Asia Pacific share market closed higher on Thursday, 04 December 2014, as risk sentiments propelled up on tracking record high finish of Wall Street overnight. Meanwhile, upward momentum accelerated on expectations of further economic stimulus measures in China and speculation that ECB policy makers are moving closer to buying government debt to combat deflation.
Regional equities commenced trading with firm footing, on tracking positive lead from Wall Street overnight. The S&P 500 index ended at records on Wednesday trade after positive data from the US services sector as well as Fed's Beige Book economic report. The report noted that US economic activity expanded in all 12 districts with positive job growth and improvements in business expenditure. The Institute for Supply Management's non-manufacturing index rose to 59.3, the second-highest level since August 2005, from 57.1 in October.
Meanwhile, sentiments bolstered on renewed speculation that the People's Bank of China (PBoC) may unveil another round of stimulus, which could include a cut in the reserve requirements for banks, after official data, released earlier this week, showed that factory activity data hit an eight-month low. China is on course to post its slowest growth in nearly a quarter of a century and the country's central bank looks increasingly ready to act once again. On November 21, the PBOC said it would cut one-year benchmark lending rates by 40 basis points to 5.6% and also lowered one-year benchmark deposit rates by 25 basis points.
Speculation of further action from China central bank also fuelled after the PBOC failed to drain liquidity using its repurchase operation this week. This mechanism is used to reduce funds from the banking system via bond repurchase agreements and its absence indicates there is going to be broad-based easing of reserve ratio requirements.
ECB rate decision is schedule later today. Recent comments from President Mario Draghi and other members suggested that the central bank is getting ready to extend asset purchases to include government bonds.
Among Asian bourses
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Nikkei hits new post-financial-crisis high
Headline equities of the Japanese market took another ride on the upside, with the benchmark Nikkei Stock Average rising 166.78 points, or 0.94%, to 17887.21, a new post-financial-crisis high. The risk appetite buying was propelled by tracking positive cues from Wall Street overnight and yen weakening against the greenback. Meanwhile, momentum was also underpinned on strengthening expectations that the government will continue carrying out its economic reform programs after local media polls suggested Prime Minister Shinzo Abe's ruling party would score a sound victory in upcoming elections.
Export-related shares were mostly higher as the yen softening to upper 119-level against the greenback, the weakest since August 2007, elevating the overseas earnings prospect when repatriating them home. As of the end of trading, the dollar was at Y119.91 from Y119.80 late Wednesday in New York. The greenback briefly rose to Y119.95, its highest since July 26, 2007. Casio Computer Co jumped 4.6%, Tokyo Electron rallied 3.1%, Fanuc Corp rose 2.2%, and Honda Motor Co added 2% despite announcing it was expanding a recall related to faulty air bags.
Airlines got another lift from weaker oil prices, with Japan Airlines Co up 3.1% and Skymark Airlines Inc up 0.9%, while Softbank Corp underperformed, falling 0.1% as reports said it was set to pay $250 million for an investment in a Singapore taxi-booking-app maker.
Aussie stocks rises on positive offshore lead
Australian share market closed higher for third consecutive day, as risk sentiments boosted up after data showed renewed momentum in the U.S. economic recovery. The benchmark S&P/ASX 200 index advanced 47 points, or 0.88%, to 5368.80 and the broader All Ordinaries index rose 44.20 points, or 0.83%, to 5345.40. Almost all ASX sectorial indices advanced, exception being utilities and consumer discretionary, with shares of bullion, material, industrial, property trusts, financial and consumer staples companies being major gainers.
Shares of big four banks were all stronger. Commonwealth Bank of Australia rose 0.8% to A$82.08, while Westpac Banking Corp added 1.7% to A$33.40. ANZ Banking Group gained 1.4% to A$32.22 and National Australia Bank added 1.2% to A$32.81.
The major miners also closed higher. BHP Billiton rose 1.5% to A$30.89, Rio Tinto surged 2.1% to A$59.18 and Fortescue Metals rose 2.2% to A$2.77. Gold miner Newcrest climbed up 5.3% to A$10.53 after Comex gold's return above the $1200-an-ounce level overnight.
Santos shares plunged 3.9% to A$8.73 after the producer was forced to postpone a 500 million euro (A$733 million) hybrid debt raising in Europe and said it is cutting capital expenditure amid the tumbling oil price.
On the macro front, Australia's trade deficit (balance on goods and services) stood seasonally adjusted at A$1.3 billion in October 2014, a decrease of A$912 million (41%) on the deficit of A$2.2 billion in September 2014, according to Australian Bureau of Statistics. In seasonally adjusted terms, export (goods and services credits) rose A$409 million (2%) to A$26.90 billion, while import (goods and services debits) fell A$503 million (2%) to A$28.227 billion.
Separately, Australian Bureau of Statistics has released retail trade data on Thursday, showing that Australian retail sales grew by more than expected seasonally adjusted 0.4% in October 2014.
Shanghai Composite hits 42-month highs
Mainland China share market advanced to highest level since mid-2011, as optimism for cyclical stocks remain intact after central bank efforts to bolster China's economic growth. The benchmark Shanghai Composite Index surged 119.93 points, or 4.31%, to 2899.46 at the close, the highest close since May 3, 2011, when it finished at 2932.19. Full-day turnover remain strong, with 509.22 billion shares changed hand worth of 532.68 billion yuan.
The China's benchmark index has gained 19% over the past month, amid speculation the People's Bank of China will cut lenders' reserve-requirement ratios. The central bank reduced interest rates for the first time in two years last month to support economic growth amid data showing manufacturing growth trailing estimates and slowing export growth.
Shares of financial companies advanced the most in SSE sectoral peers, led by brokerage houses. Almost all of the 19 listed brokerages soared over 9% on expectations that more investors will pile into the market, with 14 brokerages hitting their 10% daily limit. Bank Of China was up 3.2% to 3.52 yuan; Minsheng Bank added 9.37% to 8.99 yuan and Everbright Bank rose 6% to 4.24 yuan.
Oil shares also performed strongly, with China's biggest energy firms PetroChina hitting its 10% daily limit, as crude oil prices rebounded. China Shenhua added 8.2% today on higher coal prices.
Hang Seng bounces 1.72% on positive lead
Hong Kong share market closed higher, propelled by tracking record high finish of Wall Street overnight and surge in Mainland China market to highest level since mid-2011 today. The Hang Seng Index ended higher 403.94 points, or 1.72%, to 23832.56, off an intra-day high of 23844.24 and low of 23456.71. Turnover surged to HK$117.48 billion, down from HK$123.2 billion on Wednesday.
As for the Shanghai-HK stock connect flow, the northbound quota balance was RMB9.479 billion, while the southbound quota balance was RMB10.085 billion, accounting for 72% and 96% of the daily allowed quotas respectively.
Shares of energy companies advanced on tracking rebound in crude oil prices. The gain was also supported by China's State Council's energy strategic action notice, which stresses four power-saving strategies, and proposes the ramp up of offshore exploration. Sinopec (00836) surged 7.6% to HK$6.52. PetroChina (00857) jumped 7.1% to HK$8.5. CNOOC (00883) shot up 4.8% to HK$10.98. Kunlun Energy (00135) bounced 4.2% to HK$8.04.
Shares of casino companies continued its weakness after a senior official from the NPC standing committee said the dominance of gaming industry does not serve the best interest of Macau. Galaxy Ent (00027) dipped 3.4% to HK$47.15. It was the worst blue-chip loser. Sands China (01928) fell 3% to HK$40.7. Wynn Macau (01128) edged down 0.7% to HK$22.85.
Indian indices clock modest gains
Indian stock market snapped a three-day losing streak led by index heavyweight ITC on reports that the government is likely to put on hold its earlier Health Ministry proposal to ban the sale of loose cigarettes. The 30-share Sensex provisionally ended up 112 points at 28,555 and the 50-share Nifty closed 24 points higher at 8,561.
Index heavyweight and cigarette major ITC jumped 5.51% to Rs 383. The stock hit high of Rs 383.60 and low of Rs 373. As per reports, the government has indicated that it is in favour of wider consultations before bringing any amendments to the existing laws to restrict the sale of loose cigarettes. As per reports, objections by some MPs, including some Union ministers, and farmers associations may put the health ministry's proposal to ban sale of loose cigarettes on hold. It may be recalled that the health ministry had last month accepted a panel's proposal to ban loose cigarettes to deter smoking.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index added 0.54% to 9225.11. South Korea KOSPI was up 0.85% to 1986.61. New Zealand's NZX50 rose 0.4% to 5523. Singapore's Straits Times index rose 0.04% at 3304.82. Indonesia's Jakarta Composite index added 0.22% to 5177.16. Malaysia's KLCI slipped 0.71% to 1745.69.
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