Asia Pacific share market ended mostly down on Monday, 09 May 2016, after a disappointing U.S. jobs report and worse-than-expected trade numbers out of China raised questions about the underlying strength of the world's biggest economies.
The weaker-than-expected U.S. jobs report fanned expectations that the Federal Reserve would have to hike interest rates at a very slow pace. U.S. non-farm payrolls increased by 160,000 in April, the smallest gain since September, and below the 200,000 economists had expected. It prompted some financial institutions to lower their expectations of an interest rate hike for this year to just one from two before the report.
Investor sentiment toward Chinese economy has turned more bearish after a weak Chinese trade figures that reinforced concerns over the state of the world's second largest economy. China's exports rose sharply slower while imports fell by a wider margin in April month on month amid a still weak recovery momentum. Exports in yuan-denominated terms rose 4.1% year on year last month to 1.13 trillion yuan, slower than the 18.7% jump in March, data from the General Administration of Customs showed yesterday. Imports fell 5.7% year on year to 827.5 billion yuan, falling for the 18th straight month and the drop widened from the 1.7% decrease in March. But China's trade surplus grew to 298 billion yuan in April, up from 194.6 billion yuan in March.
Sentiments were also hit by spike in crude oil prices on supply woes stemming from devastating wildfires in Canada. U.S. crude was up 1.9% at $45.51 a barrel and Brent crude rose 1.4% to $46.02 a barrel as a wildfire raged through Canada's oil sands region, shutting half of the country's vast oil sands capacity. The oil market was also pondering weekend news of Saudi Arabia's appointment of a new energy minister to take over from veteran oil minister Ali al-Naimi. The new appointee, Khalid al-Falih, is a believer in reform in the oil market.
Among Asian bourses
Australia Market closes in green
Australian share market closed higher after volatile trade on the back of strength in 9 out of 10 ASX sectors, with consumer staples, energy, healthcare, and property trusts issues being major gainers. At close of trade, the benchmark S&P/ASX 200 advanced 28.70 points, or 0.54%, to 532070. The broader All Ordinaries grew 29.20 points, or 0.54%, to 5387.80.
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The banks and financial stocks closed stronger, with Westpac Banking Corp up 1% to A$31.11, National Australia Bank up 0.9% to A$28.45, and Commonwealth Bank up 1.9% to A$75.78, but ANZ Banking Group declined 3% to A$24.38.
Energy stocks were up after oil prices picked up 0.8% before the session. But the sector pared some gains from the open after rating agency Fitch warned of worsening credit metrics as Australia's LNG output continued to increase. Santos was 1.7% higher at A$4.18, while Woodside gained 1.4% to A$27.34 and Origin Energy rose 2.4% to A$5.20.
Metal mining stocks were down due to weaker than expected China's exports and imports data for the month of April. The figures showed Chinese exports were down 1.8% from a year ago, below expectations of flat growth, while imports were 10.9% worse off year-on-year, against expectations of a negative 4% figure. BHP Billiton declined 0.3% to A$18.41 and Rio Tinto was down 2.1% to A$46.74.Fortescue Metals fell 2.3% to A$3.04. Orica fell 12.3% to A$13.53, the day's worst performing stock, after the explosives maker posted a 33% plunge in net profit, citing the "deterioration" in the global mining industry.
Japan Market rises for the first time in seven sessions
The Japan share market ended higher for the first time in seven sessions, on the back of yen depreciation against the greenback and positive lead from Wall Street on Friday. Total 22 out of 33 TSE industry sectors were with, with gainers were led by retail, real estate as well as fishery, agriculture and forestry issues. The 225-issue Nikkei average advanced 109.31 points, or 0.68%, to close at 16216.03. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 8.34 points, or 0.64%, higher at 1,306.66. On the First Section, advancing issues outnumbered declining ones 1,283 to 567, while 101 ended the day unchanged.
IHI rose 3.8% to 245 yen on reports that the major comprehensive heavy machinery manufacturer is set to book roughly 60 billion yen ($557 million) in group operating profit for fiscal 2016 ending next March.
Yoshinoya Holdings increased 0.9% to 1,386 yen after the "gyudon" (rice and seasoned beef bowl) restaurant chain reported on Friday that sales rose in April from a year earlier on a same-store basis, helped by the popularity of its pork bowl, which was re-introduced last month.
Fast Retailing gained 2.1% to 28,610 yen after the operator of Uniqlo casual wear stores also reported that sales rose in April from a year earlier on a same-store basis helped by brisk campaign sales.
Marine constructor Toa shed 22.1% to 169 yen after the company said on press conference on Friday that it submitted falsified data to the transport ministry on its seismic reinforcement runway work at Tokyo's Haneda airport.
China Market tumbles on disappointing trade data
Mainland China stock market finished the session steep lower, as risk aversion selloff triggered after weak Chinese trade figures reinforced concerns over the state of the world's number 2 economy. Risk sentiments also dampened by the Communist Party's mouthpiece report that the nation's economy is headed for an L-shaped recovery, stoking worries among investors that growth in the world's second-largest economy will moderate further. All10 SSE sectors declined, with shares of materials and resources and financial issues being major losers. The benchmark Shanghai Composite Index tumbled 81.14 points, or 2.79%, to 2832.11. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, sank 64.73 points, or 2.07%, to 3065.62.
Shares of major resource producers were struggled on weak base metal prices. Baoshan Steel fell 4.62%, Baotou Steel fell 5.69% and Aluminium Corp of China was down 4.41%. Jiangxi Copper Co. fell 3.8%, while Aluminum Corp. of China Ltd. retreated 4.4%.
Coal companies led declines for energy shares, with Shanxi Xishan Coal & Electricity Power Co. and Yanzhou Coal Mining Co. tumbling 10%.
Citic Guoan Wine and Citic Guoan Information Industry, which have been considered as targets for backdoor listing, plunged 10% and 9.7%, respectively. Both shares had plunged on Friday too, by the 10% daily limit allowed by authorities.
Hong Kong Market rises 0.23%
The Hong Kong stock market finished in positive zone, registering first gain in six consecutive sessions, on following gains in the US markets on last Friday. But, market gains were limited after China reported its exports and imports fell more than expected in April, refueling concerns about the health of the world's second-largest economy. The benchmark Hang Seng Index gained 46.94 points, or 0.23%, to 20156.81 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, sank 20.98 points, or 0.25%, to 8450.72. Turnover reduced to HK$54.6 billion from HK$67.7 billion on Friday.
China Iron and Steel Association announced that crude steel daily output for the last 10 days in April rose 1.86% to 1.72 million tonnes. Worries of falling steel prices pressured steel counters. Angang Steel (00347) plunged 7% to HK$3.17. Maanshan Iron (00323) fell 3% to HK$1.58. Chongqing Iron (01053) slipped 3.4% to HK$1.15.
Li & Fung (00494) said its long term customer Aeropostale has filed for bankruptcy protection. UBS Research expects the impact is immaterial. Li & Fung dipped 1% to HK$4.41.
Wharf (00004) was the top blue-chip winner today, rising 3% to HK$41.8. JP Morgan estimated the company's shopping malls may gradually improve their performance.
Indian Market jumps on optimism over progress of key legislation in parliament
Optimism over the progress of key legislation in parliament and gains in European stocks triggered rally on the domestic bourses. The barometer index, the S&P BSE Sensex, rose 460.36 points or 1.82% to settle at 25,688.86. The Nifty gained 132.60 points or 1.71% to settle at 7,866.05. The Sensex, and the Nifty, both, hit their highest closing level in almost two weeks.
The latest rally on the domestic bourses was triggered by optimism over the progress of key legislation in parliament after the the Lok Sabha, last week, passed a key economic bill viz. the Insolvency and Bankruptcy Code, 2015. Once the bill becomes a law, it will help creditors recover bad debt faster. The bankruptcy bill aims to provide single unified law for timely resolution of insolvency and bankruptcy related cases in India. The Lok Sabha passed the Insolvency and Bankruptcy Code, 2015 on 5 May 2016. The bill will now go to the Rajya Sabha for its passage.
The focus now shifts to another key economic bill pending for its passage in Rajya Sabha viz. the Goods and Services Tax (GST) bill. The constitutional amendment bill for the implementation of GST, which subsumes all indirect taxes to create a unified market across the country, has been cleared by the Lok Sabha and is awaiting legislative passage in the Rajya Sabha. For the bill to become a law, the GST bill also needs to be approved by half the state assemblies.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 was down 0.2% to 6885.05. South Korea's KOSPI index fell 0.45% to 1967.81. Taiwan's Taiex index slid 0.2% to 8131.83. Malaysia's KLCI de-grew 1% to 1632.19. Indonesia's Jakarta Composite index declined 1.5% to 4749.31. Singapore's Straits Times index rose 1.3% to 2766.06.
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