Asia Pacific share market tumbled on last trading session of the week, Friday, 13 November 2015, as risk aversion selloff in full swing amid sharp plunge in the price of commodities and growing concerns over global growth. The selloff pressure was also exacerbated by growing expectations of the very likely U.S. rate hike next month.
There were fresh worries over global growth after commodity prices tumbled to multi-year lows, triggering heavy selling in Asian markets. Crude prices hit two-and-a-half-month lows on Thursday after the U.S. government reported a stockpile build four times above market expectations. Copper also fell to its weakest level in more than six years, hurt by a strong dollar and persistent concerns over China's economy. . Brent crude oil dropped 3.4% to $44.27 per barrel; iron ore dropped 1.6% to $47.81 per tonne; and copper for delivery in three months sank as much as 2.9% to $4800 a tonne, the lowest since July 2009.The gold price followed suit, slipping 0.2% to $1082 an ounce, after tumbling 2.5% overnight.
The anticipation of the United States will raise interest rates hike next month intensified after Federal Reserve officials lined up behind a hike on Thursday. Federal Reserve Bank of New York President William Dudley on Thursday declined to comment on the timing of a rate increase, though he said it was getting closer and that future rate increases would likely come at a slow pace. Fed Vice Chairman Stanley Fischer said on Thursday a strong dollar had already delayed the Fed's interest-rate increase, but said it "may be appropriate" for the central bank to begin raising rates next month. Mr Uchida said expectations for a Fed rate increase often worsens risk sentiment, especially because of the debilitating effect of U.S. monetary tightening on emerging economies.
Among Asian bourses
Australia market ends 1.45% down
The Australian share market ended steep lower, as slump in commodity prices has triggered selloff in the mining and energy shares. The benchmark S&P/ASX 200 index ended 74.40 points, or 1.45%, down at 5051.30 points, while the broader All Ordinaries index tanked 70.40 points, or 1.36%, to 5111.80 points.
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Shares of mining and energy companies were hardest hit on the Sydney market after prices of oil, copper and gold tumbled overnight. Brent crude oil dropped 3.4% to $44.27 per barrel; iron ore dropped 1.6% to $47.81 per tonne; and copper for delivery in three months sank as much as 2.9% to $4800 a tonne, the lowest since July 2009.The gold price followed suit, slipping 0.2% to $1082 an ounce, after tumbling 2.5% overnight.
BHP Billiton, one of the world's largest resources companies, was among the hardest-hit, falling 1.8% at A$20.23, a 10-year low, as the fallout from its collapsed Brazilian tailings dam and a dispute with Australian tax authorities over coal royalties continues to plague the mining giant's woes in recent days. Fortescue Metal followed decline, falling 3% to A$2.28. Rio Tinto declined 1.7% to A$48.65. Oil explorer Woodside Petroleum declined 1.9% to A$28.45 and Origin Energy lost 7.1% to A$4.74. Oil and Gas Santos tanked 7.7% to A$3.97 after A$1.17 billion institutional rights offer. Shares of the oil and gas producer raised slumped 16.5% on Thursday.
Financial stocks also lost ground amid concerns over the profitability of the country's powerful banks. Commonwealth Bank was down 2.1% to A$75.76, Westpac 0.3% to A$30.52, and National Australia Bank 1.1% to $28.25. ANZ Bank tanked 1.2% to A$26.31 after refuting media reports that speculated the bank might not be able to pay fully franked dividends sometime in the foreseeable future.
Japan stocks falls 0.51%
The Japanese share market closed down, as investors refrained from taking lopsided positions ahead of key U.S. data later the day and Japanese GDP figures next week. The day's notable decliners comprised utilities, marine transports, mining, oil & coal, and nonferrous Metal issues, while foods, agriculture, retailer issues were among major gainers. The Nikkei Stock Average was 100.86 points, or 0.51%, to end at 19596.91 points. The broader Topix index has lost 0.49%, or 7.74 points, to 1585.83 at the close.
Export related stocks were mostly down due to appreciation in the Japanese yen against the U.S. dollar after senior Federal Reserve officials failed to provide clearer signals for a rate increase in December. Electronics firm Sony Corp. fell 2.6% to Y3,387. Industrial machinery maker Komatsu Ltd. lost 2.3% to Y1,979.0.
Financials were mostly higher, with Mitsubishi UFJ Financial Group up 1.5% after announcing plans to buy back around 100 billion yen of its own shares. Sumitomo Mitsui Financial Group (SMFG) erased earlier losses to end flat, following news that it is looking to buy General Electric's Japan-based leasing business.
Electronics maker Toshiba Corp. fell 5.9% to Y295.2 after the company admitted Thursday that its nuclear-business affiliate, Westinghouse, booked a combined $1.3 billion impairment loss during fiscal years 2012 and 2013.
China stocks fall after poor new loan data
The Mainland China stock market declined after reports that banks in China lent less than expected in October amid sluggish corporate demand and banks' concerns over credit quality. Risk sentiments also dented on caution ahead of an IMF decision on whether to include the Chinese currency in the Special Drawing Rights (SDR) basket. The Shanghai Composite Index dropped 1.43%, or 52.06 points, to close at 3580.84 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 2.39%, or 53.92 points, to close at 2205.56. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, was down 2.63%, or 73.14 points, to close at 2710.16.
The People's Bank of China said in a statement on Thursday that new yuan loans totaled 513.6 billion yuan (US$81 billion) last month, about half September's figure although they were 48 billion yuan more than the same month of last year. Growth of M2, the broad measure of money supply, accelerated to 13.5% from September's 13.1%. China's total social financing the broadest measure of credit supply that includes loans, bank acceptance bills, corporate bonds and equity financing dropped to 476.7 billion yuan in October from 1.3 trillion yuan in September, according to the central bank.
The International Monetary Fund is expected to make its decision on whether to include the yuan in the SDR basket of elite currencies this month. On Aug 4 the IMF said the currency fell short of meeting all the standards for inclusion, particularly on being "freely usable" in international finance. But China's economic slowdown has complicated Beijing's efforts to widen its use and movements in its valuation, especially because the IMF reviews the SDR basket only every five years, and the deadline for the current review is the end of the year. In a move seen as trying to accommodate China's push for inclusion, on Aug 19 the Fund announced that it had extended by nine months the implementation of the revision, giving more time for adjustment to the potential inclusion of the yuan. So that if a decision to include the yuan is made this month, that actual inclusion could take place as late as September 30, 2016, giving Beijing more time to prepare.
Shares of materials and energy companies dropped after commodities plunged amid concern the nation's slowdown will crimp demand globally. State-owned Baoshan Iron & Steel Co and China Northern Rare Earth were the biggest losers, down over 5% each. PetroChina and Sinopec tanked 1.9% and 2.1% respectively. Zinc producer Shenzhen Zhongjin Lingnan Nonfemet Co. slumped 6.6%
Hong Kong market dips 2.15%
Hong Kong stock market ended sharply down, as profit booking triggered on following drop in the Wall Street overnight and decline in Mainland A-share market today. The benchmark Hang Seng Index surrendered 482.78 points, or 2.15%, to 22396.14 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, has lost 227.46 points, or 2.2%, to 10181.47 points. Turnover increased to HK$82.7 billion from HK$79.3 billion on Thursday. MSCI removed 13 small caps from its Hong Kong small cap index, and newly added 14, effective 30 November. The new inclusions, such as Digital Doman (00547) and Evergrande Health (00708) surged 10.3% and 5.3% to HK$0.375 and HK$1.8.
Property counters retreated after Barclays Research said in a research report that some HK developers have started to offer primary mortgages with a loan-to-value ratio (LTV) of between 80% and 90%. It sees little risks at the moment. Sino Land (00083) slipped 4.2% to HK$11.4. SHKP (00016) fell 2.2% to HK$98.95. K Wah (00173) declined 3.1% to HK$3.15.
Lenovo (00992) bucked the downtrend, soaring 7.5% to HK$8.28 after a slew of investment houses issued bullish comments on the company.
Chinese Estate (00127) has agreed to sell MassMutual Tower to Evergrande (03333) and would record a gain of HK$1.53 billion. Chinese Estate jumped 10% to HK$20.65. But Evergrande dipped 4% to HK$6.27.
Sensex tanks 256 points
Indian stock market tanked as investors offloaded their positions on disappointing macro data and weak trend in global markets. The benchmark BSE Sensex and NSE Nifty declined 256.42 points and 62.75 points at 25,610.53 and 7,762.25, respectively.
The biggest spoiler for the domestic market, however, was macroeconomic data, which showed that Indian economy is still not out of the woods. Industrial production slackened to a four-month low of 3.6% while retail inflation inched up to 5%, government data showed yesterday.
Indiabulls Housing Finance fell as much as 17.5% after the company agreed to buy a 40% stake in UK-based OakNorth Bank for $100 million, raising concerns over capital allocation.
Shares of CESC jumped as much as 8.33% after the company reported 1.56% rise in its net profit at Rs 195 crore for the quarter ended September 30, 2015 as compared to Rs 192 crore for the same quarter in the previous year.
InterGlobe Aviation shares closed 10.79% up at Rs 1,023 apiece. The share price of the company opened at Rs 921 and had touched a high and low of Rs 1,032.70 and Rs 918, respectively, in trade.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index dropped 1.2% to 8329.5. South Korea's KOPSI shed 1% to 1979.29. Malaysia's KLCI lost 0.3% to 1658.91. Singapore's Straits Times index declined 1.1% at 2925.68 Indonesia's Jakarta Composite index gained 0.2% to 4472.84. New Zealand's NZX50 slipped 0.6% to 5989.
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