Asia Pacific share market mostly advanced on Thursday, 11 June 2015, as risk sentiments propelled by following a strong lead from Wall Street overnight, upbeat china economic data, and optimism Greece will reach a deal with creditors. However, gains across the region were limited as investors awaiting the outcome of the U.S. Federal Open Market Committee's June 16-17 summit for cues on the timing of a rate increase after last Friday's strong jobs report.
Investors' fears over Greece debts crisis relaxed somewhat amid reports suggesting Greece was inching closer to a deal with its creditors. The leaders of Germany, France and Greece agreed to continue talks on Athens's hamstrung bailout program with high intensity. The three European leaders said they had agreed to work harder for a deal to unlock cash needed by Athens to pay its debts and avoid a default and possible exit from the eurozone.
Meanwhile, Standard & Poor's Ratings Services has downgraded Greece's credit rating to triple-C, reflecting its view that the government will likely default on its commercial debt within the next 12 months, without an agreement with its creditors. S&P has a negative outlook for the rating, which was cut one notch. Triple-C is a highly speculative rating on S&P's scale.
The data from China Statistics department showed that China's industrial output accelerated to 6.1% in May from a year earlier, accelerating from 5.9% growth in April. Retail sales added 10.1% in May from a year earlier, accelerating slightly from a 10% increase in April. Fixed-asset investment excluding rural households climbed 11.4% from a year earlier in the January-May period, compared with an increase of 12.0% for the first four months of the year.
South Korea's central bank today cut its benchmark interest rate to a record low of 1.5% to support the economy, which faces a potential fresh blow from a deadly viral outbreak. The Bank of Korea's 25 basis point cut, the second this year, comes amid concerns that an outbreak of Middle East Respiratory Syndrome (MERS) may knock billions of dollars off economic output as consumers and foreign tourists worried about infection stay home.
The Reserve Bank of New Zealand cut down rates to 3.25%, joining the global rate-cutting club and said it would ease again if needed.
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Among Asian bourses
Japan stocks up 1.68%
Japanese share market advanced today on the back of strong overnight advance for U.S. shares and yen depreciation against the greenback. The Nikkei Stock Average advanced 336.61 points, or 1.68%, to end at 20382.97. The Topix index of all Tokyo Stock Exchange First Section issues jumped 1.27%, or 20.65 points, to close at 1648..88.
Shares of export-related companies were stronger as the yen backed to mid-123 level against the dollar after yesterday's drop of almost two full yen on Kuroda remarks. The yen fell 0.5% to 123.28 per dollar after jumping 1.4% Wednesday as Bank of Japan Governor Haruhiko Kuroda said it was hard to see further losses in the currency. A weak yen is positive for Japanese exporters as it makes them more competitive abroad and inflates profits when repatriated. Among blue-chip exporters- Sony Corp advanced 2.9% to 3759.50 yen, Casio Computer Co 2% to 2347 yen, Fujitsu 1.8% to 712.40 yen, and Konica Minolta Inc 1.3% to 1527 yen. Honda Motor Co rose 0.7% to 4152.50 yen and Nissan Motor Co 0.4% to 1260 yen.
Insurer Tokio Marine Holdings Inc declined 0.5% to 4883 yen after the insurer said on Wednesday that it has agreed to buy U.S. insurance company HCC for about $7.5 billion. Tokio Marine, a nonlife insurer, said in a statement that its takeover offer of $78 cash per share is a 35.8% premium to HCC's average share price over the past month. Tokio Marine said the acquisition will strengthen its operations in the U.S., which is the largest insurance market in the world. HCC Insurance Holdings Inc. has property, accident, medical and other specialty insurance businesses.
Australia market surges 1.4%
The Australian share market posted a solid gain, as investors chased for recently oversold stocks, on tracking positive lead from Wall Street overnight, solid jobs growth, and firmer commodity prices. Most of the ASX sectors advanced, with shares of top-weighted miners, oil & coal players, lenders and realty developers being major gainers of the day. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both added 1.4% to close at 5556.70 and 5562.60 points, respectively. Market turnover was relatively strong, with 1.81 billion shares changing hands worth of A$4.5 billion.
The Australian Bureau of Statistics (ABS) said today that domestic Unemployment rate decreased to 6% in May 2015 (seasonally adjusted) from 6.1% in April 2015. The seasonally adjusted labour force participation rate was unchanged at 64.7% in May 2015 from a revised April estimate.
Materials and resources stocks advanced on tracking rebound in iron ore prices. The bulk commodity added 1.7% to $65.39 a tonne on Wednesday, its highest since January. BHP Billiton rose 2.1% to A$28.23 and Rio Tinto 2.5% to A$57.48. Iron ore producer Fortescue Metals Group increased 6.4% to A$2.48 and Arrium 3.2% to A$0.16. BlueScope Steel jumped 3.2% to A$3.21 amid talk it may close its last remaining blast furnace at Australia's Port Kembla to save costs and focus more on downstream operations.
Oil-related players also advanced after an overnight rise in oil prices. Brent crude oil lifted 1.3% to $US65.70 a barrel. Oil Search closed up 4.4% at A$7.76, Woodside Petroleum was up 1.74% to A$36.85 and Santos up 2.5% to close at A$8.27.
Shares of Ramsay Health Care 3.3% to A$61.24 after the company reaffirmed its fiscal-year profit outlook and said it planned to expand its businesses.
China stocks gains on upbeat economic data, govt support measures
Mainland China share market closed higher for the first time in three days, after latest batch of economic data signaled the nation's economy may be stabilizing. Also, buying spree was inspired by the latest measures taken by Beijing to bolster a slowing economy. The benchmark Shanghai Composite Index grew 15.56 points, or 0.3%, to 5121.59.
The National Bureau of Statistics said on Thursday that China's Industrial output accelerated to 6.1% in May from a year earlier, accelerating from 5.9% growth in April. Retail sales added 10.1% in May from a year earlier, accelerating slightly from a 10% increase in April. Fixed-asset investment excluding rural households climbed 11.4% from a year earlier in the January-May period, compared with an increase of 12.0% for the first four months of the year.
Separately, National Bureau of Statistics data showed China's housing sales in the first five months of the year (January to May) rose 5.1% year-over-year to 2.07 trillion yuan, a reversal from the 2.2% decline recorded in the first four months. In May alone, housing sales rose 30% from a year earlier, as lower borrowing costs and relaxed mortgage requirements lured home buyers back into the market.
Late on Wednesday, China's state council, or cabinet, encouraged local governments to maximise spending this year or face cuts to their 2016 budgets. The cabinet also vowed to liberalise the consumer credit market, and support cross-border e-commerce. Separately, China's finance ministry said it has approved a second batch of local government debt swaps worth 1 trillion yuan ($161.2 billion), doubling the size of the existing swap program announced in March.
Shares of technology, drug and consumer-staples producers climbed the most among 10 industry groups in Beijing. Financial software developer Hundsun Technologies Inc. surged 5.8%. Harbin Pharmaceutical rallied by the 10% daily limit. Bright Dairy & Food Co. jumped 10%, surging for a third day after China International Capital Corp. upgraded the stock to a strong buy.
Hong Kong market rises as MERS fears ease
The Hong Kong stock market finished the session higher on Thursday, 11 June 2015, in line with a regional rally and following a strong lead from Wall Street overnight. Meanwhile, momentum was also supported by easing fears of the Middle East Respiratory Syndrome (MERS) outbreak after Controller of the Center for Health Protection Leung Ting-hung told a press briefing Thursday morning that no confirmed case of MERS has been found in Hong Kong so far. The Hang Seng Index advanced 220.21 points or 0.83% to finish at 26907.85, off an intra-day high of 26839.43 and day low of 26991.51. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 126.58 points, or 0.93%, to 13743.25 points. Turnover reduced to HK$124.30 billion from HK$144.13 billion on Wednesday.
Telecom stocks advanced on reports that three Chinese telecom carriers have yet to materialise their proposed plans on lower telecom charges. China Mobile (00941) put on 2.4% to HK$100.1. China Telecom (00728) rose 1.8% to HK$4.97. China Unicom (00762) inched up 0.2% to HK$12.78.
Lenders were mostly higher on tracking overnight gains for U.S. and European peers. HSBC Holdings rose 0.4% to HK$73.15 and Bank of Communications Co 1% to HK$8.14. Standard Chartered rose 1.4% to HK$127.80 after report cited an internal memo about StanChart's intention to strengthen its financial position. China Construction Bank Corp jumped 0.7% to HK$7.68 on reports the lender would become the first to issue large certificates of deposit Monday under a new regulatory program.
Casino stocks declined after Macau government official reiterated Macau's casino tables will maintain 3% growth p.a. over the coming ten years. Galaxy Ent (00027) dipped 1.4% to HK$32.95. Sands China (01928) slipped 1.2% to HK$28.85. Melco Crown (06883) edged up 0.7% to HK$51.15.
Airline carrier stocks pulled back on concerns fatal MERS illness will reduce travel demand. China Southern Airlines Co declined 1.2% to HK$8.16, China Eastern Airlines Corp 3% to HK$6.09, and Cathay Pacific Airways 0.3% to HK$18.56.
Nifty settles below 8000 level
Indian market settled steep lower, amid heavy selling among heavyweight shares like Reliance Inds, financials and auto shares. Sentiment was hit by monsoon making marginal progress and caution ahead of macro data IIP for April and CPI for May. As per provisional closing, the S&P BSE Sensex was down 480.12 points or 1.79% at 26,360.38. The CNX Nifty was down 159.30 points or 1.96% at 7,965.15.
Nervousness was seen in the markets because of the delay in monsoon arrival. Investors are worried that a delayed rainfall could hurt growth and push up inflation.
Banking shares were the worst hit, as bank recapitalisation is taking time, and with rising sticky loans the market is worried that NPA levels could flare up. Among PSU bank stocks, State Bank of India (SBI) (down 2.33%), Punjab National Bank (down 3.67%), Bank of Baroda (down 4.03%), Canara Bank (down 0.2%), Bank of India (down 2.52%) and Union Bank of India (down 4.79%) dropped. Among private bank stocks, HDFC Bank (down 1.77%), Kotak Mahindra Bank (down 4.72%), ICICI Bank (down 1.28%), IndusInd Bank (down 2.83%) and Yes Bank (down 3.53%) declined.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.4% to 9302.49. South Korea's KOSPI added 0.3% to 2056.61. New Zealand's NZX50 gained 0.9% to 5858.41. Singapore's Straits Times index jumped 0.7% at 3347.67. Malaysia's KLCI dropped 0.1% to 1734.76. Indonesia's Jakarta Composite index decreased 0.1% to 4928.81.
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