Japan's shares rallied sharply today, backed by comment from Japanese Prime Minister Shinzo Abe that he would present new economic-growth plan next June which would include measures to bring more women into work. Meanwhile, mild weakening of the yen and continued rallies on Wall Street also helped bolster buying sentiments. The benchmark Nikkei225 index closed 164.45 points higher at 16174.44, after surpassing 16000-level previous day for the first time since 2007.
The export-oriented Japanese stocks were mostly higher, helped by mild weakening of the yen against major currencies. TDK Corp. was up 1.92% and Renesas Electronics Corp added 2.26%. Softbank Corp. surged 3.42% on reports that the telecom major intended to issue bonds in the U.S. to finance its reported plan to buy T-Mobile US via its Sprint unit.
Shares of Panasonic Corp climbed up 0.42% on reports that it would call off its tie-up with Sony Corp to develop advanced televisions, although Sony shares underperformed with a 0.3% gain.
Auto makers were higher in the wake of generally stronger Japan car-sales data. Honda Motor Co. added 0.47% and Mitsubishi Motors Corp. rose 1.46%. Toyota Motor Corp improved 2.92% despite an Agence France-Presse report that Saudi Arabia had announced a recall of more than 400,000 Toyota vehicles due to purported problems involving unintended acceleration.
Japanese megabanks were also higher with shares of the nation's largest lender Mitsubishi UFJ Financial Group gaining 2.3%, while Sumitomo Mitsui Financial Group and Nomura Holdings added 2.3% and 4.7% respectively.
The Bank of Japan released minutes of the November 20-21 meeting on Thursday. A point to note is that two members expressed some concerns over slowdown in GDP growth in Q3. One member worried that the reduction in growth rate was not temporary but could represent a downward shift in the trend. Meanwhile, another member showed concern on the large contribution from inventories and fall in wages. Nonetheless, many members were optimistic that the GDP data continued to show positive movements, particularly domestic demand.
Japanese yen weakened from prior day closure against all 16 major peers except the Australian dollar on Thursday. The yen lost 17% against the dollar this year, the biggest decline among the 16 major currencies amid speculation the BOJ will continue unprecedented stimulus while the Federal Reserve pares quantitative easing as the U.S. economy recovers. Around late afternoon, the US dollar stood at Y104.76, the euro at Y143.36, British pound at Y171.55, Swiss franc at Y116.86, Canadian dollar at Y98.42 and Australian dollar at Y93.06.
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In South Korea, shares in Seoul market reversed gains to close just below the flat line after hitting their highest level in nearly a month earlier in the session. The benchmark KOSPI index closed 0.11% down at 1999.30.
A weaker yen sparked declines among major South Korea exporters as it hurts their competitive advantage. Samsung Electronics, LG Display and Hyundai Motors slipped between 0.2 to 0.6%.
The consumer confidence index in South Korea stayed at 107 in December, unchanged from November, the nation's central bank said in a statement today, 26 December 2013.
In China, shares of the China's financial market dropped sharply, as investors cashing in profit made in previous three sessions on renewed jitters over liquidity crunch after the People's Bank of China suspended repurchase or reverse repurchase operations today. The Shanghai Composite dropped 33.25 points to finish at 2073.01, while the CSI 300 Index sank 39.78 points to close at 2305.11.
Risk sentiments in the Chinese market assets were under pressure amid ongoing concerns over tightening liquidity conditions in the financial system and rising interbank lending rates. Investors have remained cautious over the level of bad debt at Chinese banks, particularly when interbank lending rates are high.
The People's Bank of China skipped Thursday's open market operations as interbank market rates eased from the elevated levels seen earlier this week and last week. The move came as the seven-day repurchase rate steadied around 5.3% after rising to six-month peaks last week.
The bank ended a near-three week drought on Tuesday with an injection of 29 billion yuan in a bid to bring down money market rates amid year-end cash squeeze. Quiet injections of short-term funding at the end of last week failed to calm market nerves. The seven-day rate, which had hit as much as 10% in intraday trading, averaged 5.5759% on Wednesday following the Tuesday injection.
Market sentiments hammered amid concerns that 29 billion yuan won't make much of a dent in the cash demands of China's financial institutions while the PBOC's reliance on seven-day maturities highlights its unwillingness to provide longer-term funding. Further, the Chinese New Year holiday falls at the end of January and will create fresh strains on the system -- one-month rates already began responding to the onset of that holiday.
China's ruling Communist Party reportedly unveiled on Wednesday a five-year plan to fight pervasive graft, with particular attention on corruption that triggers protests or happens in the course of economic reforms.
China's economy this year is likely to expanded 7.6%, compared with the government's 7.5% target, a News Agency in China reportedly said, citing a report by the State Council.
In Singapore, shares in Singapore market went higher, sending the benchmark Straits Times Index 0.23% higher to finish at3134.36, after touching intraday peak of 3,138.15, its highest level since Dec. 5.
In India, key benchmark indices moved in a narrow range in positive zone in afternoon trade. The market breadth, indicating the overall health of the market, was strong. Twelve out of thirteen sectoral indices on BSE were in the green. The barometer index, the S&P BSE Sensex, was up 41 points or 0.19%, up 22.71 points from the day's low and off 28.51 points from the day's high.
Among the 30-share Sensex pack, 20 stocks gained and rest of them declined. Tata Power Company (up 3.6%), ONGC (up 2.1%) and NTPC (up 1.56%) gained.
Many FMCG stocks edged higher. Colgate-Palmolive (India) (up 0.89%), Dabur India (up 1.25%), Godrej Consumer Products (up 0.58%), Hindustan Unilever (up 0.4%), Marico (up 1.28%) and Tata Global Beverages (up 3.53%) gained.
Capital goods stocks were in demand on renewed buying. ABB (up 2.93%), Bhel (up 0.78%), BEML (up 1.69%), Bharat Electronics (up 0.64%), Crompton Greaves (up 0.9%), Siemens (up 2.78%) and Thermax (up 1.81%) rose.
Elsewhere in the region, Malaysia's KLSE Composite added 0.47%. Taiwan's Taiex index added 0.21%. Financial markets in New Zealand, Australia, Hong Kong and Indonesia were closed for national holidays. '
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