Asia Pacific stock market advanced on Tuesday, 19 January 2016, on the back of bottom fishing after slowing growth in China raised hopes for further stimulus for the world's second-largest economy. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2% after earlier touching its lowest level since October 2011.
The lack of negative surprises from offshore market overnight offered the regional market a slight reprieve following a tumultuous start to 2016 as concerns about China's economic health weighed heavily on global growth prospects. In Europe, The FTSE 100 index closed down 0.4% at 5,779.92 points. In Paris, the CAC 40 index closed down 0.5% and in Frankfurt the DAX 30 ended down 0.3%. US markets were closed on Monday for Martin Luther King Day.
Data from the National Bureau of Statistics (NBS) showed on Tuesday that China's GDP rose 6.8% in the fourth quarter ended December 2015 from a year earlier. The economy expanded 6.9% in 2015, the weakest full-year pace since 1990, versus the government's target for about 7% and down from 7.3% in 2014. Separate monthly data released on Tuesday offered no sign that China's slowdown was bottoming out. In December, industrial production rose 5.9% from a year ago, compared with the November's 6.2%. Retail sales increased 11.1% and investment rose 10% all of which were slightly below economists' forecasts.
Chinese growth has fallen steadily during the past five years as the ruling Communist Party tries to steer away from a worn-out model based on investment and trade toward self-sustaining growth driven by domestic consumption and services. But the unexpectedly sharp decline during the past two years prompted fears of a politically dangerous spike in job losses.
The softer than expected Chinese economic data reinforced fueled expectations for stimulus. Market expert expects the government may further ease monetary policy such as cutting interest rates or lenders' reserve-requirement ratios.
Brent crude was up 0.9% at $28.81 a barrel, pulling away from a 13-year low of $27.67 hit on Monday on worries about the return of additional Iranian crude to an already oversupplied market. International sanctions on Tehran were lifted over the weekend, removing an obstacle to one of the world's biggest oil producing nations.
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A number of headwinds have caused oil prices to collapse in recent months, including Chinese economic weakness, a global oil supply glut and stronger US dollar. In the meantime, Iran is set to significantly raise its oil output now that sanctions have been lifted. Iran's oil ministry issued an order to increase production by 500,000 barrels a day.
Among Asian bourses
Australia Stocks climb on bargain buying
Australian share market ended higher, as investors chased for bottom fishing after weaker-than-estimated Chinese economic data reinforced prospects for increased stimulus. At the close, the benchmark S&P/ASX 200 index advanced 44.40 points, or 0.91%, to 4903.10 points, while the broader All Ordinaries index added 43.30 points, or 0.88%, to 4955.10 points.
Shares of materials and resources recovered, with iron-ore miners leading rally after iron ore prices enjoyed a solid session overnight, surging 4.1% to $41.90 a tonne and extending its winning streak to three days in the process amid talk of a temporary curbing of Brazilian supplies. Among major miners, BHP Billiton grew 0.7% to A$14.73 while iron ore miner Fortescue Metals fell 1.6% to A$1.53. Rio Tinto rose 0.3% to A$38.82 after the miner reported an 11% rise in annual iron ore shipments that was roughly in line with its guidance. It also said it planned to increase iron ore production and shipment in 2016.
Financial stocks were up, with top four lenders being major gainers. Commonwealth Bank of Australia lifted up 1% to A$79.19, Westpac Banking Corp 1.3% to A$31.18, National Australia Bank 1.3% to A$27.03, and Australia & New Zealand Banking Group 0.7% to A$24.59.
Nikkei rises 0.55%
Japan share market ended higher after fluctuating between gains and losses, as a slew of Chinese data offered no nasty surprises, even as it confirmed that growth in Asia's economic giant had slowed to a pace not seen since the global financial crisis. Total 20 out of 33 TOPIX sectors recorded gains, with Iron & Steel, Marine Transportation, Electric Appliances, Nonferrous Metals, and Securities & Commodities Futures issues being major gainers. The 225-issue Nikkei Stock Average ended 92.80 points, or 0.55%, up at 17048.37. The Topix index of all Tokyo Stock Exchange First Section issues added 2.48 points, or 0.18%, to 1390.41.
Shin-Etsu Chemical Co. sank 2.3% after Macquarie Group cut its rating on the stock. Nintendo Co. jumped 9.1% after Macquarie raised its rating on video-game maker. Sharp Corp. added 2.4% after a report that Innovation Network Corp. of Japan may raise its investment offer for the struggling electronics company.
China Market surges on hopes for new stimulus
Mainland China stock market advanced on reinforcing speculation of more stimulus measures from Beijing after the release of weaker than anticipated domestic economic growth data. The Shanghai Composite Index surged 3.22%, or 93.90 points, to close at 3007.74. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, rose 92.40 points, or 2.95%, to 3223.13. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 3.57%, or 65.42 points, to close at 1895.75. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, rose 3.07%, or 66.76 points, to close at 2241.70.
Shares of China Railway Group and Power Construction Corp. of China jumped by the 10% daily limit on hope China will strike economic deals in the Middle East. Chinese President Xi Jinping departed Tuesday for the Middle East, with stops planned in Saudi Arabia, Egypt and Iran. That boosted hopes among investors that China will hold more political and economic influence in that region. China is planning a One Belt, One Road strategy, in which it plans to lay networks of infrastructure to better connect its economy with the rest of Asia, Africa, the Middle East and Europe.
Large state-owned enterprises also rose sharply on hopes of more mergers and acquisitions aimed at making them more efficient.
Hong Kong Market climbs
The Hong Kong stock market surged on strengthening expectations that the Chinese government will unveil more stimulus moves after weak Chinese economic data. China's economic growth eased to 6.8% in the fourth quarter from a year earlier, matching expectations but still the slowest since the global financial crisis, putting pressure on policymakers to roll out more support measures. The benchmark Hang Seng Index has gained 398.36 points, or 2.06%, to 19635.81 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 242.99 points, or 2.99%, to 8377.80 points. Turnover increased to HK$82.99 billion from HK$75 billion on Monday.
Shares of HK-listed mainland insurers marched upward on the heels of A-share market rebound. Ping An (02318) soared 5.3% to HK$35.75 on a report that the insurer plans to spin off its unit Shanghai Lujiazui International Financial Assets Exchange in the second half of 2016. China Life (02628) gained 3% to HK$20.8. Daiwa Research picked CPIC (02601) as its top pick in the sector, sending its stock up 6.6% to HK$27.55.
Hong Kong's seasonally adjusted unemployment rate stood at 3.3% in October - December 2015, same as that in September - November 2015. The underemployment rate increased from 1.3% in September - November 2015 to 1.4% in October - December 2015, according to the Census and Statistics Department.
Sensex gains 1.2%
Indian stock market ended higher, following global stocks rally, after China's economic data prompted investors to anticipate more stimulus measures. Value-buying in recently battered stocks of capital goods, infrastructure, banking and healthcare stocks supported the uptrend. The S&P BSE Sensex closed 1.21%, or 291.47 points, higher at 24,479.84, while the Nifty 50 index closed 1.14%, or 84.10 points, higher at 7,435.10
Larsen and Toubro advanced after the company's construction arm L&T Constructions won orders worth Rs.1,247 crore across various businesses.
Idea Cellular climbed after the company added 1.25 million new mobile subscribers in December 2015.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.56% to 7854.88. South Korea's KOPSI added 0.6% to 1889.64. New Zealand's NZX50 rose 0.37% to 6124.20. Malaysia's KLCI grew 0.41% to 1629.22. Singapore's Straits Times index added 1.75% at 2638.47. Indonesia's Jakarta Composite index picked up 0.2% to 4491.74.
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