US stock markets were modestly higher by the end of Monday trading, shrugged off concerns about Italy's lost referendum on constitutional reform. At the close, Dow closed at 19,216.24 (up 45.82 or 0.2%); S&P 500 ended at 2,204.71 (up 12.76 or 0.6%); and NASDAQ closed at 5,308.89 (up 53.24 or 1%). The US economic stats out on the day were unambiguously positive, providing further reasons - as if they were needed - for the FOMC to get serious about normalising US monetary policy settings. Overnight in the U.S., the ISM nonmanufacturing index rose to 57.2 in November from 54.8 in the previous month. The November ISM services index data bettered economists' consensus forecasts, providing yet another sign that corporate America was not overly fussed about as pending Trump administration. The Fed-prepared labor market conditions index was materially stronger than the economists consensus forecast - and this after the preceding month's data also enjoyed a nice upward revision.
Italian Prime Minister Matteo Renzi resigned Monday after a decisive referendum defeat, raising some uncertainty over the stability of European policy-making. Market reaction appeared relatively mild, however, compared with the fallout from the Brexit vote and the U.S. presidential election.
The market's near-term focus is on the Federal Reserve's rate decision later this month. While a December rate increase has been factored in, investors are eager for any clues about the number of times the Fed will raise rates next year.
Among Asian bourses
Australia stocks gain 0.5%
Australian share market advanced today, snapping two straight sessions of losses, as investors' appetite for risk assets underpinned on tracking gains on the offshore market overnight. With the exception of consumer staples and technology issues, every sector was up, with realty, industrials, and materials issues being notable gainers. At the closing bell, the benchmark S&P/ASX 200 index advanced 28.30 points, or 0.52%, to 5428.70, while the broader All Ordinaries index inclined 28.60 points, or 0.52%, to close at 5486.60.
Shares of materials and resources were performers among ASX sectors, thanks to base metal positive close in overnight trade. Base metals were in demand in Monday LME trading, with copper closing at an 18-month high. Rio Tinto added 0.9% to A$59.14 and Fortescue added 0.8% to A$6.31. BHP ended up 1.2% to A$25.48, after winning a bid to partner with Mexican state oil company Pemex in a joint venture to develop a potentially lucrative deep water field in the country's untapped Gulf waters.
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Origin Energy shares gained 2.5% to A$6.58 after the gas and power retailer announced a plan to spin off its interests in conventional oil and gas fields in an initial public offering expected to be worth at least A$1 billion.
The Reserve Bank of Australia held interest rates at a record low of 1.5% on Tuesday despite a recent run of soft economic data but weak inflation figures kept the door open for future cuts. Inflation continued to disappoint, with core prices rising just 1.3% in the September quarter, well off the RBA's target range of 2-3%. The central bank acknowledged the housing market had strengthened, with prices in some regions "rising briskly". A booming property sector previously saw the Reserve Bank reluctant to ease rates further owing to concern it could lead to overheating. The RBA's board next meets in early February, two weeks after the release of fourth-quarter inflation figures.
Nikkei bounces on yen depreciation, upbeat offshore lead
The Japan share market closed session in positive territory on Tuesday, 06 December 2016, bouncing back from Monday's losses as investors follow the lead in European and US markets overnight. Meanwhile, yen depreciation to lower 114-level against greenback also added strength to benchmark indices. Total 25 out of 33 TSE industry category on the main section gained ground, with Marine Transportation, Iron & Steel, Nonferrous Metals, Securities & Commodities Futures, Electric Power & Gas, and Insurance issues being major gainers. The 225-issue Nikkei average inclined 85.55 points, or 0.47%, to close at 18,360.54. The Topix index of all first-section issues finished up 10.24 points, or 0.7%, at 1,477.20.
Shares of financial, electronics and steel makers were stronger. Nomura Holdings Inc. rose 3% to 695.9 yen. Electronics firm Sharp Corp. gained 8.3% to Y208. Steel maker JFE Holdings Inc. advanced 3.9% to Y1,803.5.
Preliminary average wages data in the Monthly Labor Survey from the Ministry of Health, Labour and Welfare released on Tuesday, showing the total monthly average cash earnings per regular employee rose just 0.1% on year in October to Y266,802 for the first rise in three months after being unchanged in the previous two months.
China Stocks edge lower
Mainland China stock market declined for second straight session on Tuesday, 06 December 2016, as investors contemplated the possible repercussions on trade from scathing comments by a top securities regulator about "barbaric" share acquisitions. Most sectors lost ground, while gains were only seen in defensive consumer and healthcare sectors, perceived as prominent beneficiaries of the newly launched Shenzhen-Hong Kong stock connect. The Shanghai Composite Index dropped 0.16%, to 3,199.65, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.16% to 2,071.44. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, fell 1% to close at 2,122.26 points.
The chairman of China's securities regulator condemned barbaric leveraged company buyouts by some asset managers using illegal funds, according to a statement posted on the China Securities Regulatory Commission (CSRC) on Saturday.
China's industry-leading blue-chips witnessed a broad slump on Monday, posting its heaviest fall in six months, after top securities regulator condemned "barbaric" share acquisitions by some unidentified asset managers.
Piling up the pressure, the country's insurance regulator said it has taken regulatory measures against Foresea Life, a unit of Chinese financial conglomerate Baoneng Group, and Evergrande Insurance, a unit of China Evergrande, including suspending some of their insurance businesses.
Financial shares in China weakened after the country's insurance regulator suspended an unlisted insurer from selling some products. This followed the country's top market regulator's scathing comments over the weekend condemning "barbaric" share acquisitions by some unidentified asset managers.
Gree Electric Appliances rebounded following the previous day's 10% slump, after data showed overseas investors spent 372 million yuan buying the stock on Monday via the Shenzhen-Hong Kong Stock Connect as they hunted for bargains.
Hong Kong Stocks end higher
The Hong Kong stock market finished session higher, recovering nearly triple of the previous day's losses following a positive lead from European and US markets. The Hang Seng Index ended up 0.75%, or 169.60 points, to 22,675.15, while the Hang Seng China Enterprises index inclined 0.59%, or 57.05 points, to 9,768.85. Turnover decreased to HK$60.7 billion from HK$68.8 billion on Monday.
HSBC (00005) soared 3% to HK$63.4 after Morgan Stanley upgraded the stock to "overweight" with a higher target price of HK$64 (previously HK$53). It contributed a 79-point gain to the HSI.
Citi Research revised up Macau's GGR to MOP19 billion, representing a growth of 4%. SJM Holdings (00880) soared 7% to HK$6.59 after Goldman Sachs' upgrade to "buy" and a higher target price of HK$8, citing Macau's VIP gross gaming revenue is improving as big players are returning. Galaxy Entertainment (00027) and Wynn Macau (01928) rose 4% and 3% to HK$38 and HK$14.02.
China Life (02628) shot up 3% to HK$22.3 after Nomura reiterated its "buy" call. China Taiping (00966) gained 2% to HK$17.36.
Sensex hovers in positive terrain
Indian share market continued to hover in a narrow range in mid-afternoon trade. At 14:16 IST, the barometer index, the S&P BSE Sensex, was up 114.10 points or 0.43% at 26,463.20. The Nifty 50 index was up 39.10 points or 0.48% at 8,167.85.
FMCG major Dabur India declined 1.48% after the company foresees some near term pressure on the business on account of scarcity of cash with customers and trade due to demonetization.
On macro front, a two-day meet of the monetary policy committee (MPC) of the Reserve Bank of India (RBI) is scheduled today, 6 December 2016 and tomorrow, 7 December 2016. It will be interesting to watch RBI's monetary policy stance this time in a scenario of government's recent historic move of demonetization of higher denomination notes and amid easing consumer inflation. RBI had cut policy rates by 25 basis points in its last meet in October.
Meanwhile, Chief minister of Tamil Nadu, J Jayalalithaa, died yesterday, 5 December 2016, after undergoing treatment at Apollo Hospitals in Chennai. She was 68.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 rose 0.8% to 6910.36. Indonesia's Jakarta Composite index added 0.1% to 5272.96. Taiwan's Taiex grew 1% to 9250.77. South Korea's KOSPI index was up 1.4% to 1989.86. Malaysia's KLCI grew 0.3% to 1629.73. Singapore's Straits Times index added 0.2% to 2949.12.
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