Asia Pacific share market closed mostly lower on Tuesday, 16 June 2015, on mounting uncertainty over Greece bailout agreement with its creditors and on caution before U.S. Federal Reserve statement. The MSCI Asia Pacific Index fell 0.7% to 146.37.
Global markets are getting worried of a Greek debt default after a breakdown in talks between Greece and its European creditors over the weekend. No further talks with the Greek government are planned until a meeting of eurozone finance ministers on Thursday, leaving the two sides little time to reach an agreement before a deadline for a eurozone portion of Greece's 245 billion euro bailout on 30 June 2015, the same day Greece faces a 1.6 billion euro payment to the International Monetary Fund.
Investors across the major Asian markets remained cautious ahead of the Federal Reserve meeting and a new round of talks over Greece's debt crisis. On Thursday, European finance ministers are likely to urge Greece to make concessions to avoid a default.
Investors are cautiously awaiting for the outcome of two-day policy meeting by Fed officials starting Tuesday. The Federal Open Market Committee will wrap up a two-day meeting on Wednesday followed by a news conference by Federal Reserve Chairwoman Janet Yellen. Investors are monitoring closely to see if the Fed will give clearer signs of going ahead with a rate increase later this year following a set of brighter economic data.
Among Asian bourses
Nikkei extends losses ahead of central bank meets
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Japanese share market extended falling streak for second straight day today, as weak lead from offshore market overnight, uncertainty over Greece's debt negotiations with its creditors, and growing cautious ahead of a U.S. Federal Reserve statement and a Bank of Japan policy decision, both due later this week. The Nikkei Stock Average declined 129.85 points, or 0.64%, to end at 20257.94, off the intraday high of 20368.21. The Topix index of all Tokyo Stock Exchange First Section issues decreased 0.73%, or 12.06 points, to close at 1639.86.
Shares of export-related companies mostly down even as the yen weakened against the dollar following comments on the currency from Bank of Japan Governor Haruhiko Kuroda in parliament on Tuesday. Kuroda told parliament that he wasn't trying to influence the exchange rate in remarks last week that sent the yen climbing against the greenback. Kuroda last week said the yen was unlikely to weaken further in real effective terms. Among blue-chip exporters- Nikon Corp declined 1.5%, Fanuc Corp 1.8%, and Mazda Motor Corp 1%. Toyota Motor Corp lost 0.2%, Honda Motor Co 1.2%, and Isuzu Motors 0.1%, and Suzuki Motor Corp 0.7%. Sony Corp sank 1.4% ahead of its presentation at the E3 videogame industry conference in Los Angeles. Toshiba Corp fell another 1% amid continued concern over its accounting problems.
Financials were also down amid growing cautious ahead of a U.S. Federal Reserve statement and a Bank of Japan policy decision, both due later this week, with Mizuho Financial Group Inc down 2.2%, Sumitomo Mitsui Financial Group Inc down 3.2%, and Orix Corp down 2.3%.
Mitsui Mining & Smelting Co. lost 1.7% after Mizuho Financial Group Inc. cut its rating on the stock to neutral from buy.
Game-maker Square Enix Holdings Co. jumped 2.9% after previewing its Final Fantasy title at a conference in Los Angeles.
Australia market closes softer
The Australian share market closed marginally down, as uncertainty over Greece's debt crisis overshadowed couple of deal news in the financial arena. The benchmark S&P/ASX 200 Index eased 3 points, or 0.05%, to 5535.80, while the broader All Ordinaries Index decreased 6.30 points, or 0.11%, to 5535.20. Market turnover was above average with 1.94 billion shares changing hands worth of A$4.83 billion.
Materials and resources stocks declined on tracking weak finish of base metals in the international index. Iron ore producer Fortescue Metals Group fell 4.9% to A$2.32, while Rio Tinto sank 2.4% to A$55.89 and BHP Billiton slipped 0.8% to A$27.70. Shares of iron-ore extractor Arrium lost 3.3% to A$0.145 as J.P. Morgan cut its price target on the name and said the company's debt level was uncomfortably high. The debt-laden steel and mining group flagged potential major asset sales, downgraded earnings guidance and expects to book a A$320 million write-down on Monday as lower iron ore prices batter its mining business.
Meanwhile, a 2% loss for the front-month Brent North Sea crude-oil futures overnight helped drag energy stocks down, however it pushed the civil aviation stocks higher. Oil Search declined 3.5% at A$7.26, Woodside Petroleum 0.6% to A$35.45 and Santos 1.7% to A$7.98. WorleyParsons fell 2.2% to A$10.42 and Beach Energy 1.4% to A$1.025. Qantas Airways rose 0.3% to A$3.24 and Virgin Australia Holdings 2.4% to A$0.44.
Financial stocks rallied sharply, led by Westpac Banking Corp, up 1.7% to A$32.27 on news it was selling as much as a half billion U.S. dollar worth of shares from its stake in BT Investment Management. Among other financials, Australia & New Zealand Banking Group added 1.3% to A$32.25, National Australia Bank 0.8% to A$32.78 and Commonwealth Bank of Australia 0.7% to A$82.43.
Insurance Australia Group rallied 4.6% to A$5.825 after announcing an alliance with Warren Buffett's Berkshire Hathaway Inc including Berkshire's purchase of about A$390 million worth of IAG stock.
China market extends losses
Mainland China share market declined for second straight day, after Beijing's latest ruling on margin financing and ahead of fresh wave of IPOs this week. The benchmark Shanghai Composite Index tanked another 175.56 points, or 3.5%, to 4887.43, after washing out 2% yesterday.
Chinese regulators' tightened margin regulations for over-the-counter shares. China Securities Regulatory Commission said investors need to have a minimum daily balance of 500000 yuan ($80000) securities assets in the last 20 trading days to take margin loans. The securities regulator also said the size of margin finance balance at each broker may not exceed four times of their net capital.
The tightening adds stress to a market already facing liquidity pressure from a prospective wave of 25 initial public offerings this week, which estimated to lock up 5.7 trillion yuan ($918 billion) of liquidity.
Shares of industrial, telecom and technology companies suffered heavy losses in Beijing, with Trainmaker CRRC Corp. and Shenzhen InfoTech Technologies Co. plunging by the 10% daily limit, while phone-equipment maker ZTE Corp. slid 5.4%.
Hong Kong market ends 1.1% down
The Hong Kong stock market finished down for second consecutive session on tracking steep selloff in the Mainland A-share market after news about delay launch of Shenzhen-HK Connect program. Meanwhile, risk sentiments deteriorated further on mounting uncertainty over Greece bailout agreement with its creditors and on caution before U.S. Federal Reserve statement. The Hang Seng Index stumbled 295.11 points or 1.1% to finish at 26566.70, off an intra-day high of 26892.88 and day low of 26553.04. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, sank 369.83 points, or 2.71%, to 13252.93 points. Turnover increased to HK$123.15 billion from HK$116.5 on Monday.
Resource and industrial stocks were among the major decliners in Hong Kong market, with Jiangxi Copper Co down 3.9%, Baoshan Iron & Steel Co down 6.7%, Aluminum Corp. of China down 4.8%. Among industrials, Sany Heavy Industry Co lost 2.5% and Dongfeng Motor Group Co fell 2.1%
Hong Kong listed Chinese insurers also down, with PICC Group (01339) down 7% while CPIC (02601) weakened 5% despite of report that its life premium growth of 1.5% for the first five months of the year.
Hong Kong Exchange & Clearing dropped 1.6%, extending yesterday's 3% selloff after newswire reported that Shenzhen-HK Connect program will postpone its launch date due to technical problems.
China Coal Energy Co dropped 3.8% after reporting a 25% decrease in its January-May coal output.
Cathay Pacific Airways retreated by 1.4%, failing to get a boost from Daiwa Securities' upgrade of the name to outperform from hold.
Sensex extends gain for 3rd session in a row
Indian stock market extended winning streak for third straight session, as investors continued value buying on recently oversold stocks, with banking and auto heavy-weights being major gainers. The S&P BSE Sensex rose 99.96 points or 0.38% to settle at 26,686.51. The Nifty rose 33.40 points or 0.42% to settle at 8,047.30.
Metal & mining stocks were mixed. Shares of Vedanta and Cairn India, both, edged lower after Indian proxy advisory firm InGovern Research Services said that the proposed merger of Cairn India with Vedanta would be against the interest of Cairn India's minority shareholders. IT stocks were mixed. Telecom stocks declined. Kotak Mahindra Bank fell on reports that the Foreign Investment Promotion Board has once again deferred the bank's proposal for raising foreign investment limit in the bank to 55%. PSU OMCs rose after announcing fuel price changes after trading hours yesterday, 15 June 2015.
Foreign portfolio investors (FPIs) sold Indian shares worth a net Rs 585.86 crore into the secondary equity market yesterday, 15 June 2015, as per data from National Securities Depository. Domestic institutional investors (DIIs) bought shares worth a net Rs 650.47 crore yesterday, 15 June 2015, as per provisional data released by the stock exchanges.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.5% to close at 9212.78. South Korea's KOSPI dropped 0.7% to 2028.72. New Zealand's NZX50 lost 0.1% to 5813.93. Singapore's Straits Times index declined 0.8% at 3298.09. Malaysia's KLCI closed marginally higher at 1722.24. Indonesia's Jakarta Composite index added 0.7% to 4872.60.
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