Asia Pacific share market closed down on Wednesday, 05 November 2014, as an economic growth downgrade in the euro zone, an unexpected widening of the US trade deficit, and weaker than expected China service PMI data dampened risk sentiments.
The European Commission trimmed its growth forecasts for the 18-nation Eurozone economy to just 0.8% this year and 1.1% in 2015, naming tensions in Eastern Europe and in the Middle East, and a lack of investment, as reasons behind the decision. The figures were down from a spring forecast of 1.2% growth this year and 1.7% in 2015.
The US trade deficit widened in September to $US43.0 billion as exports slowed and imports remained flat from the previous month.
China's services purchasing managers' index fell to 52.9 in October from 53.5 a month earlier, HSBC Holdings Plc. and Markit Economics said today. A reading above 50 indicates expansion. Data this week showed the China's official non-manufacturing PMI fell to 53.8 last month from 54 in September.
Among Asian bourses
Aussie stocks end slightly lower
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Australian share market finished the session tad below neutral line, as loss in the resource stocks were more than offset by rebound in Woolworths shares and a bumper profit result from the Commonwealth Bank. The benchmark S&P/ASX 200 Index slid 0.04% to 5517.90 yen and the broader All Ordinaries Index dropped by 0.1% to 5492.80 points.
Shares of miners and energy players were major drag on the Sydney market, as concerns about growth in the eurozone fuelling sell-offs. Among the major energy players, Santos dropped 2.2% to A$14.13, Origin Energy shed 1.3% to A$14.13 and Oil Search dipped 2.1% to A$8.50. Shares in resources engineering firm WorleyParsons were down 5.2% to A$12.70. Among the major miners, Rio Tinto shares lost 0.3% to A$60.16, while iron ore miner Fortescue Metals fell 2.1% to A$3.31. BHP Billiton dropped 0.6% to A$33.82 despite confirming that it will begin to export US oil condensate products from the Gulf of Mexico.
Financial stocks were stronger, led by Commonwealth Bank of Australia, up 1% to A$81.56 after Australia's largest bank boosted first quarter earnings by close to 10% to $2.3 billion, helped by lower impaired loans and a growing customer base. Australia and New Zealand Banking Group was up 0.4% at A$33.79. Westpac Banking Corp jumped 0.3% to A$34.59. National Australia Bank fell 0.6% to A$34.42.
Woolworths shares rebounded 2.5% to A$34.13, on bargain buying following slump of 7.5% over Monday and Tuesday, after its weaker than expected first quarter sales figures.
CSR shares jumped 2.9% to A$3.60 after posting a 48% surge in its half-year profits to $68.4 million with the buildings product group crediting residential construction and better performances in its aluminium division for the rise.
Nikkei closes at seven-year high
Japanese shares advanced to seven months high in volatile trade, on sustained buying, buoyed by yen depreciation to 114-level against greenback and last week's unexpected decision from the Bank of Japan to increase its program of quantitative easing. The benchmark Nikkei Stock Average gained 0.44%, or 74.85 points, to 16937.32, the best close since late 2007.
The yen continued its slide against US dollar, following the BOJ decision to pump even more money into the economy after a second-quarter contraction. The yen lost 0.6% to 114.28 per dollar. A weak yen is good for Japanese exporters as it makes them more competitive abroad and inflates their repatriated profits.
The Bank of Japan said on 31 October 2014 that it raised its target for annual purchases of Japanese government bonds to 80 trillion yen ($706 billion), while tripling buying of real estate investment trusts. On the same day, the Government Pension Investment Fund set allocation targets of 25% each for Japanese and overseas equities, up from 12% each. GPIF will cut domestic bonds to 35% of assets from 60%.
Shares of export-related stocks advanced the most in Tokyo, as the Bank of Japan's announcement Friday to widen its asset-purchase scheme sent the yen tumbling to 114 against the dollar. Honda Moto Co added 2.4% to 3,622 yen. Canon Inc gained 1.7% to 3,534 yen.
Cyberdyne soared 7.6% to 3,705 yen after Nomura raised its price target to 4,400 yen from 3,850 yen and recommended the shares.
SoftBank fell 2.3% to 7,840 yen on disappointing earning numbers. The company said on Tuesday that its operating profit will be about 900 billion yen in the year ending March, down 10% below its previous forecast and compares with 1.09 trillion yen reported a year earlier.
Fuji Oil Co. sank 3.3% to 321 yen after the refiner projected an 800 million yen loss for the first half, missing its previous forecast of a 2.1 billion yen profit.
Shanghai Composite falls 0.47% on profit taking
Mainland China share market closed down in volatile trade, registering first fall in seven consecutive sessions, as profit booking resumed after the benchmark indices hitting 21-months peak yesterday. The selloff pressure also mounted on concern recent gains were excessive and after a private report showed expansion in the nation's service industry slowed. The benchmark Shanghai Composite Index, which tracks both A and B shares, closed at 2419.25, down by 0.47% from yesterday's closure of 2430.68, a highest close since 8 February 2013 when it finished at 2432.40. The Shanghai Composite gained 5.6% during the six-day winning streak.
Shares of utilities players advanced the most in mainland market after the National Development and Reform Commission said in a statement that nation will test power-transmission price reform in Shenzhen. The trial will change the current model for grid companies to make money.
Hang Seng ends 0.63% down
Hong Kong share market declined for second consecutive day, on tracking weak lead from Wall Street overnight and concerns over euro zone growth after the European Union slashed its economic forecasts for the region, The Hang Seng Index fell 0.63%, or 150.04 points, to 23695.62. Turnover reduced to HK$67.20 billion from HK$70.8 billion on Tuesday.
Shares of insurers were down, with PICC falling 2.5% to HK$13.82 after the China's biggest non-life insurer said it plans to raise 7.25 billion yuan in a rights offer of 0.9 shares for every 10 in Hong Kong and China to replenish capital. People's Insurance Co (Group) of China lost 1.8% to HK$3.34.
Macau gaming stocks extended yesterday's weakness on poor October GGR data. Official data showed that Macau gross gaming revenues fell 23.2% to MOP28 billion in October. Sands China (01928) fell 3.3% to HK$45.25. It was the biggest blue chip loser. Galaxy Ent (00027) declined 3% to HK$50.85. MGM China (02282) dipped 2% to HK$24.3. Wynn Macau (01128) dropped 3% to HK$26.4.
Oil majors fell across the board on lower December Brent oil price, which fell US$1.96 to US$82.82. CNOOC (00883) slipped 2.8% to HK$11.68. PetroChina (00857) sank 2.5% to HK$9.36. Sinopec (00386) softened 1.5% to HK$6.56.
Sensex ends marginally in the green
Indian stock market eked out small gains amid divergent trend in various index constituents. While banking stocks, PSU OMCs, and pharma stocks rose, metal & mining and cement stocks dropped. As per provisional closing, the S&P BSE Sensex was up 40.96 points or 0.15% at 27,901.34. The 50-unit CNX Nifty was up 14.15 points or 0.17% at 8,338.30.
Dr Reddy's Laboratories rose 2.24% to Rs 3,252 after a foreign brokerage reportedly upgraded the stock to "overweight" from "equal-weight". According to the foreign brokerage, the drugmaker's US pipeline outlook has strengthened and the stock's valuation appears to be reasonable.
GAIL (India) shed 0.23%. The company today, 5 November 2014, clarified that allegations made by a section of people on cut in APM gas supplies are not true and there has not been any arbitrary or selective reduction in allocations to small industrial customers in South Gujarat.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.3% to 8962.60. South Korea KOSPI fell 0.19% to 1931.43. Malaysia's KLCI sank 0.37% to 1840.59. New Zealand's NZX50 shed 0.4% to 5402.15. Singapore's Straits Times index rose 0.18% at 3287.54. Indonesia's Jakarta Composite index dropped 0.1% to 5066.83.
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