Asia Pacific share market, barring Japan, ended sharply higher in volatile trade on Tuesday, 08 September 2015, as investors chased for bottom fishing after weak China trade data raised expectations of more policy easing in the coming months. Meanwhile, upbeat Germany's trade data also boosted up global risk sentiments. The MSCI Asia Pacific Excluding Japan Index gained 1.95 percent to 392.10.
German exports and imports hit record highs in value terms in July, suggesting foreign appetite for goods from Europe's largest economy remains robust despite a slowdown in China, while domestic demand is also holding up well.
The General Administration of Customs said today that China's exports dropped 6.1% from a year earlier to 1.2 trillion yuan (US$188.9 billion) last month, compared with the contraction of 8.9% in July even though China surprisingly depreciated the yuan in the middle of August. Imports lost 14.3% to 836.1 billion yuan, down further from the decrease of 8.6% one month ago and reflecting depressed commodity prices and weak domestic demand. As a result, trade surplus widened to 368 billion yuan, up 20.1% year on year.
However, gains on the regional bourses were capped on lingering worries over China - and uncertainty over US interest rates. China's August exports fell less than expected but a steeper slide in imports pointed to continuing economic weakness, adding to concerns over the health of the economy, a day after foreign exchange reserves numbers revealed accelerating outflows.
Highlighting the growing concerns about economic stability and capital outflows from China, its foreign exchange reserves fell by a record $94 billion in August as the central bank struggled to steady the yuan after its surprise devaluation.
Many investors are still cautious as they aren't sure if the U.S. Federal Reserve will start rising short-term rates later this month or wait longer to act.
Among Asian bourses
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Resources stocks drive Australia market rally
The Australian share market ended sharply higher, as investors chased for bottom fishing across the board, led by energy, materials, financials, and utilities blue-chip stocks. The benchmark S&P/ASX 200 index rebounded 84.78 points, or 1.7%, to 5115.20 points. The broader All Ordinaries index closed 82.50 points, or1.63%, up at 5133.50.
Resource stocks were top gainers in the ASX index, with the materials sector adding 1.8% and energy rising 2.6%. Among the big miners, BHP Billiton added 2.1% to A$24.70 and Rio Tinto rose 2.2% to A$50.22, meanwhile Fortescue Metal gained 1.8% to A$1.96. energy heavyweight Origin Energy rebounded 3.2% to A$7.72 and Santos jumped 5.3% to A$4.41. Oil Search climbed up 17.4% to A$7.90 on reports that Australian energy giant Woodside Petroleum had made an estimated A$11.65 billion bid for the company as it looks towards Papua New Guinea's (PNG) market. Though, oil and gas heavyweight Woodside Petroleum fell 3% to A$29.66.
The Australian currency (AUD), used as a liquid proxy of China trades, rebounded from 6-1/2-year low against dollar on Tuesday, as NAB's monthly business survey showed that while business confidence dropped to a two-year low, companies reported a marked improvement in actual conditions. But gain rise was limited after the country's largest bank Westpac sharply downgrade its forecast for the Australian dollar to end the calendar year at US66c, down from an earlier forecast of US70c, citing confidence in Australia and the Australian dollar has been particularly shaken by developments in the emerging markets. The Australian dollar has fallen by close to 27 per cent against the US dollar in the last year, as the economy has been hammered by falling commodity prices, a slowdown in China, and returning strength in the US dollar as the US Federal Reserve has moved closer to raising interest rates.
Around late afternoon, the Australian dollar was last traded at 0.6977 against US dollar, 0.6242 against the euro, 83.7760 against the Japanese yen, 0.4545 against the British pound, 0.6807 against Swiss franc, 0.9264 against Canadian dollar, and 5.4076 against the HK dollar.
Nikkei falls 2.43%
The Japanese share market finished the session down, dragged down by yen appreciation against the major currency baskets and mounting concerns about further economic slowdown in world second largest economy after weaker than expected trade data. Investors also reacted to Japan's revised growth numbers released earlier which market experts expects it fail to ease concerns about the state of the nation's economy. Total 29 out of 33 TSE sectors ended down, with losses were led by Pharmaceutical, Foods, Retail Trade, Insurance, Land Transportation, Precision Instruments, Construction, and Electric Power & gas issues. The Nikkei Stock Average declined 433.39 points, or 2.43%, to end at 17427.08 points, its lowest level since 3 February 2015. The broader Topix index tanked 2%, or 28.94 points, to 1416.71 at the close in Tokyo.
Japanese yen appreciated against greenback as investors soured risk sentiment and induced buying of the Japanese currencies amid concerns about China's economy and uncertainty over the U.S. Federal Reserve's policy outlook continued to dominate trading themes.
Japanese stocks linked to demand from China and foreign tourists lost ground, after the key Watchers' sentiment index for Japan's current economic climate slumped to a seven-month low of 49.3 in August from 51.6 in July for the first drop in two months in light of a Chinese economic slowdown and stock market sell-off. Chemical and cosmetics firm Kao Corp fell 4.2%. Retail-store operator Seven & I Holdings Co. dropped 4.1%.
Exporters were mainly on the back foot as the yen gained ground against the U.S. dollar. Sony Corp sagged 3.2%, while other blue chips such as Canon Inc and Toyota Motor Corp notched down 2% and 0.6%, respectively.
MS&AD Insurance Group Holdings Inc. closed down 2.6% after news its group unit, Mitsui Sumitomo Insurance Co., is in advanced talks to buy British nonlife insurer Amlin Plc.
Brokerage house Nomura Holdings retreated 3% after Barclays cut its rating to 'underweight' from 'equal weight.'
Toshiba Corp shares gave up Monday's gains to slump 4.4% after delivering a net loss of 37.8 billion yen for the last fiscal year on Monday.
The latest revised figure, issued by the Cabinet Office, showed Japan economy contracted 0.3% during the April-June quarter, slightly better than the 0.4% contraction originally announced for the quarter. The contraction in private consumption was revised to 0.7% from an earlier estimate of a 0.8% fall, helping to ease the overall economic shrinkage estimate.
Shanghai Composite surges 2.92%
A late hour rally helped the Mainland China's stock market to close sharply higher. The rebound was driven by news of National Development and Reform Commission (NDRC) approval of two new infrastructure projects, stock exchanges proposed plans for a "circuit breaker" system aimed at restoring market stability and government plans for removal of personal income tax on dividends for shareholders who hold stocks for more than a year. Investors ignored trade data that showed China's imports in August fell 14.3% in yuan-denominated terms from a year ago, while exports fell by 6.1%. The Shanghai Composite Index gained 2.92%, or 90.03 points, to 3170.45 points. The Shenzhen Component Index gained 3.29% to close at 10,320.23 points. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, soared by 5.68% to close at 2,001.16 points.
The late day rally in the Mainland market also fueled on speculation state-backed funds bought shares. China's government spent 1.5 trillion yuan ($236 billion) trying to shore up its stock market since a rout began three months ago through August, as per media reports.
Banking heavyweights gained the most in Beijing on speculation that government-backed investors intervened. Bank of China and China Construction Bank gained 0.8% and 1.5%, respectively.
Hong Kong market rebounds 3.3%
Hong Kong stock market ended up in volatile trade on following strong rebound in the Mainland China A-share market and other regional bourses. The Hang Seng Index ended up 675.52 points, or 3.28%, at 21259.04 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 376.26 points, or 4.13%, to 9479.48 points. Turnover reduced slightly to HK$67.2 billion from HK$69.3 billion on Friday.
Automakers were broadly higher, led by Great Wall Motor (02333), up 16% to HK$21.85, after the automaker announced both its output and sales jumped in August. GAC Group (02238) rose 4.5% to HK$5.1. Brilliance China (01114) and Geely Auto (00175) shot up 11% and 10% to HK$9.12 and HK$3.11 respectively.
Wharf shares ended up 7.9% to HK$43.25 after Morgan Stanley upgraded its rating on the stock to "overweight" from "equal weight". The research house noted that Wharf is trading at an attractive valuations (at 63% discount to NAV versus peers at 45% NAV discount on average. Its FY2016 P/B of 0.4x and dividend yield of 4.3% also look compelling.
CM Bank (03968) surged 10% to HK$19.62 on news that China Merchants Group has spent HK$500 million to add stake in the lender by 28.08 million shares.
Shares of Glencore bounced up more than 3%, following a 7% rise in its London-listed stock overnight. The gains come after the mining and commodities trading giant announced a restructure plan to turn around the business in face of slumping commodity prices.
Sensex rebounds 1.7%
Banking, metal and power sector stocks led rally for key benchmark indices. The barometer index, the S&P BSE Sensex, jumped 424.06 points, or 1.70%, to settle at 25,317.87. The 50-unit CNX Nifty rose 129.45 points or 1.71% to settle at 7,688.25. A firm trend in global markets aided the up-move on the domestic bourses. The sentiment on the domestic bourses was also boosted by the recommendation of a committee set up by the previous government to assess international competitiveness of Indian financial sector that the levy of Securities Transaction Tax (STT) in the futures & options be abolished.
FMCG major Hindustan Unilever (HUL) dropped 2.08%. HUL after market hours today, 8 September 2015, said that the company has today, 8 September 2015 signed an agreement for the sale and transfer of its bread and bakery business under the "Modern" brand to Nimman Foods, an investee company of the Everstone Group, for an undisclosed consideration. The decision is in line with the company's strategy to exit non-core businesses, while continuing to drive its growth agenda in the core packaged foods business.
Tata Power Company rose 4.26% after the company announced that the foundation stone laying ceremony for a greenfield defence production facility was held at Vemagal in Karnataka today, 8 September 2015. Over the next one year, Tata Power will make an investment of Rs 450 crore in this unit.
NTPC gained 1.64%. NTPC clarified during market hours today, 8 September 2015, that its 2,340 megawatts power generation station at Kahalgaon in Bihar is functioning as per schedule. The company said that the management remains committed to maintain power generation at the thermal power station.
JSW Energy jumped 10.11%. Jaiprakash Power Ventures rose 5.21%. JSW Energy announced during trading hours today, 8 September 2015, that it has entered into a binding memorandum of understanding (MoU) with Jaiprakash Power Ventures (JPVL) to acquire 100% stake in the 500 megawatts (MW) Bina Thermal Power Plant located in the Sagar district of Madhya Pradesh. JSW Energy also announced that it has concluded the acquisition of two hydroelectric projects located in Himachal Pradesh from JPVL.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.2% to 8001.50. South Korea's KOPSI dropped 0.2% to 1878.68. New Zealand's NZX50 rose 0.7% to 5610.31. Singapore's Straits Times index added 1.2% at 2885.32. Indonesia's Jakarta Composite index added 0.4% to 4318.59. Malaysia's KLCI rose0.3% to 1587.12.
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