Asian markets opened higher on Tuesday as investor sentiment improved after better-than-forecast Citigroup's earnings and a fresh round of merger and acquisition activity in the U.S. healthcare industry. Regional shares maintained gains in the afternoon after the Bank of Japan kept its bond-buying program unchanged and on expectation about better China's second-quarter economic growth figures.
The Chinese government will report second-quarter gross domestic product on Wednesday. Recent data have offered some signs of stabilization in the world second largest economy as a raft of government stimulus measures kick in.
The Bank of Japan finished a two-day policy board meeting on Tuesday by a unanimous vote to leave the bank's policy target unchanged and held off expanding its vast stimulus program but downgraded its economic growth forecast for the current fiscal year. A slight cut in the Bank of Japan's economic growth forecast for the current fiscal year to March did not appear to have a significant impact on trading.
The Bank of Japan slightly lowered its growth forecast for the current fiscal year to March to 1% expansion, from a previous 1.1% forecast. The cut was third straight downward revision in a figure that was once as high as 1.5%. The BOJ kept its growth forecasts for the next fiscal year and for fiscal 2016 unchanged at gains of 1.5% and 1.3%, respectively.
The Bank of Japan said it will conduct money market operations so that the monetary base will increase at an annual pace of between 60-70 trillion yen. The BoJ will continue to increase its purchases of Japanese government bonds at an annual pace of about 50 trillion yen.
However, gain on the upside was limited as investors' awaited for congressional testimony by the US central bank chief for fresh clues about the state of the world's biggest economy. US Federal Reserve chair Janet Yellen will begin two days of testimony later today before congressional committees that will focus on the bank's time-frame for raising the benchmark interest rates.
Among Asian bourses
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Australia market ends flat
Australian share market closed virtually flat after recouping lost ground late afternoon. The ASX sectors ended mixed, with shares in material, realty, energy and consumer staple companies being the biggest gainers, while bullion, technology, industrials and financial stocks suffered notable losses. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each fell marginally 0.10 point to 5511.30 and 5495.70, respectively.
The minutes of Reserve Bank of Australia monthly board meeting released on Tuesday, indicating it will leave interest rates unchanged for some time, although there are ongoing concerns about non-mining growth and the high Australian dollar. The RBA said that the most prudent course to follow was likely to be a period of stability in interest rates. It left the cash rate unchanged at 2.5% after that meeting. The subtle change in language from the June minutes - when it said the current accommodative stance of policy was likely to be appropriate for some time yet.
Financial stocks were down, with top four lenders dropped the most following the interim report from the financial system inquiry. The federal government's financial system inquiry, headed by former Commonwealth Bank of Australia boss David Murray, was released before the market opened. It criticised superannuation fees and said big banks might need to lift their capital ratios and could face increased competition from smaller financial institutions.
Among lenders, Commonwealth Bank declined 0.3% to A$81.50, Westpac fell 0.2% to A$34.01 and ANZ Banking Corp sank 0.9% to A$33.23, while National Australia Bank rose 0.5% to A$34.01.
Material and resources stocks advanced after base metal prices were reasonably steady on the London Metal Exchange on Monday. Resources giant BHP Billiton rose 0.5% to A$38.03 and main rival Rio Tinto added 1.2% to A$63.10. Junior iron ore miner Fortescue Metals Group surged 1.7% to A$4.31 on bottom fishing following recent steep losses.
Whitehaven Coal (WHC) shares surged 5.1% to A$1.55 after releasing its FY14 coal results today. The coal miner announced a 22% increase in sales, record production levels and said a reduction in global supply was beginning to occur.
Shares of consumer staple industry also finished higher. Woolworths shares rose 0.03% to A$36.22, and Wesfarmers 0.1% to A$43.13, after it announced a partnership with GE Capital to offer personal loans.
Nikkei rises for second day on upbeat offshore cues, weaker yen
Japan share market advanced for second consecutive day, as the positive finishing of the offshore markets overnight and weaker yen boosted up the market risk sentiments. But, move on the upside capped on caution ahead of congressional testimony by U.S. Federal Reserve chief Janet Yellen. The benchmark Nikkei Stock Average advanced 0.64%, or 98.34 points, to 15395.16. The Topix index of all first-section issues rose 0.65%, or 8.22 points, to 1,273.68.
Shares of currency sensitive exporters advanced as the yen continued sliding against dollar. As of the close of Tokyo Stock Exchange trading, the greenback was trading at Y101.56, up from Y101.39 on Monday. A stronger dollar is positive for exporters, who can purchase more yen when they repatriate overseas profits.
Honda Motor Co climbed 1.4% to 3607 yen. Nissan Motor Co, which gets about 78% of sales of sales outside Japan, added 0.9% to 991 yen. Olympus Corp., the world's biggest endoscope maker, jumped 0.5% to 3730 yen.
Shares of Rubber Products markers went higher as Rubber for December delivery in on the Tokyo Commodity Exchange fell to a four-week low yesterday as Chinese stockpiles climbed. Bridgestone added 3.4% to 3,874 yen. Sumitomo Rubber Industries Ltd. advanced 1.6% to 1,500 yen.
Matsuya Co jumped 6.9% to 1145 yen after department-store operator reported 314 million yen net profit for March-May quarter, reversing a 39 million yen loss a year earlier, helped by an 11% growth in sales.
Shares of Ichigo Group Holdings fell 1.2% after Japan's largest publicly traded property managers first quarter revenue declined by 40.8% on-year to 6.52 billion yen.
China market rises on new loan data
Mainland China share market finished higher in volatile trade, buoyed by tracking a rise on Wall Street overnight and better than expected new yuan lending data for June. But, move on the upside capped on caution ahead of GDP data for second quarter releasing on Wednesday. The benchmark Shanghai Composite advanced 3.71 points, or 0.18%, to 2070.36. Trading turnover increased to 102.89 billion yuan from yesterday's 96.36 billion yuan.
The People's Bank of China said on Tuesday that aggregate financing was 1.97 trillion yuan ($317 billion) in June. New local-currency loans were 1.08 trillion yuan in June compared with the 860.5 billion yuan a year ago. M2, China's broadest measure of money supply, grew 14.7% from a year earlier. China's foreign-exchange reserves, the world's biggest, rose to $3.99 trillion from $3.95 trillion at the end of March.
Shares of liquor makers rose for second day in row on expectation of better first-half earnings due to a low base last year, while the start of the Shanghai and Hong Kong exchange link may boost their appeal. Kweichow Moutai, the biggest producer of baijiu liquor, advanced 2.7%. Rival Wuliangye Yibin Co. jumped 1.3%.
Shares of COFCO Tunhe gained 3.3% on reports State-owned Assets Supervision and Administration Commission chose State Development & Investment Corp. and COFCO for state capital investment trial,
Shanghai Potevio Co., a maker of communications equipment, jumped 10% on reports government will start a trial giving some state-owned companies more independence in making investment decisions and hiring top executives. The move may mark an acceleration in China's plan to overhaul its state-owned enterprises.
The People's Bank of China drained 20 billion yuan from the banking system on Tuesday via 28-day repurchase agreements. Some 55 billion yuan in funds are set to flow back into the system this week as outstanding PBOC paper matures. The People's Bank of China added 50 billion yuan last week, marking the ninth straight weekly net addition of funds.
Hong Kong stocks rise for second day, telecom leads
Hong Kong share market advanced, on the back of positive lead from Wall Street overnight and expectation of better China's second-quarter economic growth figures. Most of Hang Seng blue chips advanced, with shares of telecommunications and technology companies being the biggest gainers. The benchmark Hang Seng Index closed 113.29 points, or 0.49%, up at 23459.96. Turnover increased to HK$52 billion from yesterday's HK$47.73 billion.
Shares of telecommunication companies extended yesterday's advance in the Hong Kong on speculation their cellular tower joint venture will reduce costs. China Mobile rose 3.4% to HK$81.20, while China Unicom (Hong Kong) Ltd. gained 1.1% to HK$13. China Telecom Corp. advanced 1.7% to HK$4.12.
Technology stocks also closed higher. ZTE jumped 8.4% to HK$16.30 after maker of video-conferencing systems raised its first-half profit forecast. The communications company raised its first-half profit forecast to a range of 1 billion yuan to 1.15 billion yuan, from 800 million yuan to 1 billion yuan announced in April. Kingdee jumped 6.5% to HK$2.80 and Tencent advanced 0.8% to HK$123.80 after jointly launching applications to serve small businesses.
Auto-cell makers rose after Toyota, GE and Ford have said they plan to launch hydrogen fuel-cell car. China domestic media reported that the country is planning to promote the hydrogen fuel-cell industry, and an association is under preparation. Leoch (00842) soared 6% to HK$1.89. Scud (01399) jumped 9% to HK$1.31. FDG Evehicles (00729) gained 1.9% to HK$0.54.
Zoomlion Heavy Industry Science & Technology Co fell 3% to HK$4.46 after construction-machinery maker expected first-half profit will plunge by as much as 70% from a year earlier.
Citic Pacific (00267) shot up 3.3% to HK$14.24 after two more investors agreed to buy a stake in the restructuring conglomerate.
Sensex rises for the first time in six days
Indian stock market closed higher, snapping five-day losing streak, led by rate sensitive shares on hopes that easing inflation may give central bank the much needed comfort to cut key policy rates. The Sensex ended higher by 0.89%, or 221.67 points, to 25228.653, while the National Stock Exchange's broader barometer 50-share Nifty index climbed 0.97%, or 72.50 points, to 7526.65 points.
Bank stocks gained across the board after the latest data showed easing of retail inflation in June 2014. Among private bank stocks, HDFC Bank (up 0.96%), IndusInd Bank (up 0.55%), Kotak Mahindra Bank (up 1.86%), Axis Bank (up 2.78%), Yes Bank (up 1.65%), and ICICI Bank (up 3.34%) gained. DCB Bank rose 3.69% after net profit rose 4.65% to Rs 45 crore on 35.15% growth in total income to Rs 173 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced after market hours on Monday, 14 July 2014.
Among PSU bank stocks, Punjab National Bank (up 2.84%), Bank of Baroda (up 4.29%), Bank of India (up 3.69%) and Union Bank of India (up 3.57%) edged higher.
State Bank of India (SBI) advanced 4.35%. The state-run bank during market hours said it has revised downwards its bulk term deposit interest rates (Rs 1 crore and above) to 6.25% from 6.5% for deposits between 7 days to 60 days with effect from 18 July 2014. SBI also revised downwards its bulk term deposit interest rates to 6.75% from 7% for deposits between 61 days to less than 1 year. SBI also revised downwards its retail term deposit interest rates (below Rs 1 crore) to 7% from 7.5% for deposits between 7 days to 179 days with effect from 18 July 2014.
Reliance Power rose 2.74% after the company said that boiler light up has been achieved for the fifth 660 megawatts (MW) unit at the 3,960 MW Sasan ultra mega power project (UMPP). The sixth and last unit at the project is in advanced stages of construction, Reliance Power said. The Sasan UMPP is the largest integrated power plant and coal mining project in the world. Coal production has already commenced from the 20 million tonnes Moher and Moher-Amlohri coal mines associated with the power project.
The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 7.31% in June 2014, from 8.28% in May 2014, data released by the government after trading hours on Monday, 14 July 2014, showed. The rate of inflation based on the combined consumer food price indices (CFPI) for urban and rural India eased to 7.97% in June 2014, from 9.56% in May 2014, the data showed. Core CPI inflation which excludes food and energy prices, eased to 7.39% in June 2014, from 7.71% in May 2014.
Inflation based on the wholesale price index eased to 5.43% in June 2014, from 6.01% in May 2014, data released by the government during trading hours on Monday, 14 July 2014, showed. The Reserve Bank of India (RBI) next undertakes monetary policy review on 5 August 2014.
Elsewhere in the Asia Pacific region- Taiwan's Taiex index added 0.51% to 9569.17. South Korea's KOSPI index rose 0.94% to 2012.72. New Zealand's NZX50 fell 0.24% to 5115.40. Indonesia's Jakarta Composite Index grew 1% to 5070.82. Singapore's Straits Times index was edge up 0.01% to 3291.42. Malaysia market closed today in conjunction with Nuzul Al-Quran.
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