Investors' appetite for riskier assets resumed on calming capital outflows concern after Federal Reserve Chair Janet Yellen signalled a slower pace of rate increases this year, potentially keeping the cost of capital cheaper for longer. Her comments were echoed by San Francisco Fed President John Williams who indicated that the pace of rate hikes would be "gradual and thoughtful" and it is "going to take at least six years to get the balance sheet back to normal, which is in keeping with the overall approach to removing accommodation gradually".
Among Asian bourses
Australia Market closes up
Australian share market finished session marginally higher, ending a three-day losing streak, as risk sentiments buoyed by a good session on Wall Street overnight. But, gains were marginal on lingering caution over the financial sector's exposure to a slowdown in the mining industry. At close of trade, the benchmark S&P/ASX 200 rose 5.80 points, or 0.12%, to 5010.30. The broader All Ordinaries added 5.30 points, or 0.1%, to 5081.50.
Banks and financial stocks recovered some ground following steep recent losses on worried about bad debts linked to the mining sector slump after ANZ and Westpac warned about exposure to the down-turned resources industry last week. ANZ Banking Group and Westpac Banking Corp continued suffering selloff, down 0.4% to A$23.11 and down 0.1% to A$29.89. National Australia Bank rose 0.1% to A$25.64 and Commonwealth Bank of Australia grew 0.3% to A$73.31.
Shares of material and resources players were mixed. Shares in Fortescue Metals Group saw some of the strongest gains, rallying more than 1.2% to A$2.57 after UBS said the iron ore miner has the capacity to reduce gearing to below 40% by mid-2019. But, shares in BHP Billiton fell 0.5% to A$16.62 and Rio Tinto sank 0.4% to A$41.99. Oil and gas producer Woodside Petroleum fell 2.6% to A$25.96 and Origin Energy was 1.4% off at A$4.94.
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Nikkei ends 1.3% lower
Japan share market stumbled, dragged down by the yen's appreciation against the U.S. dollar after U.S. Federal Reserve Chair Janet Yellen's dovish remarks on the pace of rate hikes. A sharp drop in Japan's monthly factory output also dented sentiment. All industry categories on the main section closed in negative territory, with marine transportation, bank, and nonferrous metal-linked stocks comprising notable decliners. The 225-issue Nikkei Stock Average ended down 224.57 points, or 1.31%, at 16,878.96. The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, finished 21.31 points, or 1.55%, lower at 1,356.29.
Automaker-linked stocks were pressured by Takata daily limit loss of 20% to 414 yen, after reports that the struggling airbag supplier's costs related to a recall of potentially fatal airbag inflators cost the Japanese manufacturer $24 billion. Toyota fell 1.20% to 6,080 yen, Nissan was down 1.66% at 1,062 yen and Sony slipped 0.47% to 2,929.5 yen.
Financials were pressured by sharp drop in Japan's monthly factory output.Industrial production in February tumbled 6.2% from the previous month, the sharpest drop since the aftermath of the 2011 earthquake and tsunami disaster. The slump in industrial output in February suggests that manufacturing activity will contract this quarter. Banking giant Mitsubishi UFJ slumped 1.87% to 522.9 yen while rival Sumitomo Mitsui Financial Group was 1.49% off at 3,419 yen.
China Market rebounds
Mainland China stock market surged, as risk appetite buying revived after comments by the Federal Reserve chair and as Bank of Communications Co. and China Petroleum & Chemical Corp. posted better-than-expected earnings. The benchmark Shanghai Composite Index surged 80.81 points, or 2.77%, to 3000.65. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 80.81 points, or 2.58%, to 3216.28.
Appetite for riskier assets revived on calming concern about capital outflows after Federal Reserve Chair Janet Yellen signalled a slower pace of rate increases this year, potentially keeping the cost of capital cheaper for longer.
Shares of technology, energy and material companies advanced the most among 10 industry groups. China Petroleum & Chemical Corp surged 4.2% after reporting net income of 32.4 billion yuan. PetroChina Co. advanced 2.5%. Anhui Conch Cement Co. led gains for material shares, rallying 6%. Han's Laser Technology Industry Group Co. jumped 7.8%.
Banks and financials were also stronger. Bank of Communications Co climbed 2.2% after the lender posted an unexpected profit. China's fifth-largest lender reported net income rose 1.4% to 14.5 billion yuan ($2.2 billion) in the final quarter of 2015, exceeding the 13.4 billion yuan average estimate. Industrial & Commercial Bank of China and China Construction Bank Corp. rose at least 1.7%
Hong Kong Stocks surge 2.15%
The Hong Kong stock market closed sharp higher, joining rally on Mainland A-share bourses and other regional markets after U.S. Federal Reserve remarks hosed down expectations of imminent interest rate hikes. The benchmark Hang Seng Index surged 437.09 points, or 2.15%, to 20803.39 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 252.48 points, or 2.89%, to 8979.41 points. Turnover increased to HK$75.2 billion from HK$60 billion on Tuesday.
Mengniu Dairy (02319) soared 11% to HK$12.12 after the company bought back 1.84 million of its own shares yesterday. It was the top blue-chip winner. Meanwhile, Belle (01880) plunged 6% to HK$4.39 on a profit warning, mainly dragged by weak performance of footwear business. It was the worst performing blue chip today.
Sinopec (00386) said its 2015 net profit declined 30% to RMB32.44 billion, but still better than market expectations. It surged 6% to HK$4.99. PetroChina (00857) put on 3% to HK$5.14. CNOOC (00883) rose 1% to HK$9.07.
Sensex, Nifty attain 12-week closing high
Metal, banking and capital goods stocks led a rally on the domestic bourses triggered by expectations that US interest rates will not be raised quickly, with the barometer index, the S&P BSE Sensex, surpassing the psychologically important 25,000 mark. The Sensex jumped 438.12 points or 1.76% to settle at 25,338.58. The 50-unit Nifty 50 index rose 138.20 points or 1.82% to settle at 7,735.20.
Bank stocks edged higher after the Reserve Bank of India (RBI) clarified some of the provisions relating to the Marginal Cost of Funds based Lending Rate (MCLR) system, which comes into effect from 1 April 2016. Bharat Heavy Electricals (Bhel) edged higher after the company announced successful commissioning of a 250 megawatts (MW) coal-based thermal power plant (TPP) in Bihar. Steel stocks gained on reports that the government has extended safeguard import taxes on some steel products until March 2018 to curb imports of cheap Chinese steel and shield domestic mills. Tata Steel surged after the company announced that it has decided to explore all options for portfolio restructuring including the potential divestment of its UK subsidiary Tata Steel UK, in whole or in parts. Shares of HealthCare Global Enterprises (HGEL), a provider of speciality healthcare in India, slumped on its debut.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 grew 0.6% to 6714.16. Taiwan's Taiex index rose 1.4% to 8737.04. South Korea's KOPSI jumped 0.4% to 2002.14. Malaysia's KLCI added 0.2% to 1717.82. Singapore's Straits Times index added 1.9% to 2872.78. Indonesia's Jakarta Composite index rose 0.7% to 4816.65.
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