Activity in China's service sector strengthened last month, according to the Caixin/Markit services purchasing managers' index (PMI), which in March rose to 52.2 from February's 51.2. March's moderate expansion in the service sector, which follows rises in January-February industrial profits and PMI, lends support to belief that China's economy is improving on the back of Beijing's supportive measures. Also, latest data shows that China's outstanding margin loans at the end of March rose from a month earlier, ending a three-month losing streak and signalling that mainland investors are starting to borrow more to buy stocks.
The global economy's already modest prospects will decline further unless authorities take stronger action to boost growth, the head of the IMF warned on Tuesday, saying the Fund would cut its headline forecasts next week. Christine Lagarde said China's shift to an economic model based more on domestic demand, stubbornly low commodity prices and tighter funding conditions in some countries had all clouded the outlook. The recovery from the 2007-2009 global financial crisis remains too slow, too fragile and risks to its durability are increasing. But if policymakers confronted the challenges and acted together, the positive effects on global confidence -- and the global economy -- will be substantial. Lagarde advised the United States to raise its minimum wage, Europe to improve job training and emerging economies to cut fuel subsidies and boost social spending. She gave her strongest hint yet that the IMF will cut its global economic forecasts next week. The global outlook has weakened further over the last six months so you can (deduce) from that there will be a slight revision (in the IMF estimates), Lagarde said. Lagarde's remarks come less than two weeks before ministers, central bankers and other policymakers from the Fund's 188 member countries gather in Washington to assess the health of the world economy at the IMF and World Bank Spring Meetings.
Market participants keep warming up for the minutes from the Federal Reserve's March policy meeting. They are likely to offer more details regarding Fed's interest rate and economic projections.
Among Asian bourses
Australia Market ends softer
Australian share market ended higher on the back of strength in energy sector which helped to offset persistent weakness in bank stocks. At close of trade, the benchmark S&P/ASX 200 advanced 21.50 points, or 0.44%, to 4945.90. The broader All Ordinaries added 24.20 points, or 0.48%, to 5024.60.
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Shares banks and financials continued downtrend, with Westpac leading losses, down 1.5% to A$28.68, after Australia's securities regulator started legal action against it for allegedly fixing the bank bill swap reference rate (BBSW), an allegation the bank rejected. Meanwhile, National Australia Bank was down 0.2% to A$25.50 and Commonwealth Bank 0.1% to A$71.15. ANZ Bank was up 0.4% at A$22.55.
Shares of energy companies advanced for the second consecutive session after the EIA's weekly report showed crude oil inventories have decreased by more than 4.9 million barrels during the last week, more than initially estimated. The likeliness of an agreement between OPEC and non-OPEC countries at the meeting in Doha in order to freeze the oil output, plus a now softer tone in the greenback has also collaborated with the upside. Oil & gas explorer Oil Search rose 5.3% to A$6.37, Santos 3.9% to A$3.69, Origin Energy 1.5% to A$4.64, and Woodside Petroleum 2.8% to A$24.62.
Nikkei falls for 7th day
Japan share market ended down after erasing earlier gain, as sentiments turning to risk-off on concern about the global economy after the head of the International Monetary Fund sounded downbeat on the outlook for the world economy. Sentiments also hammered after the Japanese prime minister struck a cautious note about government intervention aimed at stemming the yen's rise. Notable decliners at the close of play comprised warehousing and harbour transport services, insurance, fishery, and agriculture and forestry-linked stocks. The 225-issue Nikkei Stock Average ended down 17.46 points, or 0.11%, at 15715.36. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 0.62 points, or 0.05%, lower at 1267.75.
Drug companies were mostly lower after Pfizer Inc. decided to terminate its $160 billion merger with Allergan Plc, according to a person familiar with the matter. Astellas Pharma Inc. and Daiichi Sankyo Co. each lost 1.2%.
Shares of utilities players closed stronger, led by Kyushu Electric, up 7.2% after the Fukuoka High Court on the southern island of Kyushu rejected an appeal by local residents to shut down the No. 1 and No. 2 reactors at the company's Sendai plant. Other firms with shuttered nuclear reactors also soared. Kansai Electric surged 3.5%, while Shikoku Electric jumped 4% and Hokkaido Electric rocketed 6.9%. Wednesday's ruling will be welcome news for Prime Minister Shinzo Abe who wants to bring atomic power back into Japan's energy mix after the 2011 Fukushima disaster led to shutdown of dozens of reactors across the country. The plan has been met with fierce resistance by a public wary of nuclear power and efforts to turn on several reactors have turned into court battles.
Steelmakers were also ended stronger, with. Kobe Steel rising 2.2% after announcing a four-year business plan that included a dividend payout ratio target of between 15% and 25%. Rival JFE Holdings Inc. climbed 1.8%.
Japanese yen appreciated against the greenback and most of its major counterparts, as heightened concerns of a global economic slowdown, after the head of the International Monetary Fund sounded downbeat on the outlook for the world economy. Investors were also looking ahead to minutes from the Federal Reserve's March policy meeting. They are likely to offer more details regarding Fed's interest rate and economic projections. The yen's surge came on the back of comments made by Chief Cabinet Secretary Yoshihide Suga that the government would be watching the foreign exchange markets with a sense of urgency.The comments were received negatively as the market lacks confidence that the Bank of Japan has any policy measures in its arsenal to prevent the double whammy of increased risk aversion and US dollar weakness.
China Market closes softer
Mainland China stock market ended lower on Wednesday, snapping four days of winning streak, with confidence over signs of renewed expansion of China's services sector tempered by a fall in services employment in the world's second-biggest economy. The benchmark Shanghai Composite Index declined 2.47 points, or 0.08%, to 3050.59. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, declined 6.96 points, or 0.21%, to 3257.53.
The Caixin services purchasing managers' index (PMI) for March rose to 52.2 from February's 51.2, according to the Caixin/Markit. March's moderate expansion in the service sector, which follows rises in January-February industrial profits and PMI, lends support to belief that China's economy is improving on the back of Beijing's supportive measures. But despite the slight boost to business activity, services companies took a cautious approach to staff numbers, highlighted in March by the first fall in services sector employment since August 2013, said Caixin.
Shares of of financial companies declined the most among 10 industry groups. China Minsheng Banking Corp. declined 1.8%. ICBC retreated 0.7%. China Life Insurance slumped 1%.
Kweichow Moutai jumped 4.8%, after Morgan Stanley named the biggest Chinese liquor maker as one of 13 stocks that will be able to withstand lingering deflation because of its pricing power. Its rival Wuliangye Yibin Co. also climbed 1.8%.
Hong Kong Stocks rise 0.15%
The Hong Kong stock market closed higher, as investors risk sentiments boosted ups after the latest survey on the China's service sector activity provided fresh evidence of a nascent economic recovery. The benchmark Hang Seng Index advanced 29.67 points, or 0.15%, to 20206.67 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, declined 10.41 points, or 0.12%, to 8668.63 points. Turnover reduced to HK$58.3 billion from HK$70.7 billion on Tuesday.
HSBC (00005) dipped 1.7% to HK$45.95, hitting a four-year low of HK$45.7 at one point. It was the worst performing blue chip today. Morgan Stanley rated the global bank at HK$28 at its bear-case scenario.
Bank of East Asia (00023) jumped 1.6% to HK$28.65. The local bank will vote a number of controversial resolutions on Friday, including the re-election of chairman and directors.
PCCW (00008) gained 2% to HK$5.11. Its Viu TV started broadcasting today. HKTV (01137) soared yesterday and suspended trading today pending verdict from court, which allowed the appeal from the Executive Council for refusing to issue free-to-air broadcast license to HKTV.
The APEC Studies Programme of the Hong Kong Institute of Economics and Business Strategy at the University of Hong Kong (HKU) released its quarterly Hong Kong Macroeconomic Forecast today. According to its High Frequency Macroeconomic Forecast, real GDP is estimated to grow by 2.0% in 4Q 2015, when compared with the same period in 2014. It is estimated to growth by 2.4% for the year of 2015 as a whole. In 1Q 2016, real GDP growth is forecast to be 1.8% when compared with the same period last year. It expects Hong Kong GDP is likely to grow below 2.0% in the year of 2016, slower than 2015.
Sensex registers tiny gain
Indian stock market registered small gain as strength for metal, auto and telecom stocks offset losses for stocks of public sector banks and index heavyweight Infosys. The barometer index, the S&P BSE Sensex, rose 17.04 points or 0.07% to settle at 24,900.63. The Nifty 50 index rose 11.15 points or 0.15% to settle at 7,614.35.
Metal and mining stocks edged higher after the outcome of a monthly survey showed acceleration in growth in China's services sector last month. Tata Steel surged on media reports that the British government has initiated talks with potential buyers for the company's UK operations. Tata Motors edged higher after the company announced the commercial launch of its new hatchback Tiago. Shares of diversified state-run firm Andrew Yule & Company (AYCL) surged after the Cabinet Committee on Economic Affairs (CCEA) cleared a proposed for conversion of the working capital term loan (WCTL) amounting to Rs 29.91 crore from Bank of Baroda (BoB) into equity.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 added 0.3% to 6734.27. Taiwan's Taiex index sank 1.7% to 8513.30. South Korea's KOPSI rose 0.4% to 1971.32. Malaysia's KLCI eased 0.06% to 1717.01. Singapore's Straits Times index added 0.4% to 2811.25. Indonesia's Jakarta Composite index rose 0.2% to 4868.23.
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