Headline shares of the Asia Pacific market closed higher on Wednesday, 03 September 2014, as stronger-than-expected economic data from US, China and Australia lifted investors' spirits. The MSCI Asia Pacific Index advanced 0.7% to 148.97.
The U.S. manufacturing expansion revved up in August, according to a survey released Tuesday by the Institute for Supply Management. The upbeat reading added to expectations of acceleration in U.S. economic growth in the second half. The ISM's manufacturing purchasing managers index increased to 59.0 in August from 57.1 in July. The PMI is at its highest level since March 2011.
An official industry group, the Department of Service Statistics of NBS and China Federation of Logistics & Purchasing said its non-manufacturing purchasing manager index was 54.4% in August 2014, increased 0.2%age points over the previous month, and 4.4 percentage points higher than the threshold.
HSBC Holdings Plc and Markit Economics China's services purchasing managers index surged to 54.1 in August, a 17-month high, from 50 in July. Readings above 50 for both gauges indicate expansion.
A rebound in services PMI bolsters optimism the Chinese government is succeeding in shifting its economy away from exports and investment toward domestic consumption.
The Australian Bureau of Statistics (ABS) said on Wednesday that the Australian economy grew seasonally adjusted 0.5% in the June quarter 2014. Gross domestic product (GDP) growth in the 12 months to June was 3.1%, seasonally adjusted.
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But gain on the upside was limited ahead of closely-watched European Central Bank meeting on Thursday and the US labour data on Friday.
A worse-than-forecast euro-zone purchasing managers' index stoked speculation that the area's central bank will increase stimulus. Since taking over in November of that year, Draghi has pledged to hold borrowing costs low and said in July 2012 he would do whatever it takes to save the euro. In June of this year, the ECB took its deposit rate negative for the first time and cut its benchmark rate to a record low of 0.15%. The ECB meets to discuss monetary policy on Sept. 4.
Among Asian bourses
Nikkei hits seven-month high
Japanese share market closed at highest level in over seven months today on hopes that a cabinet reshuffle by Prime Minister Shinzo Abe will give fresh impetus to his growth-oriented policies. The benchmark Nikkei 225 index added 0.38%, or 59.75 points, to finish at 15728.35, the third consecutive day of gains, which took the market to levels not seen since late January. The Topix index of all first-section shares climbed 0.35%, or 4.52 points, to 1301.52.
Prime Minister Shinzo Abe has announced his new cabinet in the afternoon. Most of the appointments came very much as leaked through the media, notably for health and welfare minister Yasuhisa Shiozaki and secretary general Sadakazu Tanigaki. The first appointment is important as an indicator of imminent equity buying by the vast government pension fund and the second as a hint that Abe intends to honor the commitment to hike the sales tax.
Exporter shares rode high as the yen weakened to an eight-month low and as solid US manufacturing data boosted the prospects for their business. Nikon Corp., the world's No. 2 camera maker, rose 1% to 1529 yen. Sony Corp jumped 2.7% to 2073 yen. Fast Retailing added 1.7% to 33735 yen after announcing a 3.8% rise in August same-store sales at its domestic Uniqlo stores
Apparel seller United Arrows gained 3.2% to 3950 yen after the firm booked an August same-store sales rise of 4.5%, reversing two straight months of declines. Shoe merchant ABC-Mart Inc closed up 2.8% to 5450 yen after it booked an August same-store on-year sales rise of 8.5%.
Chipmaker Renesas Electronics closed at its daily limit-up level of 1024 yen, jumping 17% on heavy volume following a media report that it may cut more jobs as it finishes a massive ongoing restructuring effort and after the semiconductor manufacturer said a government-backed fund's stake in the company is too large.
Yokogawa Electric surged 9.1% to 1356 yen after the electronic-component maker announced a voluntary retirement program for its domestic operations targeting regular employees between the ages of 30 and 59. JPMorgan subsequently upgraded shares to Neutral from Underweight.
Australia market ends lower
Australian share market closed marginally down after washing out intraday gain. The negative finish occurred due to losses in materials, energy, consumer goods stocks were more than offset by gain in telecom, realty, industrial and financial stocks. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each declined by 0.04% to 5656.10 points and 5654.60 points, respectively.
The financial stocks were up, led by top four lenders. Commonwealth Bank of Australia grew 0.3% to A$81.70, National Australia Bank 0.6% to A$35.31, Westpac Banking Corp 0.1% to A$35.22 and ANZ Banking Group 0.2% to A$33.67. Insurer Suncorp gained 1.4% to A$14.81 and QBE added 1.4% to A$11.811. Bendigo and Adelaide Bank shares rose 1.6% to A$12.81 after announcing A$200m capital raising to support its balance sheet growth and to ensure it continues to have strong regulatory capital levels.
Materials and resources stocks declined, with resources giant BHP Billiton sliding 1.9% to A$36.20. BHP Billiton's fall was a result of it trading ex-dividend, meaning new buyers are no longer entitled to its latest dividend. Rio Tinto lost 1.1% at A$62.34 and Fortescue Metals shed 2.4% to A$4 as iron ore price has fallen again to match a two-year low of just below $US87 a tonne.
Shanghai Composite climbs to 15-month high
Mainland China share market closed at highest level in 15-months on the back of rise in non-manufacturing purchasing manager data for August. Meanwhile, buying pressure accelerated on rumor the government will increase support for strategic industries to bolster economic growth. The benchmark Shanghai Composite advanced 22.58 points, or 1%, to 2288.63, the highest level since 3 June 2013 when index closed at 2299.25. Turnover increased to 187.55 billion yuan from Tuesday's 170.93 billion yuan.
Shipping stocks rallied after the State Council said that Beijing plans to build an efficient shipping system by 2020. China Shipping led gains by 4% while COSCO Shipping ended 0.2% higher after increasing as much as 2% earlier.
Shares of military linked stocks advanced for third consecutive session amid optimism over the industry's reform. Shanghai Securities News reported on Monday that China will announce detailed rules for restructuring military research institutes in October, with about 16 listed companies are expected to be injected with military research institutes' assets. China Spacesat Co jumped 2.8% to 22.55 yuan. Aerospace Communications Holdings rose 2% to 17.07 yuan.
Hang Seng climbs 2.3% up
Hong Kong share market closed sharply higher on the back of strong HSBC China services PMI data and the risk of protests in Hong Kong's financial district eased. The Hang Seng Index ended sharp 568.93 points, or 2.3%, higher at 25317.95. Market turnover rose to HK$100.48 billion, the highest since 10 April when Chinese Premier Li Keqiang announced Shanghai-HK Connect initiative, from HK$70.6 billion on Tuesday.
Chinese banks rebounded on reports that the Big Four lent more than 110 billion yuan in the last week of August. ICBC (01398) put on 4.6% to HK$5.27. CCB (00939) and BOC (03988) gained 4% and 2.8% respectively.
Shares of Henderson Land soared 6.2% to HK$55 on news of its chairman buildup of his stake in the company.
Tencent gained 2% to HK$127.9 as the internet giant announced an investment in a medical network.
Sensex closes at record for seventh day
Indian stock market closed at fresh peaks, as shares of IT companies rose on reports of US manufacturing activity hitting a nearly 3-1/2-year high last month and construction spending rebounding strongly in July. The 30-share Sensex closed 0.45%, or 120.55 points, higher at 27139.94 points, while the National Stock Exchange's broader barometer 50-share Nifty ended 0.39%, or 31.55 points, higher at 8114.60 points.
Global credit rating agency Moody's Investors Service reportedly said today, 3 September 2014, that India's fiscal deficit and inflation outlook could prevent any upgrades in the country's sovereign rating. Moody's said that India's finances would remain vulnerable to future cyclical downturns and external shocks. While stronger growth in this large and diverse economy will help to counterbalance these credit challenges, they limit further upward momentum in the sovereign rating, Moody's said. The credit agency rates India at "Baa3", the lowest investment-grade rating, with a "stable" outlook.
A survey released by Markit Economics today, 3 September 2014, showed that growth in India's service sector activity slowed in August 2014. Adjusted for seasonal influences, the headline HSBC India Services Business Activity Index posted 50.6 in August, down from 52.2 in July. On the positive side, weaker activity has softened inflation indicators within the survey.
Elsewhere in the Asia Pacific region-- South Korea's KOSPI index fell 0.02% to 2051.20. Taiwan's Taiex index added 0.54% to 9450.35. New Zealand's NZX50 rose 0.05% to 5224.40. Singapore's Straits Times index added 0.6% to 3348.77. Indonesia's Jakarta Composite index rose 0.43% to 5224.13. Malaysia's KLCI has lost 0.15% to 1864.87.
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