Asia Pacific share market ended mostly lower on Thursday, 06 August 2015, as jitters about China's economy and fear of US rate hike in September triggered risk aversion selloff. The MSCI Asia Pacific Index slid 0.2% to 140.76.
The stronger than expected US service-sector data and comments from a Fed policymaker boosted optimism about the United State economy and increasing expectations of a U.S. rate hike in September.
The U.S. Institute for Supply Management's services sector index rose to 60.3, its highest level since August 2005, far beyond expectations for a 56.2 reading. The data backed views the Federal Reserve will raise rates in September, more than offsetting weaker-than-expected U.S. private hiring figures for July also released on Wednesday.
Federal Reserve Governor Jerome Powell yesterday, 5 August 2015, said that he was undecided about whether to support a rate hike when policy makers next meet in mid-September. Powell's remarks came after two Fed regional bank presidents have come out in favour of a September hike earlier this week.
The influential monthly US nonfarm payroll report for July 2015 is due tomorrow, 7 August 2015. The report will be scrutinized for clues to the strength of the labour-market recovery. Investors have been parsing economic data, from inflation to wages, for clues about when the Federal Reserve might raise rates.
Investors are worried that weaning off decade-long zero interest rates on the dollar could prove tough for some emerging economies and companies that have taken cheap dollar funding for granted. The Brazilian real hit a 12-year low and the South African rand hit a 14-year low on Wednesday. In Asia, the Indonesian rupiah and the Malaysian ringgit flirted with the lowest levels since the Asian economic crisis in the late 1990s.
Among Asian bourses
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Australia stocks fall to one-week low
The Australian share market declined to one-week low lower, as ANZ's capital raising announcement revived fresh concerns about the banks' new and looming regulatory requirements. Nine out of ten ASX sectors ended in the red, with financial, energy, industrial, healthcare and consumer staple sectors leading declines, although materials sector was uptick for the second session in a row due to commodities gains. The benchmark S&P/ASX 200 Index dropped 63.90 points, or 1.13%, to 5610.10 points, while the broader All Ordinaries Index declined by 1.05%, or 59.40 points, to 5600.10 points. Investors are keeping eye on the Reserve Bank of Australia releases its statement on monetary policy tomorrow.
Financials sector was top loser in the ASX sector group, on anticipated on capital rising by lenders after Australia and New Zealand announced was raising A$3 billion by selling shares at a 5% discount to comply with new rules forcing lenders to have more cash relative to their mortgage books. Its shares were in a trading halt. Among other lenders stocks, Commonwealth Bank dropped 3.2% to A$84.55, National Australia Bank 2.2% to A$33.59, and Westpac Bank 3% to A$33.44.
The improving dynamics around iron ore have continued uplift sentiment towards the material companies, with BHP Billiton gaining 0.8% to A$26.69, while Fortescue Metals Group gained 1.3% to A$1.91, following Wednesday's 6.2% rise, after the iron ore price rose. Reports the iron ore miner is open to talks with potential investors has boosted its shares Rio Tinto jumped 1.1% to A$53.55 ahead of its HY profit results tonight.
Outdoor clothing retailer Kathmandu rose 8.9% to A$1.65 as it rejected a takeover offer from home goods retailer Briscoe as too low. Briscoe rose 1.4%.
Downer EDI (DOW) declined 11.4% to A$4.06 following the engineering group's 2.7% fall in FY15 profit to A$210.2 million. A slump in commodity prices means less work in the mining sector, which has held back earnings. DOW expects profits this year to fall by around A$20 million.
Australia's estimated seasonally adjusted unemployment rate for July 2015 was 6.3%, an increase of 0.3 percentage points (based on unrounded estimates) from a revised 6.1% for June 2015, according to latest Australia Bureau of Statistics data released on Thursday.
Japan stocks climb on weaker yen
Japanese share market enjoyed a modest gain for second consecutive session, as risk momentum boosted up by tracking gains in the Wall Street overnight amid better-than-estimated US economic data and yen depreciation against the greenback. Meanwhile, better than expected domestic earnings also bolstered sentiments. The Nikkei Stock Average advanced 50.38 points, or 0.24%, to end at 20664.44 points. The broader Topix index ended 7.73 points, or 0.46%, higher at 1673.56 points. 22 out of 33 TSE sectors advanced, with Pulp & Paper, Textiles & Apparels, Insurance, Glass & Ceramics Products, Transportation Equipment, and Nonferrous Metals sectors being top gainers.
Shares export linked companies advanced the most, thanks to yen depreciation to upper-124 level against the greenback. The yen traded at 124.74 per dollar after weakening 0.4% on Wednesday, a third day of losses. Fanuc Corp jumped 3.1% to 21895 yen and Softbank Group Corp added 1.9% to 7140 yen. However, Fast Retailing ended 2.2% down at 57220 yen, extending Wednesday's 4.7% slump sparked by a fall in July same-store sales.
Meiji Holdings Co surged 17% to 20720 yen after the dairy products maker posted stronger first-quarter earnings and boosting its profit forecast. The dairy company raised its full-year net income forecast by 20% to 50 billion yen.
Shares of NTT DoCoMo climbed 1.5% to 2712 yen on the back of news that the mobile operator will be working with Intel and Qualcomm to develop 5G mobile communications technologies.
Nippon Telegraph & Telephone Corp. rose 3.2% to 4946 yen after saying it will buy back as much as 100 billion yen ($804 million) of shares. The company posted a jump in quarterly profit and said it plans to buy back 0.99% of shares.
China market drops 0.9%
Mainland China's stock declined for second straight day in subdued trade, on rumour that the regulator will begin to unwind some of its market-supporting measures, starting with a resumption of new share sales. Nine out of 10 SSE sectors declined, with telecommunication services, consumer staple, industrial, and material sectors leading declines. The benchmark Shanghai Composite Index ended 33.03 points, or 0.89%, down at 3661.54 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.69%, or 14.77 points, to 2113.65 points. Total volume of A shares traded in Shanghai was 35.75 billion shares, while Shenzhen volume was 20.22 billion shares.
As per reports, the China Securities Regulatory Commission plans to convene a review meeting on Friday to discuss the private-placement plans of four companies.
Analysts say investors have not participated actively in the stock market in the past few weeks as the sharp volatility has dampened their interest despite continuous official policy support.
Most of the sectoral blue chip stocks declined, with telecom and health-care companies leading declines. China United Network Communications dropped 1.8%. Shanghai RAAS Blood Products Co. retreated 3.9%, while Lepu Medical Technology (Beijing) Co. fell 3%. Lionco Pharmaceutical Group slumped 7.1% and Zhejiang Huatong Pharmaceutical lost 7.1%.
Hong Kong market drops 0.57%
The Hong Kong stock market closed weaker in quiet trade, as mixed US economic data and volatility in mainland markets dragged down investors' sentiments. The Hang Seng Index ended 138.88 points, or 0.57%, higher at 24375.28 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 32.57 points, or 0.29%, to 11093.27 points. Turnover reduced slightly to HK$67.3 billion from HK$68.6 billion on Wednesday.
TRC (00066) added 1.7% to HK$35.25 after signing the RMB4.84 billion train contract with CRRC Corp (01776) for over purchase order. CRCC also gained 2.9% to HK$9.88.
IPPs fella cross the board as domestic media reported that the proposed reform may need to seek opinions again. CR Power (00836) slipped 3.8% to HK$20.25. Huadian Power (01071) plunged 5.2% to HK$7.1. Huaneng Power (00902) slid 4.8% to HK$9.22.
Li & Fung (00494) plunged 4.2% to HK$5.47 after JP Morgan cut its target price. It was the worst blue chip performer.
Sensex registers modest gains in choppy trade
Indian benchmark indices registered modest gains in volatile trade, on reports retirement fund manager Employees Provident Fund Organisation (EPFO) will reportedly start investing in the stock market through the exchange-traded funds (ETFs) route starting today, 6 August 2015. As per provisional closing, the S&P BSE Sensex was up 88.02 points or 0.31% at 28,311.10. The 50-unit CNX Nifty was up 20.70 points or 0.24% at 8,588.65.
Nestle India dropped 5.22% after Food Safety and Standards Authority of India clarified that it has not given any clean chit regarding the safety of Nestle India's Maggi Noodles. Food Safety and Standards Authority of India (FSSAI) issued the clarification yesterday, 5 August 2015. FSSAI issued the clarification in response to media reports that a Food Safety and Standards Authority of India (FSSAI) approved laboratory of Central Food Technological Research Institute (CFTRI) had found Maggi noodles in compliance with food safety standards on a testing of five samples sent by Goa Food and Drug Administration.
Foreign portfolio investors (FPIs) bought Indian shares worth a net Rs 447.90 crore yesterday, 5 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 189.11 crore yesterday, 5 August 2015, as per provisional data.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index slipped 1.1% to 8449.56. South Korea's KOSPI dropped 0.8% to 2013.29. New Zealand's NZX50 declined 0.2% to 5928.69. Singapore's Straits Times index rose 0.2% at 3196.66. Indonesia's Jakarta Composite index dropped 0.9% to 4806.56. Malaysia's KLCI sank 1.8% to 1694.64.
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