Market participants were cautiously awaiting for the BoE monetary policy decisions and FOMC minutes due later today. BoE is widely expected to keep interest rate unchanged at 0.50% and asset purchase target at GBP 375 billion. A major focus is on the vote split where markets expected Ian McCafferty to continue to dissent on rate decision and vote for a hike. Sterling has been under some pressure since July on speculations that recent market turmoil would delay BoE's rate hike deep into mid next year. But the pound is supported this week on a couple of factors including improving risk market sentiments, better than expected data. Also, in the latest update, IMF raised UK growth forecast for 2015 from 2.4% to 2.5% and kept that for 2016 at 2.2%. That compared to the backdrop of lowering global growth forecast from 3.3% to 3.1% in 2015 and from 3.8% to 3.6% in 2016. ECB monetary policy meeting accounts will also be watched in European session.
Regarding FOMC minutes, markets main focus will remain on whether Fed will lift interest rates from the current near zero level by the end of the year. The Fed opted not to hike rates in September in the wake of cooling global growth and fears of a deepening slowdown in China. Last week's soft U.S. non-farm employment report prompted markets to scale back expectations that the Fed would hike rates later this year.
Former Fed chair Ben Bernanke said that a few months are needed to gauge how the recent global market turmoil would affect the US economy. And that will set up a tough call for Fed officials to decide on rates. Bernanke noted that was a "pretty good domestic expansion" that could withstand the drag from emerging markets. Meanwhile, IMF repeated its urge for Fed to refrain from hiking rates "until there are further signs of inflation rising steadily, with continued strength in the labor market".
Investors will have an opportunity to gauge the thinking of U.S. central bank officials when the minutes of the Fed's September meeting, at which it opted not to hike rates, are released later in the day.
St. Louis Fed President James Bullard, Minneapolis Fed President Narayana Kocherlakota and San Francisco Fed President John Williams will also speak later on Thursday.
Among Asian bourses
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Nikkei falls 1% after soft factory order data
The Japanese share market finished softer, snapping six-day winning streak, with sentiment dampened by data showing Japan's machinery orders- a key indicator of the economy's strength- fell for a third straight month in August. But losses were limited with a growing proportion of market observers betting the BOJ will additionally ease its monetary policy at its next decision-making meeting on Oct. 30. Total 24 out of 33 TSE first-section sector sub-indexes weighed down, with decliners were led by Air Transportation, Retail Trade, Pharmaceutical, Foods, Agriculture & Forestry, and Precision Instruments issues. The Nikkei Stock Average tumbled 181.81 points, or 1%, to end at 18141.17 points, meanwhile the broader Topix index shrank 0.8%, or 11.77 points, to 1481.40 at the close.
Machinery orders from the Cabinet Office released before the opening bell on Thursday, showing Japan's core private-sector machinery orders unexpectedly slumped 5.7% on the month to Y759.4 billion in August for the third straight monthly drop after -3.6% in July as fears of a further Chinese slowdown made many firms cautious about investing in equipment. Core orders fell 3.5% on year, the first drop in nine months. Weak machinery orders increased uncertainty over a recovery of capital investment in the coming months.
Retail issues led decliners, with investors less than impressed by March-August earnings posted after the end of trading Wednesday. Aeon dropped 108.50 yen, or 5.5%, to 1,865.50 yen after the supermarket operator posted year-on-year profit for the six months through August but kept its profit forecast for the full business year unchanged.
Footwear chain ABC-Mart fell 400 yen, or 5.3%, to 7,180 yen, having also reported increased profits but slightly downgraded its net profit forecast for the year through next February.
Shares of machinery and electric machinery issues performed well following recent declines, with bearing giant Minebea up 62 yen, or 4.8%, to 1,348 yen, and heavy machinery maker IHI up 6 yen, or 1.7%, to 349 yen.
Australia market ends modestly up
The Australian share market closed modestly higher after paring early gains late afternoon on caution ahead of BoE monetary policy decisions and FOMC minutes later today in the global market. The market strength was largely due to strong performances from materials and energy blue-chip stocks and banks which helped to overshadow losses elsewhere. The benchmark S&P/ASX 200 index and the broader All Ordinaries index both gained 0.2% to 5210.40 points and 5241.40 points, respectively.
Shares of energy and resources companies extended gains, on the back of improved sentiment around commodities. Among energy stocks, Origin Energy surged 5.4% to A$6.43, Santos 8.5% to A$5.50, and South32 Ltd 8% to A$1.545. Among top miners, BHP Billiton gained 3.1% to A$25 and Rio Tinto rose 1.9% at A$53.18. Iron-ore producer Fortescue Metals Group finished up 5.2% to A$2.21 after iron ore futures in China have climbed nearly 3% with steel mills looking to replenish inventories of the raw material after a week-long National Day break.
The banks and financial stocks were also added strength, with Commonwealth Bank of Australia up 0.5% to A$75.37, Westpac Banking Co up 0.1% to A$30.54 and National Australia Bank up 0.4% to A$31.30. Bank of Queensland is soared 7.3% to A$12.46 after presenting better than expected earnings.
ANZ Banking Group was up 0.8% to A$27.93 after it sold its car finance unit to Macquarie. Macquarie Group has agreed to buy ANZ's Esanda Dealer Finance unit for A$8.2 billion, including debt. The purchase will see Macquarie's motor vehicle finance assets climb to A$17 billion, from A$9 billion currently, the statement said. About A$6.2 billion of the Esanda assets are retail receivables, while A$1.6 billion are bailment and other finance offered to car dealers. Macquarie also kicked off a A$400 share placement to institutional investors, and a share purchase plan for eligible shareholders. The Macquarie stock is in a trading halt.
China's Shanghai Composite surges after week-long holiday
The Mainland China's stock market ended sharply higher on first day of trade after a week-long holiday, catching up to a rally in global equities. China's market rally was partly driven by the positive economic data released over the holiday break, such as a slightly better than expected official manufacturing index and speculation the government will take more steps to boost the world's second-biggest economy. All 10 SSE sectors added strength, with technology and health-care companies leading gains. The Shanghai Composite Index surged 2.97%, or 90.58 points, to 3143.36 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 4%, or 68.61 points, to 1785.39. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, spurted 5.17%, or 107.64 points, to close at 2190.31.
Shares of technology and drug companies were biggest gainers in the 10 SSE industry group. East Money Information Co. and Guangzhou Baiyunshan Pharmaceutical Holdings Co. both surged 10%.
Realty developers were also added strength to the market, after the government cut the minimum down payment requirement for first-time homebuyers to 25% from 30%. Poly Real Estate Group Co. jumped 3.3%.
Auto makers were also up after China reduced the purchase tax on vehicles with engines 1.6 liters or smaller by half to 5% through the end of next year. Great Wall Motor Co. rallied 8.7%, while SAIC Motor Corp. surged 5.8%.
China today launched the first phase of its much anticipated China International Payment System (CIPS), a milestone in bolstering yuan's global usage and furthering cross-border clearing of its currency from the Chinese mainland instead of offshore centres abroad.
Hong Kong market falls on profit taking
Hong Kong stock market closed down, shrugging off the positive cues from the mainland and Wall Street, as investors booked recent gains on caution ahead of the release of minutes from the Federal Reserve's latest policy meeting. The Hang Seng Index declined 160.85 points, or 0.71%, at 22354.91 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 107.38 points, or 1.03%, to 10287.41 points. Turnover reduced to HK$93.45 billion from HK$108.67 billion on Wednesday.
SABMiller, the second-biggest brewer in the world, rejected the latest bid from Anheuser-Busch InBev. China Resources (00291) slid 5.52% to HK$14.04. San Miguel HK (00236) slid 3.47% to HK$1.39.
Macau gaming stocks regained momentum after the China National Tourism Administration said the number of visitors to Macau during the Golden Week holiday rose 6.3%. Sands China (01928) gained 1.63% to HK$28.1 and Galaxy Ent (00027) rose 1.42% to HK$25.05. MGM China (02282) put on 5.56% to HK$10.64. Wynn Macau (01128) picked up 2.95% to HK$11.16.
Oil majors snapped three-day winning streak on profit booking. CNOOC (00883) dropped 5.99% to HK$8.95, making itself the top blue-chip loser. PetroChina (00857) dipped 2.38% to HK$6.14 and Sinopec (00386) slid 1.1% to HK$5.41.
Shares of movie theater equipment maker IMAX China, rallied in their trading debut in Hong Kong, last seen at around HK$34.10 ($4.40), well above the initial public offering (IPO) price of HK$31.00.
Indian stocks fall on profit booking
Indian stocks market closed weaker on the back of profit booking and weak rupee. At 15:30 IST, Sensex slid 190.04 points at 26,845.81 while Nifty lost 48.05 points at 8,129.35. Sensex and Nifty gained 1,419 points and 381.70 points in the past six trading sessions till October 7.
In the 50-share index, UltraTech Cements, Adani Ports, Vedanta, Tata Steel and Asian Paints gained between 1.1% and 2.3%. On the other hand, GAIL, Reliance Industries, ITC, Kotak Mahindra Bank and YES Bank slid between 1.4% and 2.9%.
Genesys International Corporation was locked at 20% upper circuit at Rs 69.30 on BSE after the company said that Quikr, an online cross category classifieds company is making an investment in Genesys' venture A.N.Virtual World Tech.
Tribhovandas Bhimji Zaveri rose 10 after the company said it has tied up with Snapdeal, India's leading online marketplace, to offer its diamond jewellery and gold coins on Snapdeal's online marketplace.
Rajesh Exports shares gained over 1% after the company informed BSE that it has bagged an export order worth Rs 1,360 crore of designer range of gold and diamond studded jewellery and medallions from UAE.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.6% to 8445.96. South Korea's KOPSI added 0.78% to 2019.53. New Zealand's NZX50 fell 0.4% to 5625.78. Singapore's Straits Times index slipped 0.5% at 2947.03. Indonesia's Jakarta Composite index rose 0.1% to 4491.43. Malaysia's KLCI climbed up 0.2% to 1692.20.
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