose 10,000 (+0.5%) after falling 160,000 (-7.8%) in June.
China Market ends mixed on profit booking
The Mainland China equity market closed session mixed on Tuesday, 29 August 2017, as investors opted to book profit after the benchmark index hit a 20-month peak previous day. Most sectors barely moved, with losses led by defence and real estate stocks. Investors were awaiting for latest readings on the health of China's factory and service sectors due to release later this week. The Shanghai Composite Index gained 0.1%, or 2.57 points, to 3,365.23 while the CSI 300 Index, which tracks large companies listed in Shanghai and Shenzhen, dropped 0.2% to 3,834.54.
Defence stocks slid after India and China appeared to end a months-long military standoff in the Himalayas. China's foreign ministry said yesterday that India withdrew personnel and equipment from its territory, while India said both sides agreed to an expeditious disengagement of troops at Doklam, a plateau near the Indian border that is claimed by both China and Bhutan. Jiangxi Hongdu Aviation Industry slumped 4.1% to 17.65 yuan in Shanghai and North Navigation Control Technology lost 3.4% to 15.18 yuan. Avic Heavy Machinery dropped 3.6% to 14.71 yuan.
The Chinese currency renminbi, or yuan, strengthened against the U.S. dollar, after the central bank fixed a mid-point rate higher following a slide in the greenback. The People's Bank of China set its midpoint rate at 6.6293 per dollar, again the strongest since Aug. 19, 2016. The level was 60 pips or 0.1% firmer than the previous fix. In the spot market, the onshore yuan opened at 6.6240 per dollar and was changing hands at 6.6087 at midday, 37 pips softer than the Monday late session close but 0.31% stronger than the midpoint.
Hong Kong Stocks snaps five day rally
The Hong Kong stock market finished lower for the first time in six consecutive sessions on Tuesday, 29 August 2017, as investors lost their appetite for risk by heightening geopolitical concerns after news of a fresh North Korean missile test early Tuesday morning over northern Japan. Most sectors fell, with IT and financial shares leading the decline. The Hang Seng Index dropped 0.4%, or 98.28 points, to 27,765.01, ending a five-day, 3% gain. The Hang Seng China Enterprises Index, or the H-share gauge, also retreated 0.4% to 11,296.08 points. Turnover decreased to HK$94.9 billion from HK$117.4 billion on Monday.
Financials led the decline on Tuesday, with Bank of China falling 0.2% to HK$4.10 as the most heavily traded stock on the Hang Seng Index. HSBC slipped 0.7% to HK$74.80 and China Construction Bank lost 0.3% to HK$6.98. China Life sank 1.6% to HK$24.90 and AIA Group eased 0.9% to HK$59.25. Ping An Insurance Group edged down 0.2% to HK$62.90.
Macau gaming counters rose across the board, defying the general downtrend of the broader market. Galaxy Entertainment (00027) added 2.8% to HK$47.8. Sands China (01928) advanced 1.3% to HK$34.55. Wynn Macau (01128) rose 1.8% to HK$16.98. MGM (02282) added 1.8% to HK$15.48.
Evergrande surged 12% to a record high of HK$25.50 after the Chinese developer reported a whopping 832% jump in first-half profit to 18.8 billion yuan (US$2.84 billion) on Monday, as property sales soared and prices climbed.
Sensex declines amid negative global cues
Key benchmark indices dropped over 1% as sharp drop in European stocks and subdued Asian stocks weighed on sentiment on the domestic bourses. The barometer index, the S&P BSE Sensex, fell 362.43 points or 1.14% to settle at 31,388.39. The Nifty 50 index shed 116.75 points or 1.18% to settle at 9,796.05. Market sentiment was dull amid geopolitical tensions in the aftermath of North Korea firing a missile over northern Japan. All the nineteen sectoral indices on BSE were in the red. The Sensex and the Nifty hit lowest closing level in a week. Both these indices snapped four-day winning streak.
Bharat Heavy Electricals (Bhel) shed 1.09%. The company announced that it has successfully commissioned the first unit of 2x30 megawatts (MW) Tuirial Hydro Electric Project (HEP) in Mizoram. The announcement was made during market hours today, 29 August 2017.
NTPC dropped 2.8% to Rs 168.50. The company said that government will sell 5% stake in NTPC at a floor price of Rs 168 per share through a two-day offer-for-sale (OFS) beginning today, 29 August 2017, with an option to issue a similar number of shares in case of over subscription. The sale of 41.23 crore shares, or 5% equity, would fetch about Rs 7000 crore to the exchequer. The two-day OFS opened for institutional investors today, 29 August 2017, and retail investors would get to bid tomorrow, 30 August 2017.
IT major Infosys dropped 1.45% at Rs 927.55. The company said that some of the company's promoters would participate in the upcoming share buyback of the company. The IT firm had announced a Rs 13000-crore share buyback on 19 August 2017, a day after CEO and MD Vishal Sikka resigned from the company. The company would buy back up to 11.30 crore shares aggregating up to 4.92% of the paid-up equity capital via tender route at a price of Rs 1,150. The announcement was made after market hours yesterday, 28 August 2017.
Bharti Airtel dropped 1.61% at Rs 427.95. The company announced after market hours yesterday, 28 August 2017 that the proposed acquisition of Tikona Digital Networks has now been completed. With this, Tikona Digital Networks has become a wholly owned subsidiary of Bharti Airtel. The transaction for the trading of the spectrum in Rajasthan circle is still pending for approval from the department of telecom (DoT).
Reliance Industries declined 2.17% at Rs 1,531.75. The company proposed to make an offer for issuance of non-convertible debentures (NCDs series A) (1st tranche) on private placement basis on 31 August 2017 aggregating Rs 5000 crore, to be listed on the Stock Exchanges. The net proceeds of the issue will be utilised inter-alia for refinancing of existing borrowings and for any other purpose in the ordinary course of business. The announcement was made after market hours yesterday, 28 August 2017.
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