Asia Pacific share market mostly declined on first trading day of the week, Monday, 08 June 2015, as investors became more risk sensitive after stronger-than-expected U.S. May jobs data increased probability of sooner-than-expected rate hike by the Federal Reserve Bank.
The U.S. non-farm payroll numbers for May came in strongly on Friday at 280,000 net new jobs. The upbeat US labour figures strengthened expectations that the Federal Reserve may bring forward an interest rate increase, a move that could hit U.S. stocks and cause a ripple in equities markets elsewhere in the world.
Risk sentiments also muted on concerns about Greece's debt reform talks as Athens and its creditors bicker over the latest demands from Brussels. European Commission President Juncker, at a Group of Seven summit in Germany, accused Greek Prime Minister Alexis Tsipras of failing to respect "minimal rules" in their negotiations and of failing to deliver a promised list of alternative reforms. Greece has until the end of the month to agree a deal that will unlock billions of euros in bailout cash it badly needs to repay its debts, and there are fears that a default could see the country tumble out of the eurozone.
Among Asian bourses
Japan stocks fall
Japanese share market closed down, on tracking a modest decline in US stocks on Friday after a solid US jobs report which sparked expectations of a U.S. interest rate increase. But the yen depreciation to new 13-year lows against the dollar and upbeat domestic growth data capped the downfall. The Nikkei Stock Average declined 3.71 points, or 0.02%, to end at 20457.19. The Topix index of all Tokyo Stock Exchange First Section issues decreased 0.3%, or 5.07 points, to close at 1661.99.
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The Cabinet Office said on Monday that the economy grew 3.9% in the January-March quarter, faster than the 2.4% initially estimated, signaling the country's growth recovery. On a quarter-on-quarter basis, the economy grew 1%, higher than the preliminary reading of 0.6%. Meanwhile, Japan's current account balance for April came in at 1.3 trillion yen, down from 2.9 trillion yen in the previous month.
Shares of export-related companies were stronger as the yen explored new 13-year lows against the dollar which was buying 125.54 yen on Monday, well above the 124.37 yen seen late Friday in Tokyo. A weak yen is positive for Japanese exporters as it makes them more competitive abroad and inflates profits when repatriated. Among blue-chip exporters- Japan Display Inc. rose 2.6% to 537 yen and Kyocera Corp added 0.6% to 6715 yen. Toshiba Corp rose 0.7% to 452.80 yen on reports the company's internal accounting probe hadn't turned up any new problems.
Oil-related counters got a boost following higher energy prices last Friday, with JX Holdings rising 1.5% to 558 yen. But, airlines and power plays were stung by the firmer oil prices, with Japan Airlines fell 1.8% to 4070 yen and Tokyo Electric Power receded 2.8% to 693 yen.
China market surges to fresh seven-years high
Mainland China share market advanced to its highest in more than seven years today, on speculation that MSCI Inc. will include mainland shares in its indexes. The market shrugged off trade data, which showed China's exports slipped moderately in May but imports suffered a double-digit drop. The benchmark Shanghai Composite Index surged 108.78 points, or 2.17%, to 5131.88, its highest since January 2008, and extending last week's 8.9% rally.
The market is looking ahead to whether MSCI will include A shares in its emerging-market indexes. MSCI will announce on June 9 whether it will include so-called China 'A' shares in its Emerging Markets Index, a decision that would draw $400 billion to China stocks over time.
Data from the General Administration of Customs showed on Monday that China's exports went down 2.5% in May 2015, an improvement from the 6.4% fall in April, but the decline was the third monthly drop in a row. Imports slid 17.6% in May after a 16.2% drop in April. As a result, China's trade surplus widened to $59.49 billion in May from $34.1 billion in April. Exports for January to May rose 0.7% from a year earlier, while imports were down 17.3% in the same period. The trade surplus stood at $217.26 billion for the first five months of the year.
Financial stocks were strong, with Bank of Communications shares jumping by 10% daily limit, on bet that the state lender will have reforms letting private investors play a more active role in management.
Transportation stocks also jumped, with CRRC Corp, formed by merging rail companies CSR Corp. and China CNR Corp., gaining 10% on its first day of trading.
HSI closes 0.21% up
The Hong Kong stock market finished the session higher in volatile trade on Monday, 08 June 2015, on tracking surge in Mainland A-share market. The benchmark index opened 112 points lower but reversed its trend after weak Chinese trade data for May suggested higher odds for more government stimulus. It rose more than 100 points but pared its gains by market close. The Hang Seng Index added 56.12 points or 0.21% to finish at 27316.28, off an intra-day high of 27428.59 and day low of 27060.24. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, gained 199.37 points, or 1.43%, to 14113.98 points. Turnover reduced slightly to HK$151.1 billion from HK$158.5 billion on Friday.
Renewed talks of mixed-ownership reform theme pushed some Chinese banks upward. Bank of Communications Co (03328) soared 8% to HK$8.42 on reports that the bank is in talks with Tencent and Fosun International for potential stake sales amid a state-backed "mixed ownership" reform to allow greater private capital into the bank. Rival Bank of China (03988) also jumped 3.7% to HK$5.35 after reports said the bank may be the next in the trial of the "mixed ownership" reform after BoCom.
Brokers were mostly down after China's top securities regulator said Friday that it's been revising the rules for margin trading and short selling amid rapid gains for the stock market. Shenwan Hongyuan H.K. fell 2.1% to HK$7.16 and Haitong Securities Co lost 0.6% to HK$25.20.
Sensex ends lower for fifth day
Indian stock market ended lower for the fifth straight session, as an upbeat US jobs report raised expectations of early rate increase by the Federal Reserve. Higher US interest rates will reduce the attraction of riskier emerging-markets assets. As per provisional closing, the S&P BSE Sensex was down 284.72 points or 1.06% at 26,483.77. The 50-unit CNX Nifty was down 70.55 points or 0.87% at 8,044.15.
Global credit rating agency Moody's Investors Service reportedly said today, 8 June 2015, that below-normal rain would be credit negative for India's ratings as it would lower farm output and stoke food prices.
Foreign portfolio investors (FPIs) sold Indian shares worth a net Rs 550.29 crore during the previous trading session on Friday, 5 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 879.50 crore on Friday, 5 June 2015, as per provisional data released by the stock exchange.
Metal and mining stocks declined after China's imports tumbled at a greater pace in May, stoking concerns over a slowdown in the world's second largest economy. China is the world's largest consumer of steel, copper and aluminum. Vedanta (down 2.95%), JSW Steel (down 0.92%), Tata Steel (down 2.81%), Steel Authority of India (Sail) (down 1.25%), National Aluminium Company (down 4.26%), Hindustan Zinc (down 0.62%), Hindalco Industries (down 1.92%) and Jindal Steel & Power (down 3.09%) edged lower. Hindustan Copper (up 6.01%) and NMDC (up 0.79%) rose.
FMCG shares edged lower. Nestle India (down 8.26%), Tata Global Beverages (down 2.78%), GlaxoSmithKline Consumer Healthcare (down 4.54%), Dabur India (down 2.36%), Bajaj Corp (down 2.41%), Hindustan Unilever (down 2.15%), Colgate Palmolive (India) (down 1.51%), Jyothy Laboratories (down 1.71%), Britannia Industries (down 2.92%), Marico (down 1.48%) and Procter & Gamble Hygiene & Health Care (down 0.48%) edged lower. Godrej Consumer Products rose 1.4%.
Sun TV Network lost 21.76%. With reference to the media reports captioned "MHA denies clearance to Sun TV channels, may go off air", Sun TV Network during market hours today, 8 June 2015, clarified that no communication has been received by the company in this regard from any ministry and all the company's channels continue to be on air. The stock price fell sharply after media reports indicated that the Ministry of Home Affairs has struck down the proposal by the Information and Broadcasting Ministry for giving security clearance to company's 33 television channels. According to reports, Sun TV Network had applied to Information and Broadcasting Ministry (I&B) Ministry for renewing its broadcasting licence for 10 years, which required security clearance from the Home Ministry.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.3% to 9368.43. South Korea's KOSPI dropped 0.1% to 2065.19. New Zealand's NZX50 was up 0.3% to 5885.81. Singapore's Straits Times index fell 0.4% at 3320.33. Malaysia's KLCI dropped 0.3% to 1739.45. Indonesia's Jakarta Composite index lost 1.7% to 5015. Australia stock market closed for holiday
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