The Bank of Japan introduced a new policy framework of targeting the 10-year rate and controlling the yield curve, shifting away from its strict asset-purchase commitments. The central bank kept the interest rate on excess reserves it holds for commercial banks unchanged at minus 0.1%. While the central bank abandoned its monetary base target, the BOJ said it would maintain its program of buying long-term Japanese government bonds (JGBs) so that the balance of its holdings increases by 80 trillion yen ($781 billion) annually.
Investors' focus now shifts to the U.S. Federal Reserve policy decision later on Wednesday. Expectations of a rate increase have all but evaporated after some weak economic data but keep the door open the possibility of an increase later in the year.
Monetary authorities will continue to hog the limelight on Thursday with speeches due from the new governor of the Reserve Bank of Australia as well as the heads of the European Central Bank and the Bank of England.
Among Asian bourses
Australia Market ends higher
Australian share market putted on weight on today, helped by gains in industrials, consumer staples, energy, property trusts, financials, and realty blue-chip stocks. At close of trade, the benchmark S&P/ASX 200 index rose 36 points, or 0.68%, to 5,339.60, while the broader All Ordinaries index has gained 32.10 points, or 0.59%, to 5,429.40.
Each of Australia's "Big Four" banks was higher, led by a 1.7% rise by Australia & New Zealand Banking. National Australia Bank gained 1.3%, Westpac added 0.7% and Commonwealth Bank of Australia picked up 0.4%. Collectively, the four added about 11 points to the ASX 200.
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Materials and resources were also added strength. Among the miners, BHP Billiton and Rio Tinto rose 0.5% and 0.9%, respectively. South32 was 2.2% higher. Woodside Petroleum was little changed but Oil Search edged up 0.2% and Santos gained 1.7%.
TPG Telecom remained under pressure, falling 7%, adding to yesterday's 21% drop on disappointing earnings guidance for fiscal 2017.
Japan Stocks surge on BOJ moves
The Japan share market surged today, helped by the Bank of Japan's decision to maintain its fight against deflation. The BOJ announced its decision to introduce the new monetary easing framework, under which it will guide 10-year Japanese government bond yields so that they will remain at current levels of around zero%. Also, the BOJ refrained from pushing the interest rate on commercial banks' current account deposits at the central bank deeper into negative territory. Every industry category on the main section gained ground, led by banking, insurance and securities house issues. The 225-issue Nikkei Stock Average ended up 315.47 points, or 1.91%, from Tuesday at 16,807.62. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 35.70 points, or 2.71%, higher at 1,352.67.
Bank shares were the big winners, as investors embraced news the BoJ would not push interest rates deeper into negative territory -- a policy that has hurt commercial lenders profits. Banking giant Mitsubishi UFJ Financial Group surged 7.35% to 553.3 yen, while rival Mizuho Financial Group powered 6.83% higher to 186.1 yen. Sumitomo Mitsui Financial Group jumped 7.33% to 3,689 yen.
Government-controlled Japan Display sank 1.81% to 163 yen after a Japanese minister suggested in a media interview that Tokyo might consider divesting its stake unless the money-losing firm proves itself as more than a supplier of iPhone parts.
Steelmakers drive China market rally
Mainland China stock market closed edged higher, aided by strength in steelmakers, property, and financial stocks. The CSI300 index of the largest listed companies in Shanghai and Shenzhen added 0.28%, to 3,266.64 points, while the Shanghai Composite Index grew 0.1% to 3,025.87 points.
Steelmakers surged as investors bet on the next target of government-led restructuring after the disclosure of merger plans between Baoshan Iron and Steel and Wuhan Iron and Steel. Angang Steel jumped 4.8%, while shares of Bengang Steel Plates surged 6.4%. Maanshan Iron & Steel gained 2.8%.
China's venture capital stocks, including Kunwu Jiuding Investment Holdings and Luxin Venture Capital also surged, after China published rules to promote healthy development of the industry.
Hong Kong Market rises to 2-week high
The Hong Kong stock market ended higher amid continued buying by mainland investors. Meanwhile buying appetite spirited after the Bank of Japan announced that it has decided to change the framework of its bond-buying program and will not take interest rates further into negative territory. Most of industry category on the main section gained ground, with realty, casino operators, and energy producers being major gainers. The benchmark Hang Seng Index added 139.04 points, or 0.59%, to 23669.90 points, its highest level since Sept. 9. The Hang Seng China Enterprises Index, a benchmark measure of performance of mainland China enterprises, gained 97.62 points, or 1%, to 9849.06.
New World (00017) edged up 0.4% to HK$10.3. The developer reported 2016 earnings decline of 55% to HK$8.67 billion during lunch break. Henderson Land (00012) climbed 1.3% to HK$46.45 on Daiwa Research's target price hike.
China Overseas Land (00688) gained 2.6% to HK$27.2 becoming the top blue-chip winner after Goldman Sachs raised its target price. Its subsidiary China Overseas Property (02669) soared 8.8% to HK$1.73 as Citi Research initiated coverage on the stock, with a "buy" rating and target price of HK$2.1. China State Construction (03311) surged 9.2% to HK$10.96.
Macau gaming stocks also putted strength to the bourse. Galaxy Entertainment (00027) and Sands China (01928) gained 1.4% and 1% to HK$29.65 and HK$34.25. Macau Legend Development (01680) surged 20% to HK$1.51. Neptune Group (00070) shot up 11.6% to HK$0.385.
Indian indices settle near flat line
Indian benchmark indices ended near the flat line after holding positive zone for most part of the session. The barometer index, the S&P BSE Sensex, fell 15.78 points or 0.06% to settle at 28,507.42. The Nifty 50 index rose 1.25 points or 0.01% to settle at 8,777.15.
Rail stocks edged higher on reports the Union Cabinet today, 21 September 2016, cleared a proposal for merger of the Railway Budget with the Union Budget. Stone India (up 4.21%), Kernex Microsystems (India) (up 3.06%), Titagarh Wagons (up 2.81%), Kalindee Rail Nirman (Engineers) (up 1.33%), Texmaco Rail & Engineering (up 1.12%), Container Corporation of India (up 1.10%), NELCO (up 0.85%) and Zicom Electronic Security Systems (up 0.66%), edged higher. BEML (down 0.54%), Bharat Heavy Electricals (down 0.99%) and Hind Rectifiers (down 1.46%), edged lower. The official announcement of the merger of Railway Budget with the Union Budget hit the market after trading hours.
GAIL (India) rose 0.39% to Rs 386.90 after the company announced that it has successfully started its first UNIPOL polyethylene process line in Pata in Uttar Pradesh. UNIPOL polyethylene (PE) process line has the capacity to produce 4 lakh tons of PE per year. The total production capacity of GAIL's petrochemical plant at Pata, Uttar Pradesh is now 8.1 lakh tons per annum. GAIL's flexible high-density polyethylene (HDPE)/linear low-density polyethylene (LLDPE) swing plant provides access to a full range of resin applications which will allow GAIL and its customers to capture new market opportunities as PE market demands are changing. The new process line gives GAIL the platform to expand its PE product capabilities, providing Indian PE converters with the high quality, domestically produced resin products needed for both large-volume markets as well as advanced performance applications. The announcement was made during market hours today, 21 September 2016.
Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) today, 21 September 2016, approved viability gap funding/partial capital grant at 40% (Rs 5176 crore) of the estimated capital cost of Rs 12940 crore to GAIL (India) for development of 2,539 kilometers (KM) long Jagdishpur-Haidia and Bokaro-Dhamra Gas Pipeline (JHBDPL) project. JHBDPL project will connect Eastern part of the country with National Gas Grid. Further, the CCEA approved the simultaneous development of city gas distribution (CGD) networks in few cities like Varanasi, Patna, Ranchi, Jamshedpur, Bhubaneswar, Kolkata, Cuttack etc en-route of JHBDPL project. These distribution networks will be developed by GAIL (India) in collaboration with the concerned state governments.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 fell 0.4% to 7281.17 South Korea's KOSPI index grew 0.5% to 2035.99. Taiwan's Taiex index added 0.7% to 9228.50. Singapore's Straits Times index shed 0.1% to 2850.74. Indonesia's Jakarta Composite index rose 0.8% to 5342.59. Malaysia's KLCI rose 0.2% to 1658.73.
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