Headline indices of the Asia pacific share market ended the day in diverse terrain on Tuesday, May 14, 2013, as investors appetite for risk assets were muted amid worries that China growth outlook and caution ahead of the release of economic reports from Europe.
Regional market had begun the day with positive pace after data showed retail sales in the US expanded in April. The Commerce Department in Washington said retail sales increased 0.1% in April from March, an improvement from March's 0.5% decline. Economists had forecast that sales declined by 0.3% in April.
But most of early gains trimmed later in the session as investors assessed whether record-breaking rally in stocks overstated their valuations as compared to the recent improvement in the economy. Also worries about the pace of economic growth in the world second largest economy also weighed investors on the sideline. Goldman Sachs Group Inc., Royal Bank of Scotland Group Plc and JPMorgan Chase & Co. cut their estimates for China's growth this year to 7.8% after economic expansion unexpectedly slowed. Standard Chartered estimates a further moderation in the current period to 7.6%.
Traders mostly opted risk off mode to look for a report on euro-zone industrial production in March, as well as Germany's gauge of investor confidence -the ZEW -for May.
Traders were eyeing markets with caution amid speculation that better economic data out of the US might lead the Federal Reserve to rethink its super-easy monetary policy. There has been increasing talk that Fed would exit from stimulus earlier than markets have priced in. A WSJ article noted that Fed has mapped out a strategy for winding down the open ended QE3 program and policy makers are debating on the timing. Yet, it noted that Fed is considering reducing the $85 billion monthly purchase in careful pace to manage the highly unpredictable market expectations.
In the Asia Pacific region, the Australian market eked out small gain after swung between gains and losses in quiet trade, as investors opted to stay sideline ahead of Federal Budget in Canberra today and mixed cues from offshore market overnight. The All Ordinaries Index added 7.70 points to finish at 5202.550. The benchmark S&P/ASX200 index ended 10.70 points higher at 5,214.20.
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The Japan's stocks declined for the first time in three days on, as investors opted cashed out some gains off the table after the benchmark surged to five and half year peak on Monday on expectations that the yen would continue to weaken and benefit Japanese exporters. The Nikkei Stock Average slipped 23.79 points, or 0.2%, to end the day at 14,758.42.
New Zealand shares fell as recently listed MightyRiverPower continued to dominate trading, dropping to within 1 cent of last week's offering price. PGG Wrightson shed more than 10% after cutting its guidance. The NZX 50 Index declined 25.78 points, or 0.6%, to 4645.85. Within the index, 29 stocks fell, nine rose and 12 were unchanged. Turnover was $163 million.
The China share market ended the day sharp lower, dragging the benchmark Shanghai Composite index 1.1% lower at 2217.01, as risk adverse investors offloaded high beta stocks on economic growth outlook woes and rumor the People's Bank of China would not provide monetary stimulus to support the economy. JPMorgan reduced its second-quarter growth forecast for the Chinese economy to 7.8% from 8% and the full-year estimate to 7.6% from 7.8%, citing weak domestic demand suggested by the April data including industrial output and fixed-asset investment. The JPMorgan also said there's no indication the government's policy stance will be shifted quickly to support near-term growth.
The Hong Kong shares declined, with the benchmark Hang Seng Index down by 59.53 points, or 0.26%, to 22,930.28, on caution ahead of the release of economic reports from Europe. Among the 50 blue chips, only 19 stocks rose and 31 fell. Hengan dipped 3% to HK$85.2 after days of rally, while Esprit, holding investor day in Germany today, put on 2.9% to HK$10.66, making themselves the largest blue-chip loser and gainer.
Indian markets ended the session marginally in the green despite the April wholesale price index inflation numbers touching a 41-month low at 4.89%. The 30-share BSE index Sensex was up 30.62 points (0.16%) at 19,722.29 and the 50-share NSE index Nifty was up 14.95 points (0.25%) at 5,995.40.
Elsewhere, Indonesia's JKSE rose 0.5% and South Korea's KOSPI added 1%. Share market in Malaysia and Taiwan closed flat.
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