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Asia Pacific Market: Stocks rise on Ukraine diplomacy

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Capital Market
Last Updated : Mar 14 2014 | 12:01 AM IST
Asia Pacific share markets closed higher on Thursday, 06 March 2014, on the back of bargain buying in recently battered stocks as diplomatic efforts moderated the crisis over Ukraine, with MSCI's broadest index of Asia-Pacific shares up 0.8%.

The gain in the regional bourses came on reducing immediate fears of military confrontation between Ukraine and Russia after diplomatic efforts.

Investors are still monitoring developments in Ukraine, but the focus is shifting to a slew of economic news late this week, culminating with ECB rate decision and press conference later today and Friday's U.S jobs report for February. BoE will also release rate decision today but will likely stand pat and just release a brief statement.

Among Asian bourses, Tokyo market registered third day of consecutive gain, on catching positive lead from yen weakening against major currencies. Also helping Japanese stocks were comment from Japanese government advisory panel that the world's largest pension fund no longer needs to focus on domestic bonds given quickening inflation. The benchmark Nikkei-225 index added 1.59% to 5134.75, while the Topix index of all first-section shares climbed up 0.73% at 1212.90.

Shares of exporters continued uptrend, lifted by yen depreciation against the greenback. The yen closed at 102.68 per dollar on Thursday after touching 102.76, the weakest since Feb. 21. It declined to 140.96 per euro. Among exporters, SoftBank added 4.9% to 7,959 yen. Honda Motor rose 1.7% to 3795 yen and Sony Corp rose 2.4% to 1825 yen.

Banks, securities, and real estate shares benefited most from the buying, with Mizuho Financial Group up 1.9% to 211 yen, Daiwa Securities Group up 2.6% to 950 yen and Mitsui Fudosan Co up 4.3% to 3290 yen.

In Australia, Australian stock market closed almost flat after trimming losses late afternoon, thanks to better than expected retail spending and international trade reports. The benchmark S&P/ASX 200 Index edged down 0.30 point to 5445.90, while broader All Ordinaries index lifted 2.40 points to 5459.70.

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Australian stock market opened weaker today, as profit taking emanated after the benchmark indices closed at their highest in more than five-and-a-half years on Wednesday. However, the market managed to clawing back early losses after stronger than expected retail sales and trade balance data buoyed sentiment.

The Australian Bureau of Statistics said on Thursday that Australian retail sales rose strongly 1.2% MoM to A$22.925 billion in January in the latest sign record-low interest-rates are boosting consumer sentiment and spending. December sales growth was upwardly revised to 0.7% from 0.5%.

Separately, the Australian Bureau of Statistics said on Thursday that Australia's trade balance posted a surplus of A$1.43 billion compared with a revised surplus of A$591 million in December. Exports rose 4% from December while imports climbed 1%, the government data showed. Commodity exports are growing strongly as the resource-rich economy reaps the benefit of a decade long infrastructure boom that's lifted mining and port capacity.

Shares of retailers and consumer goods companies were stronger after upbeat retail sales data. Shares in department stores David Jones and Myer rose 0.3% and 1.5% to $3.30 and $2.66 respectively.

Billabong shares fell 1.6% to A$0.605 on news that the surfwear retailer could be facing a class action from investors. Slater and Gordon stated it was preparing a lawsuit against the troubled surfwear retailer. The law firm will argue that Billabong has engaged in misleading and deceptive conduct and failed to comply with its continuous disclosure obligations.

Carsales.com shares rose 5% to A$11.03 after the company announced it will pay A$126 million for 49.9% stake of the online assets of SK Encar, South Korea's largest automotive trading business.

Qantas (QAN) rose by 0.88% today after the Sale Amendment Bill (which would lift foreign ownership limits) passed the lower house. The bill still needs to pass a Senate Vote (which seems unlikely).

In China, Mainland China stock market advanced for the first time in three sessions in row, on the back of bargain buying in realty and financials stocks. The benchmark Shanghai Composite Index rose 0.32% to 2059.58 at the close.

However, move on the upside was limited in Shanghai market amid lingering concerns about China's first onshore corporate bond default after Shanghai Chaori Solar Energy Science & Technology Co. (002506) said on Tuesday that it may not be able to make an 89.8 million yuan ($14.6 million) interest payment in full by the March 7 deadline. A default would highlight strain in China's financial system after a trust product issued by China Credit Trust Co. was bailed out in January.

Shares of property developers climbed the most in Shanghai industry groups amid speculation the government won't step up property curbs anytime soon. Poly Real Estate, the nation's second-biggest developer by market value, jumped 5.4% to 7.01 yuan.

China Vanke surged 8.3% to 7.32 yuan. The company reported a net income of 15.1 billion yuan ($2.47 billion) for 2013 after the market closed today

The People's Bank of China drained a net 70 billion yuan from the money market this week. The central bank stepped up its operations this week, noting that 108 billion yuan in outstanding paper set to mature and flow back into the market. It removed 43 billion yuan via 14-day repos and another 50 billion yuan via 28-day instruments on Thursday. On Tuesday, the PBOC removed 50 billion yuan via 28-day repos and another 35 billion yuan using 14-day repos.

In Hong Kong, HK stock market finished higher, on the back of gains in Tencent Holdings to a record and strength in terminal operators, and mainland developers. The benchmark Hang Seng Index advanced 123.19 points, or 0.55%, to finish at 22702.97.

Shares of shipping companied listed in HK rallied on tracking spike in shipping freight rate. The Baltic Dry Index jumped 5% yesterday. Cosco Pacific (01199) shot up 6.5% to HK$10.86.

Shares of internet related companies closed sharp higher. Tencent (00700) gained 2% to HK$635 after hitting all-time high of HK$636. Citic 21 CN (00241), majority-owned subsidiary of Alibaba, surged 34.7% to HK$6.8. China South City (01668), 9.9%-owned by Tencent, jumped 7.6% to HK$4.41.

Chinese developers were up on bargain buying. China Merchants (00144) put on 3.3% to HK$27.85. COLI (00688) jumped 5% to HK$21. CR Land (01109) rose 2.4% to HK$17.42.

China's renewable energy producers listed in Hong Kong advanced after Premier Li said the government will encourage the use of alternative energy sources to combat pollution. Xinjiang Goldwind Science & Technology Co, the nation's largest maker of wind turbines, jumped 7.2% to HK$9.74. China High Speed Transmission Equipment Group Co. surged 10% to HK$6.50 even after saying it expects full-year profit to slide.

Standard Chartered Plc slid 1.3% to HK$162.30 after posting its first annual profit decline in a more than a decade. Prada SpA declined 1.8% to HK$56.05 after Finance Minister Lou said China will impose higher taxes on luxury goods.

In Malaysia, shares in Malaysia market closed higher, with FTSE Bursa Malaysia KLCI up by 0.52% to 1838.69, the highest close since Jan. 2, after Malaysia's central bank held its key interest rate steady at 3.0%, as expected, reiterating that a rise in inflation was expected to be contained as domestic spending cools.

India, Indian stock market surged after data released by the Reserve Bank of India (RBI) after trading hours on Wednesday, 5 March 2014, showed that India's current account deficit declined sharply in Q3 December 2013. The market sentiment further boosted by data showing that foreign institutional investors (FIIs) remained buyers of Indian stocks on Wednesday, 5 March 2014. Gains in Asian and European stocks also boosted sentiment on the domestic bourses.

The S&P BSE Sensex jumped 237.01 points or 1.11% to settle at 21,513.87, a record closing high. Among the 30-share Sensex pack, 24 stocks rose and rest of them fell.

Shares of PSU OMCs rose as crude oil prices declined and as the rupee edged higher against the dollar. BPCL (up 4.49%), HPCL (up 3.69%) and Indian Oil Corporation (up 3.86%) gained. Lower crude oil prices could reduce under-recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at government controlled prices. US crude oil futures for April delivery were off 10 cents or 0.1% to $101.35 a barrel in electronic trading today. On Wednesday, 5 March 2014, crude oil for April delivery fell $1.88, or 1.8%, to settle at $101.45 a barrel on the New York Mercantile Exchange.

Gains in rupee against the dollar aided gains in shares of PSU OMCs. A firm rupee will reduce cost of crude oil imports. PSU OMCs import about 70-75% of their crude oil needs. PSU OMCs hiked the price of petrol by 60 paise and diesel by 50 paise per litre effective 1 March 2014 midnight amid rising crude oil prices and depreciation of rupee against the dollar. This price hike is exclusive of local taxes. PSU OMCs also hiked the price of jet fuel or aviation turbine fuel by 1% effective 1 March 2014.

Bank shares rose across the board. Among private bank stocks, Yes Bank (up 4.66%), Federal Bank (up 0.31%), IndusInd Bank (up 1.07%), ICICI Bank (up 2.56%), Axis Bank (up 2%), Kotak Mahindra Bank (up 1.4%), HDFC Bank (up 1.18%) gained. Among PSU bank stocks, Union Bank of India (up 2.11%), Bank of Baroda (up 0.39%), Canara Bank (up 1.1%), Bank of India (up 0.47%), Punjab National Bank (up 0.43%), State Bank of India (up 0.05%) edged higher.

Lupin fell 0.81%. Lupin after market hours today, 6 March 2014, announced that it has received final approval for its Doxycycline Capsules USP, 50 mg, 75 mg, and 100 mg from the United States Food and Drugs Administration (FDA) to market a generic version of Aqua Pharmaceuticals Monodox Capsules 50 mg, 75 mg, and 100 mg. Lupin's Doxycycline Capsules 50mg, 75mg and 100mg are the AB-rated generic equivalents of Aqua Pharmaceuticals, LLC's Monodox Capsules 50mg, 75mg and 100mg and are indicated in the treatment of infections caused by various microorganisms and as an adjunctive therapy in severe acne.

The company also received final approval from the FDA for its Ciprofloxacin for Oral Suspension, 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) to market a generic version of Bayer HealthCare Pharmaceuticals, Inc.'s (Bayer) Cipro for Oral Suspension 5 g/100 mL and 10 g/100 mL, Lupin said. Lupin's Ciprofloxacin Oral Suspension, 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) is the generic equivalent of Bayer's Cipro Oral Suspension 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) and indicated for the treatment of infections caused by susceptible isolates of the designated microorganisms in various conditions and patient populations.

Elsewhere in the Asia Pacific region, South Korea's KOSPI index added 0.22%. Taiwan's Taiex index rose 0.94%. New Zealand's NZX50 added 0.82%. Indonesia's Jakarta Composite Index rose 0.62%. Malaysia's KLSE Composite added 0.52%. Singapore's Straits Times index added 0.4%.

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First Published: Mar 06 2014 | 5:50 PM IST

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