Headline shares of Asia Pacific market mostly declined on Thursday, 28 August 2014, as profit-takers continued cashing in amidst heightening geopolitical risk after ongoing conflicts in Ukraine and Iraq-Syria escalated. The MSCI Asia Pacific Index slipped 0.3% to 148.27.
Regional shares opened lower and remained in negative territory for the duration of trading, partly due to geopolitical tension after Ukraine accused Russia of launching a new military incursion across its eastern border.
Although, peculation of further policy stimulus in the euro zone after the European Central Bank mulls further easing monetary policy helped to limit loss.
European Central Bank president Mario Draghi commented last week in Jackson Hole, Wyoming, that the ECB is set to implement more monetary stimulus measures to prop up the flagging European Union economy and to ward off the threat of deflation in the bloc. The comments have raised expectations that the ECB could announce even more monetary policy stimulus over coming months. The prospect of yet further lashings of liquidity in Europe was taken as a positive for emerging markets.
Among Asian bourses
Nikkei falls 0.48% on profit booking, stronger yen
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Japanese share market declined, as a stronger yen and a muted session on Wall Street overnight triggered profit taking. The benchmark Nikkei 225 index eased 74.96 points to 15,459.86, while the Topix index of all first-section shares was down 5.18 points at 1,280.74.
Exporter shares fell as the yen advanced. The yen rose 0.1% to 103.76 per dollar after gaining 0.2% yesterday. Toyota lost 0.7% to 5,935 yen. A stronger yen is bad for exporters, as they have less latitude to cut prices on goods they sell overseas and also can't exchange their dollars for as many yen when repatriating profits. Nikon Corp., the world's No. 2 camera maker, decreased 0.4% to 1,499.5 yen. Japan Tobacco Inc., which gets more than half its sales abroad, slid 0.8% to 3,581 yen
Shipping stocks advanced in Tokyo after media reports that shipping company is set to double ROE to 10% by fiscal year 2019. Kawasaki Kisen gained 3.3% to 251 yen after Credit Suisse Group AG raised its rating for the company to outperform from underperform with its price target lifted to 290 yen from 200 yen. Mitsui OSK declined 1.8% to 380 yen after Japan's No. 2 shipper's price target was cut to 370 yen from 430 yen at Barclays, which kept its equalweight rating on the shares.
Nitto Denko Corp was up 2.6% to 5420 yen following a Macquarie target price hike to Y6,400 from Y5,700 citing hopes for the adoption of new polarizer films in the smartphone, tablet PC, and eventually TV markets in the next few years.
Shares of Japan Airlines added 0.9% following a Nikkei report that it will order 32 regional jets that Mitsubishi Aircraft is readying for commercialization in 2017 to cut fuel costs. The price tag will likely near Y150 billion, the paper said.
All Ordinaries ends down
Australian share market declined amid fear of geopolitical risk escalation after Russia's military involvement in Ukraine and continued drop in the iron or prices. The benchmark S&P/ASX 200 Index closed 26.80 points down at 5624.40 and the broader All Ordinaries Index lost 27.60 points to 5621.30.
The financial sector declined, with 3 out of big 4 lenders being the major loser. Commonwealth Bank of Australia rose 0.02% to A$81.14. Westpac Banking Corp declined 0.3% to A$35.01, ANZ Banking Group 0.5% to A$33.37 and National Australia Bank 0.1% to A$34.77.
Materials and resources stocks declined as iron ore prices fell to near five year lows. Resources giant BHP Billiton fell 1.2% to A$36.88. Main rival Rio Tinto lost 1.7% gain at A$63.06 and Fortescue Metals fell 3.9% to A$4.14. Atlas Iron shares fell 7.3% to 57 cents after the company admitted it would no longer be profitable if iron ore prices continue to fall.
Qantas shares jumped 6.95% to A$1.385 as its underlying annual loss proving better than expected. Qantas reported A$2.84 billion loss for fiscal 2014, after a A$2.56 billion write-down on its international fleet. It posted an underlying pretax loss of A$646 million, about 17% better than expected, and CEO Alan Joyce said Qantas is through the worst--he forecast an underlying pretax profit in the first half of 2015.
Australian dollar appreciated against greenback and other major currencies on Thursday after Australian Bureau of Statistics data showed business investment rose stronger than forecast 1.1% in June quarter. Around late afternoon, the Australian dollar was quoted at 0.9368 against US dollar, 0.7100 against the euro, 97.17 against the Japanese yen, 0.5647 against the British pound, 0.8563 against Swiss franc, 1.0168 against Canadian dollar, and 7.2617 against the HK dollar. Shanghai Composite fall on IPO concern
Headline indices of the Mainland China share market closed down, because some investors' funds were frozen amid new initial public offerings in the Shanghai stock market. The benchmark Shanghai Composite declined 13.65 points, or 0.62%, to 2195.82 at the close. Turnover increased to 109.27 billion yuan from Wednesday's 104.09 billion yuan.
Six companies started to market initial public offering shares today. The Shanghai Securities News reported this week that a total of 10 IPOs will freeze about 800 billion yuan ($130 billion).
Shares of material industry slid the most in Shanghai after official data today showed growth in industrial profits slowed to 13.5% in July from 17.9% in June. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co slid 1.5% to 21.97 yuan. China Minmetals Rare Earth Co. dropped 1.5% to 24 yuan.
Wuliangye Yibin Co shars dropped 2.3% to 18.37 yuan after first-half profit slumped 31% from a year earlier.
China's industrial profit in July grew by 13.5% over a year to 482.3 billion yuan ($78.51 billion), 4.4%age point lower than that of June, but still the second-fastest growth this year so far. The aggregate industrial profit through July grew 11.2%, 0.4%age points higher than the aggregate through June, the National Bureau of Statistics (NBS) said on Thursday. In the first seven months of the year, industrial profits were 11.7% higher than the previous corresponding period.
Hang Seng falls 0.71% on profit booking
Hong Kong share market closed lower for third consecutive session, as profit-takers continued cashing in after the market hit a six-year high at the start of the week and as heightened geopolitical risk after ongoing conflicts in Ukraine and Iraq-Syria escalated. The Hang Seng Index fell 0.71% to 24741 at the close. Market turnover stood at HK$80.43 billion, up from HK$67.55 billion on Wednesday.
Mainland developer listed in Hong Kong declined. Country Garden Holdings Co. slumped 5% to HK$3.44 after the mainland homebuilder announced plans to sell shares at a discount. The company announced plan to raise HK$3.18 billion in a 15-for-1 rights issue, offering the shares at a 31% discount from the last closing price. China Vanke Co slipped 3.3% to HK$14.28. China Resources Land dropped 2.7% to HK$17.84. China Overseas Land & Investment decreased 3.1% to HK$21.80.
China Cinda slumped 7.1% to HK$3.92 after first-half profit lagged expectations. The Beijing-based company reported net income of 5.3 billion yuan. The stock also fell as stake sales by rival China Huarong Asset Management Co. focused attention on the nation's bad-debt managers, with the nation's nonperforming loans climbing for almost three years.
China Telecom Corp. surged 5.7% to HK$4.66 after the stock was raised to overweight at JPMorgan Chase & Co. JPMorgan raised its rating to overweight from neutral and increased its share-price forecast to HK$5.10 from HK$3.60.
The Census and Statistics Department said on Thursday that Hong Kong's value of total retail sales in July, provisionally estimated at HK$38.7 billion, dropped 3.1% over a year earlier. After netting out the effect of price changes over the same period, the volume of total retail sales in July decreased 4.5% over a year earlier.
Sensex, Nifty attain record closing high
Indian stock market closed higher ahead of gross domestic product (GDP) data that is widely expected to show a recovery in economic growth in the first quarter of the current fiscal year. Benchmark indices witnessed intraday volatility in late trade as traders rolled over positions the futures & options (F&O) segment from the near month August 2014 series to September 2014 series.
The Sensex garnered 77.96 points or 0.29% to settle at 26,638.11, a record closing high for the index. The CNX Nifty was up 18.30 points or 0.23% to settle at 7,954.35, a record closing high for the index.
Shares of PSU OMCs and upstream oil and gas stocks rose. Index heavyweight Reliance Industries (RIL) edged higher. Capital goods stocks gained. Most IT stocks declined. Realty stocks edged lower.
Shares of most power generation and power distribution companies dropped as the next Supreme Court hearing on coal blocks case is scheduled on 1 September 2014.
Shares of road and highway construction companies fell after government on Wednesday, 27 August 2014, took a decision to allow the Ministry of Road Transport and Highways to decide on mode of delivery and amendments in Model Concession Agreement in respect of national highways projects for expediting of implementation of road infrastructure projects in the country.
Cairn India rose on reports the company has been allowed to sell gas from its Rajasthan block at about $8.40 per unit to Gujarat based firms, including a fertilizer plant, since March 2013, much higher than its rivals.
Elsewhere in the Asia Pacific region-- South Korea's KOSPI index rose 0.04% to 2075.76. Taiwan's Taiex index fell 0.08% to 9478.37. New Zealand's NZX50 sank 0.12% to 5237.51. Singapore's Straits Times index declined 0.34% to 3330.22. Indonesia's Jakarta Composite index rose 0.37% to 5184.48. Malaysia's KLCI climbed 0.18% to 1875.68.
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