Asia Pacific share market traded stronger on Thursday, 06 October 2016, with investor risk sentiments brightened by tracking gain on Wall Street overnight after better-than-forecast US ISM non-manufacturing data.
However, gains in the regional bourses were limited as better-than-forecast US ISM non-manufacturing data increased the probability of a US Federal Reserve rate hike this year. Overnight, US ISM non-manufacturing index for the month of September was at 57.1 versus market estimates of 53, the best in a year. Traders are cautious ahead of this week's non-farm payrolls report that could reinforce expectations that the US Federal Reserve will hike interest rates by December.
Underpinning the expectations of interest rates hike, Chicago Fed President Charles Evans said he would be fine with raising US interest rates by year-end if US economic data remained firm.
Among Asian bourses
Energy, resources leads Australia market rally
Australian share market finished higher, buoyed by tracking overnight rally on the Wall Street and crude oil prices. Most of ASX sectors were in the green with energy stocks gaining the most after another jump in oil prices. At the closing bell, the benchmark S&P/ASX 200 index gained 30.10 points, or 0.55%, to 5,483, while the broader All Ordinaries index advanced 27.80 points, or 0.5%, to 5,564.8.
Shares of energy and resources players gained after another jump in oil prices. Oil prices climbed overnight after the U.S. Energy Information Administration (EIA) said crude stockpiles fell by 3 million barrels last week, the fifth unexpected weekly drawdown in U.S. oil inventories. During Asian trade, U.S. crude futures were down 0.5% at $49.58 a barrel, after rising more than 2% overnight. Brent futures also fell 0.48% to $51.61 a barrel after rising 1.8% overnight. Woodside Petroleum was up 1.8% to A$29.44 and Santos 3.6% to A$4.00. Among the miners, BHP added 1.1% to A$23.12 and Fortescue Metals 2.2% to A$4.93. Gold producer Newcrest Mining fell 1.6%, adding to Wednesday's 5.1% drop, as the price of gold remained near a three-month low.
Financial stocks were also up with big four banks leading the way. Westpac jumped 0.6% to A$30.39, while Commonwealth Bank climbed 0.8% to A$74.16, NAB lifted 0.3% to A$28.14 and ANZ rose 0.7% to A$28.52. The Bank of Queensland's annual cash profit came in at $360 million, a rise of just 1%. Its shares closed 2.7% lower at A$11.15.
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Australia posted a lower-than-expected seasonally-adjusted trade deficit of A$2.01 billion in August, according to the Australian Bureau of Statistics. The value of imports and exports in August were nearly unchanged from the previous month.
Japan Market extends rally to fourth day
The Japan share market closed up for fourth straight session, with investor sentiment brightened by tracking gains on the Wall Street overnight and as the yen continued to weaken against the dollar. But the market's topside grew heavy as a wait-and-see mood spread ahead of Friday's release of U.S. employment data. The Nikkei average rose 79.86 points, or 0.47%, to finish at 16,899.10. The Topix index closed up 6.12 points, or 0.45%, at 1,353.93. Rising issues outnumbered falling ones 1,116 to 714 on the TSE's first section, while 151 issues were unchanged. Volume turnover slightly fell to 1,702 million shares, from Wednesday's 1,720 million shares.
Export-oriented names, including automaker Mazda, industrial robot manufacturer Fanuc and electronics parts producer Alps, were buoyant.
Financial stocks, particularly insurers, were also buoyant, as higher yields help their margins. Dai-chi Life Holdings Inc. rose 2.6% to 1,453 yen. T&D Holdings Inc. added 2% to 1187 yen.
Energy stocks also rose on higher crude-oil prices. Oil explorer Inpex Corp. gained 3.4% to 950 yen.
Among other individual stock movers, Fujitsu jumped 5.7% to 568.7 yen after the company said it was in talks to sell its personal-computer arm to industry leader Lenovo Group.
Hong Kong Stocks rise to one-month high
The Hong Kong stock market advanced to a one-month high, helped by a firmer Wall Street overnight. But, gains were limited ahead of this week's nonfarm payrolls report that could reinforce expectations that the U.S. Federal Reserve will hike interest rates by December. The Hang Seng Index closed up 0.69% or 164.19 points to 23,952.50, the highest closing level since September 9, while the Hang Seng China Enterprises Index rose 1.39% or 135.92 points to 9,947.10. Turnover increased to HK$64.6 billion from HK$52.3 billion on Wednesday.
Energy stocks continued their swing upwards, following gains on Wednesday amid surging oil prices. Last week OPEC member countries agreed to cut oil production for the first time in eight years. Oil prices also moved upward on data showing US crude oil stockpiles fell for the fifth week in a row. Sinopec (00386) and CNOOC (00883) gained 2% and 4% to HK$5.95 and HK$10.54.
Coal stocks were also on the rise on speculation activities after Macquarie Research upgraded its target prices for the major players. The research house's top pick China Coal (01898) gained 3% to HK$4.4. China Shenhua (01088) rose 3.3% to HK$15.84. Yanzhou Coal (01171) climbed 3% to HK$5.84.
Banking stocks also saw some upward movement, following the slight improvement registered in the Nikkei Hong Kong Purchasing Managers Index (PMI) to 49.3 in September, up from 49.0 in August. HSBC Holdings rose 0.59% and Hang Seng Bank advanced 1.22%.
Galaxy Entertainment (00027) jumped 4% to HK$31.75 after Goldman Sachs raised its target price for the casino operator to HK$32.9. Sands China (01928) put on 2% to HK$35.5.
Shipping stocks jumped after reports that China Ocean Shipping (Group) and China Shipping Group plan to merge 11 shipbuilding yards into a single entity. China Shipping Container Lines (02866) surged 6.6% to HK$1.76. China COSCO (01919) shot up 5% to HK$2.82.
Indian Market drops for second day in a row
Indian stock market dropped for the second day in a row, led by losses in index heavyweights ITC and Infosys, on caution ahead of this week's non-farm payrolls report that could reinforce expectations that the US Federal Reserve will hike interest rates by December. The S&P BSE Sensex fell 114.77 points or 0.41% to settle at 28,106.21. The Nifty 50 index shed 34.40 points or 0.39% to settle at 8,709.55.
Shares of oil production and exploration firms rose as global crude oil prices gained in the previous session. Cairn India (up 2.83%) and Reliance Industries (RIL) (up 2%) gained. Higher crude oil prices would result in increase in realizations from crude sales for oil exploration firms. ONGC rose 0.73% after the Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, yesterday, 5 October 2016 gave its approval to an acquisition by ONGC Videsh (OVL) for 11% stake in JSC Vankorneft from Rosneft Oil Company (Rosneft), the National Oil Company (NOC) of Russian Federation (Russia). Rosneft operates Vankor fields, with Vankorneft, its wholly owned subsidiary. OVL will be paying an amount of $930 million for acquiring 11% stake in Vankorneft. OVL is an investment arm of ONGC.
RBL Bank rose 2.96% to Rs 304.30 on reports a foreign brokerage has initiated coverage on the stock with a buy rating with a target price of Rs 350. The brokerage reportedly said that RBL Bank is ready for a take-off in growth. The brokerage expects more than 35% compound annual growth rate (CAGR) loan growth for the bank in next 3 years.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 fell 1% to 7197.29. Indonesia's Jakarta Composite index sank 0.2% to 5409.34. Taiwan's Taiex rose 0.1% to 9284.31. South Korea's KOSPI index grew 0.6% to 2065.30. Malaysia's KLCI was up 0.2% at 1666.73. Singapore's Straits Times index added 0.1% to 2885.22. Markets in mainland China were closed for a weeklong holiday.
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