Asia Pacific share market inclined on the first trading session of new year, Tuesday, 03 January 2017, after upbeat Chinese and British manufacturing data bolstered investor sentiment. But gains in the regional markets were capped by concern over a rising U.S. currency, which makes emerging markets less attractive.
Investors welcomed a private business survey showing China's factory activity picked up more than expected in December as demand accelerated, with rate of output growth accelerated to a 71-month high, highlighted by a sustained increase in new business during December. The China Caixin manufacturing Purchasing Managers' Index (PMI) released on Tuesday showed that manufacturing activity climbed in December to 51.9 from 50.9 in November - the fastest rate of improvement in three years. A reading above 50 indicates expansion in a sector, whereas a reading below 50 represents contraction.
The private manufacturing survey results came after official figures at the weekend showed manufacturing activities expanded for a fifth month in December but the pace fell from November due to slower production. The official purchasing managers' index, reflecting conditions in largely state-owned manufacturers, edged down to 51.4 in December from November's 51.7, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.
Britain's private survey showed manufacturers gaining business from the slide in the value of the pound since the country's decision in June to leave the European Union. The survey of manufacturers from financial information company IHS Markit and the Chartered Institute of Procurement & Supply showed the sector enjoying a strong rise in new business in December. The so-called purchasing managers' index a broad gauge of business activity rose to a two-and-a-half year high of 56.1 points from the previous month's 53.6. Markit noted that "the UK manufacturing sector starts 2017 on a strong footing. The headline PMI hit a two-and-a-half year high in December, with rates of expansion in output and new orders among the fastest seen during the survey's 25-year history." And, "a plus point from the December survey was that the expansion was led by the investment and intermediate goods sectors, suggesting capital spending and corporate demand took the reins from the consumer in driving industrial growth forward."
The U.S. oil prices rose in the first trading hours of 2017 on Tuesday, buoyed by a deal for OPEC and non-OPEC production cuts which kicked off on Sunday. During Asian trade, U.S. crude rose 0.54% to $54.01 per barrel , while global benchmark Brent was up 0.55% at $57.13.
The U.S. dollar racked up its biggest rise in almost three weeks against a basket of the world's other major currencies to leave it just 1% off December's 14-year high. Dollar index reaches as high as 103.52 and is set to test recent high at 103.65.
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Among Asian bourses
Australia Market ends highest in 19 months
Australian share market ended at a 19-month high on the first trading day of the year, boosted by strong Chinese manufacturing data that indicated the economic rebound in Australia's main trading partner remains intact. All ASX sectors inclined, exception being bullion counter, with financials and miners being major gainers. At the closing bell, the benchmark S&P/ASX 200 index inclined 67.40 points, or 1.19%, to 5733.20, while the broader All Ordinaries index added 65.50 points, or 1.15%, to close at 5784.60. The index climbed 7% in 2016, its best yearly performance since 2013, as gains in most commodity prices powered a bull run among miners.
Shares of financial sector gained, with Australia & New Zealand Banking Group leading rally, up 1.7% to A$30.94, after the Australia's third-largest bank by market cap said it would sell its stake in Shanghai Rural Commercial Bank Co to China COSCO Shipping and Shanghai Sino-Poland Enterprise Management Development for A$1.8 billion. The sale is expected to increase the bank's APRA CET1 capital ratio by around 40 basis points. Among other major banks, Westpac added 1.1% to A$32.95, Commonwealth Bank of Australia 0.7% to A$82.97, and National Australia Bank 1.3% to A$31.06.
Mining stocks gained on rising base metal prices. The big diversified miners such as BHP and Rio Tinto traded up by 1.6% to A$25.46 and 1.8% to A$60.98, respectively, meanwhile Fortescue added 1.2% to A$5.96.
Oil producers also met with buying pressure after the U.S. oil prices rose in the first trading hours of 2017 on Tuesday, buoyed by a deal for OPEC and non-OPEC production cuts which kicked off on Sunday. Woodside Petroleum rose 1.3% to A$31.55 and Origin Energy added 0.8% to A$6.64.
Gold stocks were among the main losers of the session, despite a strong Asian session for the precious metal, which was up 0.9% to $US1157 an ounce on its first trading day of the year. Newcrest Mining shed 0.3% to A$20.19.
Australian factory activity picked up last month on the back of improving demand and recovering commodity prices. The Australian Industry Group's PMI rose 1.2 points to 55.4 in December.
China Stocks rise on upbeat manufacturing PMI
Mainland China stock market finished up on first trading session of year, after upbeat Chinese manufacturing data bolstered investor sentiment. All main sectors advanced, with gains leading by blue-chips, especially financials. The blue-chip CSI300 index, which tracks large companies in Shanghai or Shenzhen, rose 0.97% to 3,342.23, while the Shanghai Composite Index rose 1.04% to 3,135.92 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.86% to 1,985.95. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, jumped 0.06% to close at 1,963.26 points.
The Chinese currency renminbi, or yuan, was lower against the U.S. dollar Tuesday after the People's Bank of China set a weaker fixing. The yuan was last at 6.9548 against the U.S. unit compared with the official closing price of 6.9495 last Friday. The PBOC set the yuan central weaker at 6.9498 in the first trading day of 2017, compared with a fixing of 6.9370 last Friday.
The People's Bank of China injected CNY20 billion via seven-day reverse repos and CNY20 billion via 14-day reverse repos at open-market operations Tuesday. The central bank continued to skip 28-day reverse repos. The moves resulted in a net drain of CNY155 billion for the day. The central bank drained a net CNY245 billion last week - the first removal of liquidity in three weeks. A total of CNY745 billion in outstanding reverse repos matures this week.
Hong Kong Stocks start 2017 on a high
The Hong Kong stock market closed up on the first trading day of 2017, with data showing a further expansion in Chinese manufacturing aiding sentiment. But gains in the city were capped by concern over a rising U.S. currency, which makes emerging markets less attractive. Most sectors rose, with property stocks leading the gains. Hong Kong's benchmark Hang Seng Index closed 149.84 points, or 0.68%, higher at 22,150.40. The Hang Seng China Enterprises Index, known as the H-shares index, added 64.68 points, 0.69%, to 9,459.55. Turnover decreased to HK$49.3 billion from HK$53.8 billion on Friday. The local market closed on Monday for New Year holiday.
Casino stocks retreated on Tuesday after data showing that Macau gambling revenue fell 3.3% in 2016, the third straight year of declines. Gross gaming revenues increased 8% in December from a year earlier. Galaxy Entertainment (00027) fell 1.3% to HK$33.35. Sands China (01928) softened 0.3% to HK$33.6.
CRRC, a Chinese train maker, rose 0.9% to HK$7.02 after saying late Friday that it has received approval to issue 1.4 billion shares on the domestic market in a private placement.
China Railway Construction (CRCC) added 0.8% to HK$10.06 following an announcement Friday that one of its units has signed an ecological town construction contract worth 5.1 billion yuan.
Property counters were higher after reports new home sales doubled during new-year holiday period. with Wharf (00004) jumped 4.4% to HK$53.8 after Citi Research published bullish report on landlords. Hysan Development (00014) soared 4.8% to HK$33.6.. SHKP (000016) gained 2.8% to HK$100.7. New World Development (00017) added 2.8% to HK$8.43. China Evergrande Group rose 3.5% to HK$5 after saying it will sell a stake of more than 13% in a property subsidiary to eight investors for 30 billion yuan.
Hong Kong's value of total retail sales in November, provisionally estimated at HK$36 billion, decreased by 5.5% compared with the same month in 2015, according to the Census and Statistics Department. For the first eleven months of 2016 taken together, it was provisionally estimated that the value of total retail sales decreased by 8.6% compared with the same period in 2015.
Small gains power Sensex, Nifty to 3-week closing high
Reversing its previous day's losses, the flagship Sensex staged a modest comeback to end with paltry gain, buoyed by pick-up in the infrastructure sector in November coupled with firm global cues. The overall recovery also received some support from banking stocks which recouped their previous losses after being hit by profitability fears in the wake of lending rate cuts. Core industries grew 4.9% in November 2016 on the back of healthy performance by sectors, including coal, steel and electricity, prompting investors to go in for fresh bets. The barometer index, the S&P BSE Sensex, rose 47.79 points or 0.18% to settle at 26,643.24. The Nifty 50 index rose 12.75 points or 0.16% to settle at 8,192.25.
Hero MotoCorp fell 1.44% after the company announced before market hours today, 3 January 2017 that sales fell 33.91% to 3.3 lakh units in December 2016 over December 2015. The companys manufacturing facilities at Gurgaon, Neemrana and Haridwar were closed from 26-31 December 2016 on account of annual maintenance.
Tata Motors dropped 1.23%. The company said its passenger and commercial vehicle total sales rose 2% to 40,944 units in December 2016 over December 2015. The companys domestic sales of Tata commercial and passenger vehicles rose 1% to 35,825 units in December 2016 over December 2015. Exports surged 12% to 5,119 units in December 2016 over December 2015. The sales figures were announced after market hours yesterday, 2 January 2017.
TVS Motor Company gained 3.07%. The companys sales fell 8.47% to 1.84 lakh units in December 2016 over December 2015. The announcement was made after market hours yesterday, 2 January 2017.
SML Isuzu rose 1.68% after the company said its total sales rose 16.4% to 1,021 units in December 2016 over December 2015. The sales figures were announced after market hours yesterday, 2 January 2017.
New Zealand, Japan and Thailand markets were shut for public holidays.
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