The US equity markets closed yesterday for holiday, offering limited clues for investors to trade.
The Bank of Japan extended its Stimulating Bank Lending and Growth-Supporting Funding facilities leading to spike in Tokyo markets, making it best performer of the day in the region, while the the People's Bank of China conducted repo operations leading to the decline in mainland market, making it worst performer of the day.
Japan's central bank today, 18 February 2014, pledged to maintain plans to expand the monetary base by 60 trillion yen to 70 trillion yen ($686 billion) per year. It also doubled a funding facility to 7 trillion yen and said individual banks could borrow twice as much low-interest money as previously under a second lending facility.
The People's Bank of China sold repurchase contracts for the first time since June after money-market rates slid and the country reported record lending figures in January. The PBOC conducted 48 billion yuan ($7.9 billion) of 14-day repurchase contracts at a yield of 3.8%, according to a statement on the bank's website.
Among Asian bourses, Japan's stock market skyrocketed today, leading the regional bourses rise, after the Bank of Japan's announcement of an expansion of lending programs increased expectations for more easing action by the central bank. The benchmark Nikkei-225 index advanced 450.13 points, or 3.13%, to finish the session at 14843.24., while the broader Topix index of all first-section shares rose 31.95 points, or 2.68%, to 1224.
The Bank of Japan said on wrapping up a two-day policy meeting on Tuesday that its board decided by a unanimous vote to leave the bank's policy target unchanged, thus maintaining the pace of its large-scale financial asset purchases. The BOJ maintained its plan to increase Japan's monetary base by 60 trillion yen to 70 trillion yen a year. But the BOJ boosted its lending facilities in order to enhance the transition mechanism of the aggressive easing launched last April. The board also decided unanimously to double the scale of its program to make low-interest loans to financial institutions that are leading to or investing in growth-oriented sectors and projects. The maximum amount of the loans will be raised to Y7 trillion from Y3.5 trillion. The timeframe of both programs was extended by a year, according to a statement at the conclusion of the central bank's two-day meeting.
The yen tumbled against major currencies after the central bank announcement. In the forex market, the dollar rose as high as Y102.74 following the BOJ announcement, compared with Y101.93 late Monday in North America. The euro also rose as high as Y140.84, its highest level in almost three weeks, from Y139.72.
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Shares of banks and financials in Tokyo were sharp higher. Mitsubishi UFJ Financial Group Inc., the biggest company in the sector, jumped 5% to 626 yen. Sumitomo Mitsui Financial Group Inc., the second-largest, rose 5% to 4,876 yen.
Export related companies were also finished higher. Nissan Motor Co., an automaker that gets about 34% of revenue in North America, increased 2.1% to 938 yen. Renesas Electronics Corp. soared 8.6% after the Nikkei newspaper reported it will produce increasingly advanced chips for cars as early as this year. Konami Corp. added 7.2% to 2436 yen after Tokai Tokyo Securities Co. recommended buying the gamemaker's shares.
In Australia, Australian stock market finished the session slight higher after fluctuating between gains and losses, with strength in materials and resources blue chips helped to offset losses elsewhere. The benchmark S&P/ASX 200 index advanced 9.90 points to finish at 5392.80, while the broader All Ordinaries grew 7.40 points to 5402.20.
The Australian market commenced trading firmly higher, but thereafter moved seesaw between boundary line throughout the day with the market reacting to a mixed batch of earnings. The market managed to close above the boundary line, thanks to strong interim profit result from Australia's biggest resource company, BHP Billiton which helped to overshadowing some earnings disappointments such as Coca-Cola Amatil (CCL).
Shares of resources giant BHP Billiton advanced 2.3% to A$38.89 after its July-December profit almost doubled from a year earlier. The miner reported a 82.9% rise in half year profit to US$8.1 billion and revenue was up 5.9% to US$33.95 billion . BHP now has US$10.9bn of cash on its books (almost twice as much as in June 2013).
Arrium (formerly OneSteel) fell 2% to A$1.75 despite interim net profit rebounded to A$220 million, up from a A$448 million loss in the previous corresponding period that had featured hefty write-downs.
Shares of Coca-Cola Amatil slumped 5.32% to A$11.22 after the drinks firm saw a more than 80% drop in 2013 profit, weighed by a writedown on its fruit-processing business. Coca-Cola Amatil Limited (CCL) issued a worse than expected full year underlying profit of A$502.8m. The result was partly held back by difficult trading conditions in the Australian grocery channel and a hefty A$404m write-down of its SPC Ardmona assets. A 75% franked final dividend of 32 cents per share will be paid to eligible shareholders on 1st April.
Shares of packaging firm Amcor dropped 4.17% to A$10.33 after its fiscal-first-half profit fell short of market expectation. Global packaging giant reported a 21.2% increase in 1H profit to A$326.6 million. The result was based on continuing operations, reflecting the demerger of the Australasia and Packaging Distribution business (AAPD) which occurred during the half. Shareholders will receive an unfranked interim dividend of A$0.195 per share.
Monadelphous Group share grew 9.7% to A$17.10 after reporting a record half-year profit of A$87.1 million, up 10.1% on the previous corresponding period. MacMahon Holdings added 12% to 14 cents after showing a new Mongolian contract helped it return to profitability in the half-year ended December.
In New Zealand, equities on the New Zealand share market remained mixed, despite firmness in regional peers. By the provisional closing, the NZX 50 index edged up 0.109 points or 0.002% to 4895.097. Within the index, 16 stocks rose, 28 fell and six were unchanged.
Fisher & Paykel Healthcare led gainers, up 3.5% to NZ$4.19 after raising full-year profit guidance for a second time. Fletcher Building rose 0.6% to NZ$9.60 after First NZ Capital upgraded its recommendation.
Melbourne-based miner OceanaGold led decliners on the index, down 2.8% to NZ$2.75. Insurance provider Tower declined 2.4% to NZ$ 1.62 and Restaurant Brands sank 2.1% to NZ$2.74.
Sky Network Television edged up 0.4% to NZ$5.77. The country's dominant pay-TV operator sought preliminary indicators of interest in a retail bond offer, which would raise up to NZ$100 million in capital for the company.
Precinct Properties New Zealand fell 1.5% to NZ$1.015. The commercial property investor reported a gain in first-half earnings on growth in its Auckland rental income, while growth in Wellington stalled.
In China, Mainland China stock market declined for the first time in three consecutive sessions, as investors booked profit made recently on liquidity crunch woes after the central bank drained funds from the banking system. The Shanghai Composite Index declined 0.8% to 2,119.07, while CSI 300 Index slid 1.3% to 2,282.44.
The People's Bank of China drained 48 billion yuan via 14-day repos in its open market operations Tuesday, its first removal of money since last June. The 14-day repo was conducted at 3.8%, compared with a 14-day fixing of 4.49% on Monday.
Most of the sectoral blue chips finished lower, with gauge of financial shares declined the most among 10 industry groups on liquidity crunch woes. Citic Bank retreated 2.5% to 4.69 yuan. China Minsheng Banking Corp lost 1.4% to 7.74 yuan. Changjiang Securities declined 4.2% to 9.39 yuan. Citic Securities Co dropped 3.4% to 11.50 yuan.
The Chinese Commerce Ministry said on Tuesday that foreign direct investment (FDI) in China rose $10.763 billion in January, a 16.11% gain compared to a year earlier, led by strong foreign investment in the services industry. The January FDI gain was below the December absolute increase of $12.080 billion.
The closely watched rubber inventory in China's bonded warehouses in Qingdao jumped more than 11% in the past month to around 340,000 tons, three industry sources said yesterday, potentially capping gains on Tokyo futures. Rubber stocks in Qingdao, which make up the bulk of China's inventory, stood at 339,900 tons Feb. 15, from 304,300 tons Jan. 15 and about 290,000 tons in December, as a plunge in tire grade prices spurred buying. The increase in inventory in the world's largest rubber consumer also suggests speculators are still using the commodity as collateral for financing, where importers raise funds for more lucrative investments elsewhere. The most active July contract on the Tokyo Commodity Exchange hit a high of 233.8 yen (US$2.30) a kilogram, its strongest since Jan. 30, buoyed partly as dealers reacted to a slight decline in rubber inventories monitored by the Shanghai Futures Exchange.
In Hong Kong, shares in the city's market finished the session modestly higher after seesawing between boundary line. . The benchmark Hang Seng Index provisionally finished 51.78 points, or 0.23%, higher at 22587.72.
Hong Kong stocks opened lower Tuesday, after China's central bank reportedly drained 48 billion yuan ($7.9 billion) from the money market on Tuesday through bond-repurchase agreements. But, the market managed to finish tad above the neutral line, lifted by strength in financial and resources players.
Among the HK 50 blue chips, 28 stocks declined and 21 stocks advanced while remaining one stock ended steady. China Petroleum & Chemical Corp declined 1.3% to HK$6, while Bank of East Asia rose 3% to HK$31.35, making themselves the biggest blue-chip loser and gainer.
Market heavyweights were mixed. HSBC (00005) nudged up 0.8% to HK$83.35. China Mobile (00941) inched down 0.5% to HK$73.65. Elsewhere, Fosum Pharma (02196) gained 3.8% to HK$26.2 as it plans to take its 17.45%-owned Chindex International private. SMIC (00981) plunged 16.3% to HK$0.67 after its 4Q net profit dived nearly 70%.
Hong Kong's seasonally adjusted unemployment rate decreased from 3.2% in October - December 2013 to 3.1% in November 2013 - January 2014. The underemployment rate also decreased from 1.4% in October - December 2013 to 1.3% in November 2013 - January 2014, data from the Census and Statistics Department showed.
In India, key benchmark indices edged higher for the second day in a row after Finance Minister P Chidambaram cut the fiscal deficit target to 4.1% of GDP for 2014-15 at the time of announcement of the Interim Budget for 2014-15 on Monday, 17 February 2014, and said that the government will contain fiscal deficit at 4.6% of GDP in 2013-14 and as the government announced lower-than-expected gross market borrowing of Rs 5.97 lakh crore for 2014-15. The market sentiment was boosted by data showing that foreign funds were net buyers of Indian stocks on Monday, 17 February 2014.
As per provisional figures, the S&P BSE Sensex was up 145.47 points or 0.71% to 20,609.53. The index jumped 220.96 points at the day's high of 20,685.02 in late trade, its highest level since 29 January 2014. The index fell 27.58 points at the day's low of 20,436.48 in early trade.
Bank stocks edged higher on renewed buying. Among private bank stocks, AXIS Bank (up 4.36%), HDFC Bank (up 1.3%), Kotak Mahindra Bank (up 4.12%), Yes Bank (up 0.79%) and ICICI Bank (up 2.31%) gained. Among PSU bank stocks, State Bank of India (up 1.32%), Canara Bank (up 2.37%), Union Bank of India (up 2.04%), Bank of India (up 1.22%), Bank of Baroda (up 0.43%) and Punjab National Bank (up 1.75%) gained.
Shares of metal companies rose on value-buying as investors bet on higher global prices and a spurt in Chinese buying. Sesa Sterlite (up 0.45%), JSW Steel (up 2.74%), Hindalco Industries (up 0.71%), Tata Steel (up 1.47%), Jindal Steel & Power (up 6.93%), and Hindustan Copper (up 0.77%) gained. NMDC (down 0.33%), National Aluminum Company (down 0.15%), and Bhushan Steel (down 1.73%) declined. China trade data points to an active January, a leading foreign brokerage firm said in a note, as Chinese steel exports rose 38% year-on-year while iron ore imports rose by 32%. China is the world's largest consumer of copper and aluminum.
Steel Authority of India (Sail) rose 0.17%. The stock turned ex-dividend today, 18 February 2014, for interim dividend of Rs 2.02 per share for the year ending 31 March 2014.
Hindustan Zinc (HZL) fell 2.43% on reports that the government may not complete its sale of minority stakes in Hindustan Zinc (HZL) and Bharat Aluminium (Balco) this fiscal year. The government has proposed to sell all of its 29.5% stake in HZL and its 49% holding in Balco through open auction which are together expected to fetch about Rs 20000 crore. The companies are majority owned by Anil Agarwal's Vedanta Group.
Elsewhere in the Asia Pacific region, Singapore's Straits Times index eked out 0.05% gain as investor appetite for risky assets was dented after China's central bank drained funds from the market on Tuesday as it strengthened its money management strategy after unexpectedly strong credit growth in January put downward pressure on rates. Taiwan's Taiex index added 0.43%. South Korea's KOSPI index added 0.03%. Indonesia's Jakarta Composite edged up 0.02%. Malaysia's KLSE Composite fell 0.12%.
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