Asia Pacific share market advanced on Wednesday, 15 October 2014, as investors chased for bargain-buying in recently heavily-sold blue chips on growing expectation that slump in energy prices would benefit the region's major economies. Meanwhile, buying spree bolstered after disappointing Chinese inflation data fuelled expectations more monetary easing was yet to come in the world's second largest economy. The MSCI Asia Pacific Index rose 0.3% to 135.85.
The crude oil price declined to the lowest closing price since June of 2012 after the International Energy Agency reduced its forecast for demand for this year and 2015. Countries such as Japan, China, India, Indonesia and South Korea are major importers of oil and other fuels. They could benefit in multiple ways from a sustained drop in crude prices from improved trade balances to reduced subsidy bills. Lower overall energy prices could also flow through to higher disposable income for consumers.
US benchmark West Texas Intermediate for delivery in November sank $3.90 to $81.84 a barrel on the New York Mercantile Exchange on Tuesday, a decline of 4.5% and the lowest closing price since June of 2012. European benchmark Brent oil for November delivery tumbled $3.85 (4.3%) to $85.04 a barrel, its lowest level since November 2010. Since mid-June, WTI has fallen 24% and Brent has dropped 27%.
China's National Bureau of Statistics said on Wednesday that consumer price index (CPI) rose 1.6% in September from a year earlier, down from 2% in August and a near five-year low. The CPI rose 0.5% in September from the previous month. The producer price index fell 1.8% for the 31st consecutive month. With inflation well below the official annual target of 3.5%, Chinese policymakers will have ample scope to announce more stimulus measures.
Among Asian bourses
Nikkei rises for the first time in six days
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Japanese share market bounced back to green terrain after five days of losses today, as investors chased for bargain buying in recently heavily-sold blue chips, thanks to greenback moderate gains against the yen. The Nikkei 225 index gained 0.92%, or 137.01 points, to finish at 15073.52, while the Topix index of all first-section shares rose 0.77%, or 9.40 points, to 1223.67.
The dollar made moderate gains against the yen in Asia trade Wednesday. The dollar was at Y107.25 from Y107.05 late Tuesday in New York. A stronger dollar is generally good for exporters and currency sensitive companies, as they have more room to cut prices on goods they sell overseas and can buy more yen with the profits they send back home.
Shares of air carriers advanced after Morgan Stanley raised its rating on the airline sector to in-line. ANA Holdings gained 4.8% to 241.2 yen, its biggest increase since May 2013. Skymark Airlines Inc. jumped 9% to 219 yen. Japan Airlines Co. added 6.3% to 2,818 yen.
Shares of energy explorers declined after crude futures fell sharply overnight to a two-year, four-month low on worries about ongoing demand weakness. Japan Petroleum sank 1.9% to 3,585 yen. Inpex Corp., an oil explorer, dropped 1.3% to 1,311.5 yen.
Shares of tire maker Bridgestone Corp gained 4.3% to 3503.50 yen after the JPMorgan initiation at Overweight, citing the potential for both profitability and medium-term growth. The brokerage set a 4500 yen price target on the stock.
Aussie shares extend gains
Australian share market closed higher for second consecutive day, on the back of gains in telecom, tech, financial, industrial, retailer, and mining stocks. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each rallied by 0.7% to 5245.60 points and 5238 points, respectively. Turnover was relatively healthy with 1.77 billion shares worth of A$4.76 billion traded today.
Shares of material sector closed higher for third consecutive day, led by resources giant BHP Billiton with gain of 1.1% to A$33.80, while main rival Rio Tinto jumped 0.4% to A$60.99 after the global miner's latest production report showed it shipped a record 78 million tonnes of iron ore during the September quarter. Iron ore miner Fortescue Metals Group closed 0.3% down at A$3.64.
Whitehaven Coal was down 3.2% to A$1.495, despite a 40% increase in its quarterly coal production. In the three months to September 30, Whitehaven produced 3.288 million tonnes of coal.
Shares of banks and financial companies were standout, with top four lenders being major gainers. Commonwealth Bank of Australia jumped 1.8% to A$75.45, ANZ Banking Group 0.7% to A$31.37, Westpac Banking Corp 1% to A$32.46, and National Australia Bank 1% to A$32.54.
Tabcorp Holdings shares climbed up 3.7% to A$3.61 after announcing group revenues were up 6.6% for the first quarter, largely due to a very successful World Cup campaign.
Australia Westpac Melbourne Institute Index of Consumer Sentiment rose 0.9% from 94.0 in September to 94.8 in October. This was the eighth consecutive month that the index has printed below 100, indicating that pessimists have outnumbered optimists for eight consecutive months.
Shanghai Composite jumps 0.6% on bargain buying
Mainland China market closed higher for the first time in four sessions in row on Wednesday, 15 October 2014, on renewed speculation governments would take bolder measures to shore up their economies after China's inflation rate slowed more than expected in September to a near five-year low. Eight out of ten SSE sectors ended higher, with shares of healthcare, utilities financial and material companies being major gainers. The benchmark Shanghai Composite index advanced 14.19 points, or 0.6%, to finish at 2373.67.
China, which boosted its water investment budget by 7% this year, plans to use financial enticements to attract private capital to major water projects. The nation will encourage investment by allowing private investors to buy special licenses or take stakes in water projects, Zhang Minglun, deputy head of the investment division under the National Development and Reform Commission (NDRC), said on Tuesday. The government plans to prioritize investment support on projects that have private investors by injecting capital and offering subsidies or loans with preferential terms, Zhang said. China will also improve how water project prices are set, he said. China plans to start construction of 172 major water projects by 2020. Total investment on projects currently being built could amount to about 600 billion yuan (US$98 billion), Zhang said. The government has arranged an investment budget of 76.7 billion yuan for water projects this year, said Li Pumin, spokesman for the NDRC, China's top economic planning agency.
Hang Seng bounces 0.4%
Hong Kong equity market advanced on tracking positive lead from offshore market overnight and gain in the mainland A-shares, with property companies and casino operators leading the advance. The benchmark Hang Seng Index added 92.08 points, or 0.4%, to close at 23140.05.
Shares of casino operator advanced. Sands increased 2.2% to HK$42.25, while Galaxy Entertainment Group gained 2.6% to HK$46.95.
Aviation counters rose across the broad on falling oil prices. Air China (00753) gained 2.73% to HK$4.89. China Eastern Airlines (00670) shot up 6.2% to HK$2.76. China Southern Airlines (01055) soared 5.5% to HK$2.69. Cathay Pacific (00293) also put on 0.6% to HK$13.98.
Chinese banks were also up on catch-up buying. ICBC (01398) gained 1% to HK$4.93 after Temasek built up its stake by another 34.57 million shares. CCB (00939) rose 1.3% to HK$5.56.
New World Development Co increased 2.9% to HK$9.53 after winning a tender for a site in the city that could provide at least 2,900 new homes.
Brokerage houses stocks also ended higher. Central China Securities Co. surged 22% to HK$3.53 after being approved to participate in the Hong Kong-Shanghai stock link. China Galaxy Securities Co rose 3.3% to HK$5.69 and Haitong Securities Co. increased 1.7% to HK$12.20 after they also received approval
Elsewhere in the Asia Pacific region-- Indonesia's Jakarta Composite index grew 0.82% to 4962.94. Malaysia's KLCI fell 0.53% to 1786.84. New Zealand's NZX50 rose 0.33% to 5162.87. Singapore's Straits Times index rose 0.14% at 3198.72. South Korea KOSPI fell 0.17% to 1925.91 after a report showed the nation's jobless rate was unchanged at 3.5% last month. Taiwan's Taiex index declined 1.3% to 8655.51. Indian stock market closed on account of General Assembly Election 2014 in Maharashtra and Haryana.
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