Stocks got off to a firmer start after European and U.S. equities staged a powerful rally Monday, inspired by centrist Emmanuel Macron's lead in the first round of the closely watched French presidential election Sunday. Macron is known as a pro-European Union candidate. The first round of France's presidential election raised expectations that the European Union will hold together. Emmanuel Macron, a candidate investors see as pro-business, won the most votes and is seen likely to beat Marine Le Pen, the remaining, anti-EU candidate in the May 7 runoff.
With one of the year's major risks to markets seen less acute, markets were also looking ahead to other factors, including US President Donald Trump's promise to announce on Wednesday a big tax reform and tax reduction. The Wall Street Journal reported Trump wanted to cut the corporate tax rate to 15%. The White House budget director told Fox News on Monday Trump's announcement would focus on principles, ideas and rates.
Among Asian bourses
Nikkei retakes 19K on global lead, weaker yen
The Japan share market finished higher, as investor sentiment was bolstered by rallies on U.S. and European bourses, yen depreciation near the 110-level against greenback, and the outcome of France's vote on Sunday. The 225-issue Nikkei Stock Average added 203.45 points, or 1.08%, to close the day at 19,079.33. The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 16.02 points, or 1.07%, to finish at 1,519.21. Rising stocks outnumbered declining ones on the Tokyo Stock Exchange by 2492 to 589 and 271 ended unchanged. The Nikkei Volatility, which measures the implied volatility of Nikkei 225 options, was down 16.96% to 16.79 a new 1-month low.
Yamato Holdings attracted purchases on news reports that parcel delivery subsidiary Yamato Transport will raise its basic delivery fees by 5 to 20% as early as September. Mega-banks Mitsubishi UFJ and Mizuho, insurers Dai-ichi Life and Tokio Marine, and brokerage firm Nomura were upbeat after their U.S. peers fared well on Wall Street. Other major winners included automakers Toyota, Honda and Nissan as well as industrial materials maker Showa Denko.
Also Read
By contrast, mobile phone carrier NTT Docomo met with selling following a media report about a weaker than expected estimate of its consolidated operating profits for the year through March 2018. Also on the minus side were Oriental Land, the operator of Tokyo Disneyland and Tokyo DisneySea, and furniture retailer Nitori Holdings.
ECONOMY: The Service Producer Price Index with a 2010 base year was released on Tuesday by the Bank of Japan, showing Japan's service producer prices rose 0.8% on year in March, after a 0.8% gain in February. Business service prices have shown modest gains in a range of +0.1% to +0.8% y/y in the past year, reflecting a gradual pickup in domestic demand and continued labor shortages. On the month, the SPPI rose 0.6% in March, the second consecutive rise after a 0.3% rise in February. In fiscal 2016 that ended on March 31, the index rose 0.4% on year, the fourth straight annual rise after +0.4% in fiscal 2015.
China Pension funds lift shares
The Mainland China equity market closed higher, following the previous session's sharp sell-off and news that pension funds have started buying stocks. Most sectors gained, with consumer stocks outperforming the broader market as investors rotating out of growth shares into defensive plays. The blue-chip CSI300 index rose 0.3%, to 3,440.97 points, while the Shanghai Composite Index gained 0.2% to 3,134.57 points.
The Ministry of Human Resources and Social Security said yesterday that 137 billion yuan (US$20 billion) of pension funds have begun to invest in the stock market.
Shares of consumer linked companies advanced, as investors sought defensive plays amid bearish trends elsewhere in the market. Kweichow Moutai Co jumped 5.1% to 418.89 yuan after the liquor maker reported first-quarter net profit grew 25.2% year on year to 6.1 billion yuan.
Shares related to Xiongan New Area rose, with Langfang Development Co surging by the daily limit of 10% to 19.58 yuan.
INDUSTRY NEWS: China's installed wind power capacity continued to grow in the first quarter of this year, according to the National Energy Administration. China had 151 million kilowatts of installed wind power capacity at the end of the first quarter, up 13% year on year. Qinghai, Shaanxi, Henan and Hebei provinces increased the most in wind power capacity during the first three months, the NEA said in a statement. Wind power facilities generated 68.7 billion kilowatt-hours of electricity in the first quarter, 26% more than in the same period of 2016.
Hong Kong Stocks tracks French election rally
The Hong Kong stock market closed higher, joining a region-wide rebound, sparked by the outcome of France's vote Sunday. All main sectors in Hong Kong rose, with financials and technology stocks among the biggest gainers. The Hang Seng index rose 1.3 percent, to 24,455.94, while the China Enterprises Index gained 1.6 percent, to 10,272.07 points. Turnover increased to HK$76.9 billion from HK$65.5 billion on Monday.
The northbound quota balance of the "Shanghai-HK Connect" program was RMB12.2 billion, accounting for 93.8% of the daily allowed quota of RMB13 billion. The southbound quota balance was RMB8.563 billion, accounting for 81.6% of the daily allowed quota of RMB10.5 billion. As for the Shenzhen-HK Connect, the northbound quota balance was RMB12.208 billion, accounting for 93.9% of the daily allowed quota of RMB13 billion. The southbound quota balance was RMB10.186 billion, accounting for 97% of the daily allowed quota of RMB10.5 billion.
Tencent (00700) added 2% to HK$242.8 after hitting a all-time high of HK$241.2, boosted by the record close of the NASDAQ. IGG (00799) soared 11% to HK$11.78. ICBC (01398) put on 2.2% to HK$5.1. CCB (00939) gained 1.9% to HK$6.35. China Life (02628) climbed 2% to HK$23.45.
Chongqing Iron & Steel (01053) dived 16.2% to HK$1.14 after the company said its creditor has filed an application court seeking reorganisation of Chongqing Iron.
Short-seller Glaucus Research published a 52-page report saying Fullshare Holdings' (00607) share price has been manipulated. The company requested a trading halt. Its shares plunged 11.9% to HK$2.52 before suspension.
Fullshare's 26.82%-ownded Applied Development (00519) also plunged 12% to HK$0.58. China Huarong (02799), which holds stake in Fullshare, pounded 9.3% to HK$3.04.
ECONOMY: Hong Kong's value of total exports of goods (comprising re-exports and domestic exports) rose 16.9% in March over a year earlier to HK$321.9 billion, after a year-on-year increase of 18.2% in February, according to the Census and Statistics Department. Within this total, the value of re-exports grew 16.9% to HK$317.7 billion in March, while the value of domestic exports picked up 16.8% to HK$4.2 billion.
B>Nifty settles at record high
Key benchmark indices logged strong gains in sync with upbeat global equities after centrist candidate Emmanuel Macron won the first round of the French presidential election on Sunday, 23 April 2017. The barometer index, the S&P BSE Sensex, jumped 287.40 points or 0.97% to settle at 29,943.24. The Nifty 50 index surged 88.65 points or 0.96% to settle at 9,306.60.
Today's gains were led by index heavyweights ITC, HDFC and Reliance Industries (RIL). Key indices gained for the second day in a row today, 25 April 2017. All the nineteen sectoral indices on BSE edged higher.
Index heavyweight Reliance Industries (RIL) gained 1.14% to Rs 1,432.50 after consolidated net profit excluding exceptional items rose 16.6% to Rs 8046 crore on 45.2% growth in turnover to Rs 92889 crore in Q4 March 2017 over Q4 March 2016.
IndusInd Bank rose 1.48%. The bank's announced that it inaugurated its third branch in Jamshedpur. Expanding presence across Jharkhand, IndusInd Bank recently inaugurated its third branch in Jamshedpur, the first planned industrial city of India. The branch is located at Mango, Jamshedpur. With the inauguration of this branch, the bank now has 19 branches in the state of Jharkhand. The announcement was made after market hours yesterday, 24 April 2017.
Auto major Mahindra & Mahindra advanced 3.4% to Rs 1,307.50 on reports that a foreign brokerage has upgraded the stock to outperform from neutral with increased target price at Rs 1,500 from Rs 1,390 earlier. The brokerage house cited potential for M&M's tractor business that will surprise positively going ahead. Reports suggested that the brokerage believes with number of state governments planning to introduce farm loan waivers, tractor demand could get further boost. The brokerage added that weakness in utility vehicle market already factored in by M&M.
IT major Infosys rose 0.32% to Rs 929 after the company announced that it is strengthening its engineering footprint in Eastern Europe by opening its first office and delivery center in Karlovac, Croatia. The announcement was made after market hours yesterday, 24 April 2017.
Australia and New Zealand equity market closed for Anzac Day
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content