Market participants were worries that the recently elected US president Donald Trump's policies stance - from protectionism and fiscal expansion - will boost inflation and lead the Federal Reserve to raise interest rates more than expected weighed on sentiment. US bond yields surged and investors fear that a higher interest rates in the US will spark capital outflows from the emerging equity markets.
The US dollar scaled an eleven-month peak on Tuesday and Treasury yields extended their rise as investors braced for higher inflation in the United States amid expectations of fiscally expansionary polices under Donald Trump's presidency. The risks of faster-than-expected Federal Reserve rate increases have dragged on emerging market assets, particularly equities and currencies, which have benefited from large capital inflows.
Among Asian bourses
Australia Stocks end just a shade lower
Australian share market finished session just a shade lower, recouping some early losses after positive remarks on the economy from the Reserve Bank of Australia offset risk aversion. In the minutes of its November policy meeting, Australia's central bank said it expects core inflation to pick up gradually amid surging prices for key commodity exports and an economy running near potential, implying it might be done cutting interest rates this cycle. The ASX sectors closed mixed, with materials and healthcare issues underperformed other sectors, offsetting gains in energy sector. At the closing bell, the benchmark S&P/ASX 200 index declined 19.50 points, or 0.36%, to 5,326.20, while the broader All Ordinaries index decreased 20.50 points, or 0.38%, to 5,399.80.
Shares of materials sector, which includes mining stocks, declined after iron ore futures in Asia saw a sharp drop on Tuesday. BHP Billiton lost 1.1%. South 32 Ltd and Fortescue Metals followed its lead. Rio Tinto, the world's second largest miner, settled 0.8% lower after it said it was "cautiously optimistic" about the current copper market, which has strengthened in recent weeks.
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The healthcare sector was the worst performer on the index, with its biggest stocks CSL Ltd and Ramsay Health Care losing 1.1% and 2.1%, respectively.
The financial index remained under pressure on subdued outlook for the 'Big Four' banks, which continued to underperform. Westpac Banking Corp and Australia and New Zealand Banking Group, which traded ex-dividend on Monday, lost about 1% each.
Japan Stocks closed mixed
The Japan share market ended edge below neutral line, with investors locking in profits after the benchmark gauge ended the previous day at a nine-month high. 21 out of 33 TSE industry categories closed in positive territory, led by Banks, Warehousing & Harbor Transportation Services, Pharmaceutical, and Mining stocks, while Pulp & Paper, Marine Transportation, and Transportation stocks were notable losers. The 225-issue Nikkei Stock Average fell 4.47 points, or 0.03%, to 17,668.15, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange jumped 2.98 points, or 0.21%, to end at 1,402.98.
The Nikkei has soared more than 8% since Wednesday's hammering, which came in the immediate aftermath of Donald Trump's shock victory in the US presidential election. The gains have come on the back of a surge in the dollar against the yen -- lifting exporters -- as dealers bet Trump's planned stimulus and tax cuts will fan inflation and force the Federal Reserve to hike interest rates more than expected. A day after hitting a five-month high of 108.54 yen, the greenback dipped back slightly in Asia to 108.13 yen. With the yen recovering from its five-month low, investors appear to be moving to pocket profits.
Ad agency Dentsu tumbled 7.4% after its third-quarter results missed expectations, while Sony sank 2.3% and mobile giant SoftBank was 0.6% lower. However, Honda was up 0.4% and Toyota gained 0.4%. Mitsubishi UFJ Financial Group jumped 4.3% after the megabank announced a share buyback.
China Stocks slip on profit booking
Mainland China stock market closed down, snapping a three-day winning streak, as investors took profits in resource stocks after a slump in the country's commodity futures market. Sectors were mixed, with materials and infrastructures lost ground, while gains were seen in properties and consumers. The benchmark Shanghai Composite Index declined 0.11% to close at 3,206.99 points. The CSI 300 index closed marginal 0.01% down at 3,429.87 points.
The most active coke and coking coal futures in Dalian Commodity Exchange tumbled more than 7%, on track for the biggest one-day%age losses since their launch. The selloff spilled over into wider commodities, dragging down rebar, zinc and copper prices, causing a drop in heavyweight resources stocks. Also curbing risk appetite was a weaker yuan, whose further depreciation could unnerve investors despite the boost it could give exports.
Hong Kong Stocks rebound from 3-month low
The Hong Kong stock market closed higher for the first time last three sessions, as the US dollar retreated from recent highs and the Shenzhen Hong Kong Stock Connect prepared for its debut. Market gains were led by strong performances from health and personal care stocks, and insurance stocks. The Hang Seng Index ended the day up 0.46% or 101.69 points at 22,323.91 while the Hang Seng China Enterprises Index jumped 0.59% or 55.23 points to 9,398.10. Turnover decreased to HK$69.5 billion from HK$80.7 billion on Monday.
The Shenzhen Stock Exchange announced it will carry out its fifth system test on Saturday. The test paves the way for the official launch of the highly anticipated stock connect trading mechanism.
Financials stocks ended stronger, led by banking counters on hopes it will benefit from potential rate hike in the US as investors expect Donald Trump will develop infrastructure and push up inflation. Hang Seng Bank (00011) gained 2% to HK$146.5. Bank of East Asia (00023) put on 1.8% to HK$31.7. HSBC (00005) rose 1.6% to HK$61.6. Standard Chartered (02888) dipped 0.5% to HK$61.2. BOCHK (02388) added 0.9% to HK$28.3. China Life Insurance added 2.06% to HK$19.8 and PICC Property and Casualty gained 2.53% to HK$12.14. But restrictions on mainlanders using UnionPay to buy insurance investment products in Hong Kong continued to weigh on AIA Group, dragging it to its lowest level since July, as its stock lost 1.26% to HK$47.20.
Resources counters met profit-taking after last week's rally. China Shenhua (01088) slipped 3% to HK$16.48. China Coal (01898) dipped 3.2% to HK$4.24. Yanzhou Coal (01171) softened 3% to HK$5.82. Maanshan Iron & Steel (00323) sank 4.9% to HK$1.93. Angang Steel (00347) plunged 6.4% to HK$4.26. Metallurgical Corporation of China (01618) fell 3.8% to HK$2.56.
Dairy counters soared on rising raw milk prices as investors worried that quakes in New Zealand will affect the supply of raw milk. China Modern Dairy (01117) surged 8.8% to HK$1.97. Biostime International (01112) added 3% to HK$22.65. China Mengniu Dairy (02319) softened 0.7% to HK$15.04.
Sensex slides
Indian benchmark indices settled with heavy losses, extending the sharp sell off witnessed in the previous session. The barometer index, the S&P BSE Sensex, fell 514.19 points or 1.92% to settle at 26,304.63. The Nifty fell 187.85 points or 2.26% to settle at 8,108.45.
The recent selling by the foreign portfolio investors (FPIs) of Indian stocks also affected sentiment. FPIs sold shares worth a net Rs 1493.27 crore on Friday, 11 November 2016, as per provisional data released by the stock exchanges, when indices slumped around 2.5% on that day. The market remained closed on Monday, 14 November 2016, on account of holiday.
Bank of Baroda jumped 8.49% to Rs 174.35 after net profit jumped 343.54% to Rs 552.12 crore on 2.1% decline in operating income to Rs 12046.60 crore in Q2 September 2016 over Q2 September 2015. Corporation Bank jumped 13.06% to Rs 47.60 after net profit net profit rose 9.4% to Rs 206.28 crore on 5.8% decline in operating income to Rs 5750.62 crore in Q2 September 2016 over Q2 September 2015.
Tata Steel dropped 7.80% to Rs 393.55 after the company reported net loss of Rs 49.38 crore in Q2 September 2016, as against net profit of Rs 5609.43 crore in Q2 September 2015.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 added 0.5% to 6770.43. Indonesia's Jakarta Composite index slipped 0.7% to 5078.50. Taiwan's Taiex slipped 0.1% to 8931. South Korea's KOSPI index declined 0.4% to 1967.53. Malaysia's KLCI was up 0.9% to 1630.56. Singapore's Straits Times index rose 0.4% to 2797.55.
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