Investors were waiting for U.S. Federal Reserve chair Janet Yellen's congressional testimony later in the day for hints on when the central bank may start raising interest rates.
Recent polls have shown that more British people are shifting toward remaining in the European Union before Thursday's referendum following the fatal shooting of British Parliamentarian Jo Cox, an advocate of Britain remaining in the 28-nation bloc.
The Organization for Economic Cooperation and Development (OECD) has warned that Britain's leaving the EU -- the so-called Brexit -- could send shocks through global financial markets. The OECD said on 1 June 2016 that a United Kingdom vote to leave the EU would trigger negative economic effects on the UK, other European countries and the rest of the world. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets, the OECD said. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union, the OECD said.
Among Asian bourses
Australia Market extends gain
Australian share market advanced for second day in row, as investors grew increasingly optimistic the United Kingdom will vote to stay in the European Union. At close of trade, the benchmark S&P/ASX 200 index added 17.60 points, or 0.33%, to 5274.40. The broader All Ordinaries climbed up 17.70 points, or 0.33%, to 5353.30. Rising stocks outnumbered declining ones on the Australia Stock Exchange by 511 to 486 and 374 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was down 0.98% to 19.865.
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Shares of materials and resources companies declined in line with weaker commodities prices. BHP Billiton slipped 1% to A$18.69 and Rio Tinto lost 1.3% to A$44.21. Iron ore miner Fortescue Metals Group dropped 3% to A$3.26. Energy stocks lost ground after the oil price fell. Woodside Petroleum declined 3.5% to A$26.50, Santos 3.2% to A$4.85, and Origin 1.2% to A$5.78.
Shares of banks and financial companies traded stronger. ANZ Banking Group inclined 1.6% to A$24.25, Commonwealth Bank 1.2% to A$75.08, and Westpac Banking Corp 0.7% to A$29.68, while National Australia Bank shed 0.3% to A$25.67.
Shares of healthcare companies were in positive territory. Blood plasma products company CSL rose 0.7% to A$108.89, while Sonic Health added 2.2% to A$21.26 and ResMed rose 2.6% to A$8.16.
The minutes of June RBA meeting, when cash rate was held at 1.75%, were released. RBA noted that "an appreciation of the exchange rate could complicate the adjustment of the economy to the lower terms of trade." Meanwhile, "short-term measures of inflation expectations - from consumers, market economists, union officials and inflation swaps - had remained below average. Long-term inflation expectations had also remained below average." And, "following the reduction in the cash rate in May, the board judged that leaving the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and inflation returning to target over time." Also from Australia, house price index dropped -0.2% qoq in Q1 versus expectation of 0.8% qoq rise.
Nikkei jumps 0.51%
The Japan share market advanced for third straight session on Tuesday, 21 June 2016, thanks to a pause in the yen's appreciation against greenback amid bets the U.K. will opt to stay in the European Union in Thursday's vote. But gains were limited ahead of testimony from Federal Reserve Chair Janet Yellen and the outcome of the June 23 referendum on Britain's European Union membership. The 225-issue Nikkei Stock Average gained 203.81 points, or 1.28%, to 16,169.11. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 14.71 points, or 1.15%, to 1,293.90.
Daiichi Sankyo Co. surged 7.9% after a pharmaceutical company announced it will buy back as many as 28 million shares.
Japan Steel Works slumped 5.3% after Morgan Stanley MUFG Securities Co. cut its rating on the stock.
The finance ministry said on Monday that Japan fell into a trade deficit in May, the first since January, as export declines accelerated while imports dropped. Japan logged a deficit of 40.72 billion yen ($389 million), compared with a trade surplus of 823.18 billion yen in April, as exports of steel and semiconductors declined, the ministry said. However, it was smaller than the deficit of 215.35 billion yen seen in May 2015. For the latest month, exports fell 11.3%, marking the eighth straight monthly decline. The value of steel shipments dropped 24.1%, while electronic parts such as semiconductors shrank 20%. Imports, meanwhile, also fell 13.8%, largely due to sharp declines in energy prices, such as crude oil and liquefied natural gas.
China Stocks fall 0.35%
Mainland China stock market closed down, despite global rally, with technology, materials, and consumer goods stocks being major losers. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.2%, to 3106.32, while the Shanghai Composite Index dropped 0.35%, to 2878.56 points.
Shares materials and resources companies dropped on tracking pullback in base metal prices. Jiangxi Copper dropped 1.1%, while Yunnan Copper Co. slid 1.4%.
Shanghai Jinqiao Export Processing Zone Development Co. surged 10% before its shares were suspended, on reports its base was the front-runner to become Tesla Motors Inc.'s Chinese production site. The company said in a statement on Tuesday it didn't sign an agreement with the U.S. car maker.
China's foreign exchanged regulator said on Monday that pressure on the country's cross-border capital outflows had gradually eased, after data showed commercial banks' foreign exchange sales dropped in May. Chinese banks sold a net $12.5 billion worth of foreign exchange in May, versus net sales of $23.7 billion in April, data from the State Administration of Foreign Exchange showed.
Hong Kong Market surges 1.7%
The Hong Kong stock market finished higher, amid growing optimism that the United Kingdom will vote to stay in the European Union later this week. The benchmark Hang Seng Index grew 158.24 points, or 0.77%, to 20668.44 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, jumped 64.89 points, or 0.75%, to 8704.40. Turnover decreased to HK$53.9 billion from HK$55 billion on Monday.
The PBoC said in its Weibo that the central bank is studying to help commercial banks to participate offshore forex market. This aims at higher level of two-way openness of forex market. Chinese banks were generally higher. CITIC Bank (00998) put on 2.4% to HK$4.65. ICBC (01398) added 2% to HK$4.29. ABC (01288) gained 2.1% to HK$2.93. CCB (00939) rose 0.8% to HK$5.2 despite Singapore's state-owned investment firm Temasek Holdings has recently reduced its stake in the lender.
China Telecom (00728) said its May net mobile user adds increased 1.34 million, while 4G users net adds grew 5.03 million. The stock advanced 2.4% to HK$3.46. China Mobile (00941) shot up 1.4% to HK$86.55. China Unicom (00762) edged up 0.7% to HK$8.17.
Oil prices have risen for two days in a row. CNOOC (00883) and Sinopec (00386) put on 2% to HK$9.59 and HK$5.43.
Tencent (00700) was up 1.3% at late trade to HK$172.9 on talks that it has reached agreement to acquire mobile game developer Supercell.
Hong Kong's overall consumer prices rose 2.6% in May over the same month a year earlier, slightly smaller than the corresponding increase of 2.7% in April, according to the Census and Statistics Department. Netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite CPI (i.e. the underlying inflation rate) in May was 2.2%, also slightly smaller than April's 2.3% rise, mainly due to the smaller increases in the prices of fresh vegetables.
Indian indices snap two-day winning streak
The two key benchmark indices snapped a two-day winning streak in what was a lacklustre trading session. The barometer index, the S&P BSE Sensex, fell 54.14 points or 0.2% to settle at 26,812.78. The Nifty 50 index fell 18.60 points or 0.23% to settle at 8,219.90.
Bank of India shed 0.57%. Bank of India today, 21 June 2016, announced said the bank has decided to sell its 18% stake in Star Union Dai-ichi Life Insurance Company (SUD) to Dai-ichi Life Insurance Company Limited (DILIC). After the completion of the transaction, the shareholding of Bank of India in SUD will be reduced to 30% from 48% and the shareholding of DILIC will rise to 44% from 26%. Union Bank of India will continue to hold 26% stake in the life insurance joint venture. The announcement was made during market hours today, 21 June 2016.
Meanwhile, the finance ministry in its quarterly revision on interest rates on small savings schemes has kept the rates unchanged for Q2 September 2016. The government now announces revision in interest rates on small saving schemes on quarterly basis as against the earlier practice of annual revision. The decision to shift to quarterly revision from annual revision was taken to ensure that interest rates under small savings schemes are more dynamically related to the prevailing market rates. It may be recalled that the finance ministry had in March 2016 announced reduction in interest rates on small savings schemes for Q1 June 2016 in a move to bring the rates in line with the prevailing money market rates.
Tata Power lost 2.33%. The company announced during trading hours today, 21 June 2016, that its 100% subsidiary, Tata Power Renewable Energy (TPREL) has won solar grid connected photovoltaic project of 30 megawatts (MW) in Maharashtra. The project has been awarded in the DCR category under the Jawaharlal Nehru National Solar Mission (JNNSM). TPREL has received the Letter of Intent to develop the project and will sign a 25-year power purchase agreement (PPA) with NTPC Vidyut Vyapar Nigam. The JNNSM, launched in January 2010, is a major initiative of the Government of India that aims to establish India as a global leader in solar energy by creating favourable policy conditions for its diffusion across the country.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 fell 0.4% to 6839.40. South Korea's KOSPI index rose 0.1% to 1982.70. Taiwan's Taiex index grew 0.7% to 8684.85. Malaysia's KLCI added 0.2% to 1637.39. Indonesia's Jakarta Composite index rose 0.3% to 4878.71. Singapore's Straits Times index fell 0.4% to 2789.45.
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