Asia Pacific share market registered strong rally on Thursday, 27 August 2015, as risk sentiments improved by sharp rebound in the Wall Street overnight after some clarity on the U.S. Federal Reserve's monetary policy. Meanwhile, rebound on the Mainland China stocks after fresh stimulus for the economy from China's central bank also amplified buying sentiments.
U.S. stocks snapped a six-day losing streak on Wednesday, climbing by the highest percentage in nearly four years on signs of strength in the U.S. economy and signals the case for a September rate increase have waned.
Traders were encouraged by comments from William Dudley, president of the New York Federal Reserve Bank, that the case for a U.S. interest rate hike in September is "less compelling to me than it was a few weeks ago," given China's troubles, falling oil prices and weakness in emerging markets.
Among Asian bourses
Australia market advances for a third straight session
The Australian share market extended winning streak for third straight day, as risk sentiments boosted by tracking rally on the Wall Street overnight and better than expected domestic business investment intentions data. All ASX sectors recorded gains, with financials, healthcare, energy, and utilities stocks being winner of the day. The benchmark S&P/ASX 200 index advanced 60.50 points, or 1.17%, to 5233.30 points. The broader All Ordinaries index closed 63.70 points, or 1.23%, higher at 5242.60.
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Energy stocks ended stronger as crude futures erased overnight loses during Asian trade as equity markets across the region recovered. Woodside Petroleum rose 1.7% to A$31.50, Oil Search gained 3.2% to A$6.39, and Origin Energy climbed 3.2% to A$8.14.
The healthcare stocks was also up strongly, helped by a 5.5% rise in Ramsay Health Care to A$63.68 after the private-hospital operator said its full-year profit rose 27%.
Financial stocks soared with all the major banks higher, led by the ANZ, up 2.49% at A$28.77. Shares of financial companies were top gainers, with top four lenders leading rally. Westpac Bank led gains among major banks, rising 4.9% to A$30.90, meanwhile National Australia Bank rose 4.6% to A$31.09, Australia & New Zealand Banking Group added 4% to A$27.99, and Commonwealth Bank jumped 3.6% to A$75.08.
Flight Centre shares flew 11.5% higher after it forecast strong earnings growth for the year ahead. The group reported a 3.4% fall in underlying profit before tax to A$363.7 million, in line with its latest earnings guidance, but pleased the market by forecasting its earnings will grow 4% to 8% this financial year.
Nikkei extends gain on U.S. rally
Japanese share market rallied for second straight day, as risk sentiments bolstered by tracking rally on the US markets overnight and yen weakness resumption against major currency baskets after hints the US Federal Reserve would not raise interest rates next month. Total of 29 out of 33 TSE industry groups advanced, with shares of foods, construction & materials, financials, banks, IT & services, real estate, and retail trade companies being biggest gainers. The Nikkei Stock Average advanced 197.61 points, or 1.08%, to end at 18574.44 points, extending yesterday 3.2% gains. The broader Topix index ended up 1.45%, or 21.44 points at 1500.41.
Shares of food and consumer staple companies rose strongly as investors chased for companies dependent on domestic demand for now over cyclical stocks like Japanese exporters that are sensitive to global growth. Consumer staple maker Kao rose 4.2%. Soy-sauce maker Kikkoman added 6.1%. Food Company Yamazaki Baking gained 5.9%. Bicycle parts maker Shimano soared 6%.
Shares of insurers were also higher. Dai-ichi Life Insurance Co. advanced 2.9% after Mitsubishi UFJ Financial Group Inc. said the insurer is likely to revise earnings higher. Other insurers also rose, with Tokio Marine Holdings Inc rising 4.3%.
Shimano rose 6% after JPMorgan & Chase Co. raised its rating on the stock to overweight from neutral, citing the current market drop was a good opportunity to pick up shares as the company is likely to increase buybacks or dividends.
China stocks rebound on rate cut
Mainland China's stock market ended solidly higher, as investors chased for bottom fishing on battered blue chip stocks after heavy selloff in recent sessions. Risk sentiments improved after the Chinese central bank's easing decisions calmed market concerns over economic slowdown. The benchmark Shanghai Composite Index rebounded 156.30 points, or 5.34%, to 3083.59, following a 20-percent loss since last Thursday. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 3.33%, or 56.45 points, to 1752.21. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, gained 3.68% to close at 1,959.49.
The China central bank on Tuesday reduced interest rates and cut the amount of money banks must hold in reserve -- its second such double move in two months -- to try to bolster its economy and end the country's worst stock market rout in almost two decades.
The China central bank lowered the benchmark rate for a one-year loan by 0.25 percentage points to 4.6% and the one-year rate for deposits by a similar margin to 1.75%. The bank also increased the amount of money available for lending by reducing the minimum reserves banks are required to hold by 0.5 percentage points. The move came as Beijing appeared to be abandoning a strategy of having a state-owned company buy shares to stem the market slide.
The central bank on Thursday pumped more money into the market to ease liquidity strain. The People's Bank of China (PBOC) conducted 150 billion yuan (US$23.4 billion) of seven-day reverse repurchase agreements (repo), a process in which central banks purchase securities from banks with an agreement to resell them in the future.
Hong Kong market closes sharply higher
Hong Kong stock market closed higher, as investors chased for bottom fishing on battered blue chip stocks on tracking gain on the Wall Street overnight after some clarity on the U.S. Federal Reserve's monetary policy emerged. Meanwhile, rebound on the Mainland China stocks also amplified buying sentiments. The Hang Seng Index (HSI) opened up 678 points and pared its gains by midday, but it rebounded sharply in afternoon session on the back of the Shanghai market. The Hang Seng Index ended higher by 758.15 points, or 3.6%, at 21838.54 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, rose 435.68 points, or 4.62%, to 9863.61 points. Turnover reduced to HK$108.9 billion from HK$134.5 billion on Tuesday. Turnover soared to HK$122.43 billion from HK$109 billion on Wednesday.
CNOOC (00883) reported its interim earnings decline of 56%, but beat market expectations. It soared 14% to HK$9.22. It was the top blue-chip winner. CR Land (01109) also surged 11% to HK$19.76. China Life (02628) gained 10% to HK$27.1. Mengniu Dairy (02319) was the only falling blue chip. It ended down 3% to HK$28.9 despite its interim earnings rose 28% to RMB1.34 billion.
China State Council proposed to speed up the infrastructure projects. Railways developers and manufacturers rose across the board. CRCC (01766) shot up 17% to HK$9.68. China Railway (00390) climbed 10% to HK$7.26. China Rail Cons (01186) jumped 12.5% to HK$10.52.
Sensex, Nifty attain highest closing level in almost a week
A rally in global markets sent Indian stocks surging. The barometer index, the S&P BSE Sensex, jumped 516.53 points or 2.01% to settle at 26,231.19. The 50-unit CNX Nifty jumped 157.10 points or 2.02% to settle at 7,948.95. Oil, metal and pharma stocks and index heavyweight HDFC led the rally for key benchmark indices.
Shares of oil exploration and production companies were in demand as crude oil prices edged higher. Index heavyweight ITC edged higher. Another Index heavyweight and housing finance lender HDFC surged on media reports that its life insurance joint venture with Standard Life plc intends to launch an initial public offer early next financial year.
Foreign portfolio investors (FPIs) pressed substantial sales of Indian stocks yesterday, 26 August 2015. FPIs sold shares worth a net Rs 2340.93 crore into the secondary equity market yesterday, 26 August 2015, as per data from National Securities Depository (NSDL). Domestic institutional investors (DIIs) bought shares worth a net Rs 1881.08 crore yesterday, 26 August 2015, as per provisional data released by the stock exchanges.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 1.4% to 7824.55. South Korea's KOPSI added 0.7% to 1908. New Zealand's NZX50 jumped 1% to 5634.94. Singapore's Straits Times index added 2.5% at 2945.43. Indonesia's Jakarta Composite index grew 4.6% to 4430.63. Malaysia's KLCI added 1.4% to 1601.70.
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