Headline equities of the Asia Pacific market mostly advanced on Tuesday, 03 February 2015, on tracking positive lead from Wall Street overnight and as Australia's central bank joining a procession of central banks that have eased policy settings since the start of the year.
The Reserve Bank of Australia cut its benchmark interest rate by 25-basis-point today, citing weak inflation and a stronger-than-desired currency. The move put the cash rate at a historic low of 2.25%.
The Reserve Bank of Australia joins the Monetary Authority of Singapore, Reserve Bank of New Zealand, European Central Bank, Bank of Canada and the central banks of India, Denmark and Switzerland in either announcing substantial policy shifts or easing monetary settings--in some cases dramatically--since January 1.
Among Asian bourses
Australia market extends rally on rate cuts
The Australian share market advanced for ninth consecutive session, closing at a near seven-year high, after Australia's central bank cut its benchmark interest rate to a record low of 2.25%. The benchmark S&P/ASX 200 Index rose 1.46% to 5707.40, a highest level since June 2008. The broader All Ordinaries Index gained 1.43% to 5666.20.
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Financial stocks extended riding higher, following the Reserve Bank of Australia's decision to ease monetary policy. Commonwealth Bank of Australia advanced 0.8% to A$90.40, ANZ Banking Group 2.2% to A$34.11, National Australia Bank 1.6% to A$36.23 and Westpac Banking Corp 1.2% to A$35.26.
Energy stocks advanced sharply after crude oil prices continued its recovery, inching a further 0.6% to $55.10 per barrel in Tuesday trade. Woodside Petroleum advanced 3% to A$35.69, while Origin Energy climbed 5.9% to A$11.70 and Oil Search rose 4.4% to A$8.33. Beach Energy shares surged 15.6% higher at A$1.1675, after Seven Group purchased a stake in the oil producer, fuelling takeover speculation.
Novion shares surged 9.5% at A$2.54, as the property group announced it is attempting a merger with Federation Centres to create Australia's second-largest shopping centre landlord with a market capitalisation of A$11 billion.
Navitas shares plunged 9.5% to A$4.75 after the company reported a 13.2% fall in profit in the first half to A$31.3 million.
The building approval data released by the Australian Bureau of Statistics showed total dwelling units was at 17753, seasonally adjusted, in December 2014, down 3.3% from November, but up 8.8% from the previous year. Separately, Australian Bureau of Statistics data indicated the balance on goods and services was a deficit of A$436 million, seasonally adjusted, a decrease of 57% from November deficit of A$1.016 billion.
Japan stocks tumble as yen appreciates
Japanese share market has suffered second consecutive drop, as investors seeking to take profits after yen appreciated against the greenback and crude oil rebounded to a one-month high. The benchmark Nikkei Stock Average declined 1.27% to close at 17335.85, while the broader Topix has lost 1.16% to close at 1392.39.
Export related stocks declined the most, hut by stronger yen. Toyota Motor Corp fell 1.4% to 7550 yen, while Honda Motor Co. slumped 2.9% to 3593.5 yen. Canon Inc dropped 1.2% to 3,669.5 yen.
Shares of energy players advanced, but tire makers and airline carriers dropped after oil prices climbed to a one-month high. Oil extended its rebound after plunging to an almost six-year low last week. Inpex Corp rose 6.9% to 1,381.5 yen and oil-services provider JGC Corp. jumped 4.5% to 2,476.5 yen. JX Holdings Inc. gained 3.2% to 452.2 yen.
Bridgestone Corp. tumbled 3.3% to 4480.5 yen and Toyo Tire & Rubber Co. fell 4.4% to 2592 yen as higher crude prices threatened to increase costs for tiremakers. Japan Airlines tumbled 5.2% to 3720 yen, and ANA Holdings Inc. retreated 1.6% to 315.5 yen. Shipping line Nippon Yusen KK slumped 4.6% to 332 yen.
China stocks rebound on policy easing hopes
Mainland China share market closed sharply higher, snapping five sessions of falling streak, as investors chased for bottom hunting across the board on expectations of further monetary easing. The Shanghai Composite ended the day up 2.5% at 3204.91, recovering some of the 7.5% it lost over the past five sessions.
Mainland market responded positively to an injection of cash from the central bank and growing expectations of a further round of monetary easing. The People's Bank of China offered 35 billion yuan worth of seven-day reverse repurchase agreements, a short-term loan to commercial lenders, and 55 billion yuan of 28-day reverse repos on Tuesday. Market pundits were expecting a cut in the reserve requirement ratio for banks. There was also discussion of an interest rate cut.
Shares of banks and financial companies advanced the most in Beijing market on expectations of a further round of monetary easing and an interest rate cut. Brokerages Citic Securities and Haitong Securities soared 6.1% and 5.5%, respectively; while Bank of China added 3.6% and Bank of Communications rose by 3%.China Minsheng Bank rose 2.07% to 9.36 yuan and Bank of Beijing gained 1.89% to 10.23 yuan, despite recent reports that officials of both banks have been implicated in corruption cases. China Life Insurance jumped 9.03% to 36.72 yuan, while Haitong Securities gained 6.12% to 20.63 yuan.
Shares of energy players advanced after oil prices climbed to a one-month high. Oil extended its rebound after plunging to an almost six-year low last week. PetroChina added 4.19% to 11.69 yuan, Yanzhou Coal gained 4.01% to 13.75 yuan and China Shenhua was 3.24% up at 19.13 yuan.
The State Administration of Foreign Exchange stated on Tuesday that China current account surplus was $61.1 billion and a capital-account deficit was $91.2 billion for the fourth quarter ended December 2014, as compared a revised current-account surplus of $72.2 billion and a revised capital and financial account deficit of $9.0 billion in the third quarter ended September 2014. For full year 2014, China's saw a $213.8 billion current-account surplus and a deficit of $96.0 billion on the capital account.
Hang Seng lifts 0.29%
Hong Kong share market ended modest higher for the first time in four consecutive sessions, after swinging between gains and losses. The bargain buying sparked on hopes for fresh economy-boosting measures by China's leaders. The Hang Seng Index rose 70.04 points or 0.29% to 24554.78, off an intra-day high of 24602.60 and day low of 24327.51. Turnover fell to HK$80.31 billion from HK$85.17 billion on Monday.
Within HK 50 blue chips, 22 stocks rose and 27 fell, while remaining 1 stock ended steady. Lenovo (00992) soared 7.3% to HK$10.92, making it the biggest blue-chip winner, after the company said its third-quarter revenue rose 31% to $14.1 billion after its acquisition of Motorola.
Shares of energy players advanced, but airline carriers dropped after oil prices climbed to a one-month high. Oil extended its rebound after plunging to an almost six-year low last week. CNOOC (00883) jumped 3.5% to HK$10.64. PetroChina (00857) added 1.9% to HK$8.6. Both China East Air (00670) and China South Air (01055) dipped 6% to HK$3.71 and HK$3.8. Air China (00753) slipped 4% to HK$6.88.
Chinese financials advanced. HSBC rose 0.35% to HK$71.50, China Life (02628) bounced 4.5% to HK$31.25. Ping An (02318) put on 3.3% to HK$83.4. New World Development put on 0.65% to end at HK$9.36.
Sun Hung Kai & Co. ended down 6.1% to HK$6.67 after agreed to sell its 70% stake in Sun Hung Kai Financial to Everbright Securities Financial for HK$4.1 billion.
Sensex falls as RBI holds interest rate
Indian stock market declined for the third straight session weighed down by rate-sensitive banking and realty shares after the RBI disappointed markets by not lowering interest rates. The BSE Sensex fell 0.42% to 29000.14, while the broader Nifty ended 0.46% lower at 8756.55, marking their lowest close since Jan.21.
RBI today left interest rate unchanged at 7.75%, but cut the statutory liquidity ratio (SLR) - the amount of funds that lenders must set aside - by 50 basis points to 21.5% of deposits from February 7.
Sectorwise, the BSE Banking index suffered the most by falling 2.61% largely on the fall in stocks post the RBI policy announcement. BSE Realty index fell 1.43%, Healthcare index (0.92%), Power index (0.68%) and Auto index (0.66%) among others.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.66% to 9448.73. South Korea KOSPI fell 0.04% to 1951.96 New Zealand's NZX50 added 0.44% at 5781.95. Indonesia's Jakarta Composite index was up 0.3% to 5291.72. Singapore's Straits Times index was down 0.5% at 3406.86. Malaysia market closed for public holidays.
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