Regional stocks got off to a weaker start after the US market retreated on Thursday, after the latest round of monetary easing by the European Central Bank fell well short of investors' expectations. The Dow Jones industrial average 1.42% to 17,477.67, the S&P 500 lost 1.44% to 2,049.62 while the Nasdaq Composite dropped 1.67% to 5,037.53. In the Europe, The Stoxx Europe 600 slumped 3.1% to end at 372.11, Germany's DAX 30 index dropped 3.6% to 10,789.24, France's CAC 40 index ended down 3.6% at 4,730.21. In London, the FTSE 100 index was slammed down 2.3% to 6,275.
The European Central Bank cut a key interest rate and extended its stimulus program to bolster the 19-country eurozone economy but the actions underwhelmed investors. The ECB, which sets monetary policy for the 19 countries that use the euro currency, yesterday cut the interest rate on deposits from commercial banks from minus 0.2% to minus 0.3%. Cutting the rate is intended to push banks to lend excess cash by imposing a penalty on the deposits they park at the central bank. But many in the markets had predicted a bigger cut to minus 0.4%.
Alongside other measures, ECB President Mario Draghi said the bank will extend the duration of its bond-buying program, which aims to make borrowing cheap in the wider economy. Draghi said the program, which was due to expire in September 2016, is now intended to run until March 2017 or beyond if necessary. Though the program has been extended, which will increase the size of the overall stimulus from the previous 1.1 trillion euros (US$1.2 trillion), the monthly cap of 60 billion euros in purchases was kept.
The ECB news overshadowed Federal Reserve chief Janet Yellen's suggestion on Thursday that the central bank would raise interest rates for the first time in a decade at the Fed's policy meeting this month.
Federal Reserve Chair Janet Yellen delivered a cautiously upbeat outlook for the U.S. economy on Thursday, signaling the conditions necessary for an interest-rate increase have been met and that she hopes to tighten monetary policy slowly after lift-off. Investors are awaiting a report on November payrolls later Friday. Her comments to a Congress committee were nearly identical to portions of a speech she gave Wednesday.
In US, Fed chair Janet Yellen testified before Congress Joint Economic Committee yesterday. She noted that "US economic growth is likely to be sufficient over the next year or two to result in further improvement in the labor market." And, "ongoing gains in the labor market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2% as the disinflationary effects of declines in energy and import prices wane." Earlier in the week, Yellen also noted that between now and the next FOMC meeting, there will be "additional data that bear on the economic outlook" and policymakers will assess all of the available data and their implications for the economic outlook in making our policy decision."
The non-farm payroll report will be a critical piece of data to close the case for Fed's hike on December 16.
Among Asian bourses
Australia market slips 1.46%
The Australian share market slipped further ground today, following selloff in the global markets overnight, after the European Central Bank's stimulus package fell well short of markets' high expectations. All ASX industry groups declined, with financial, telecom, industrial, and material issues being major losers. At the close, the benchmark S&P/ASX 200 index ended 76.10 points, or 1.46%, down at 5151.60 points, while the broader All Ordinaries index de-grew 75.20 points, or 1.43%, to 5201.50 points.
Shares of materials and resources companies declined further today, suffered by plunge in iron ore to a new 10-year trough. Global miner BHP Billiton was off 1.5% to A$17.92 and Rio Tinto sank 2.7% to A$44.35. Overnight both stocks saw a big sell off in the London stock market on the back of the ECB decision.
Oil producers were down despite upticks in U.S. crude and Brent prices overnight. West Texas Intermediate (WTI) futures were up $1.14 or 2.85% at $41.08 while the internationally traded Brent was up $1.43 or 3.37% at $43.94 per barrel. Oil and gas producer Woodside Petroleum dropped 1.3% to A$29.09, Oil Search declined 1.7% to A$7.96, and Origin Energy was down 2.3% to A$5.42. Santos shares lifted 2.4% to A$4.23.
Shares of banks and financials were also moved into negative territory amid profit booking after a number of days of strong buying this week. Australia & New Zealand Banking Group fell 2.5% to A$27.11, Commonwealth Bank of Australia 1.7% to A$80.11, Westpac Banking Corp 2% to A$32.24, and National Australia Bank 1.6% at A$29.56
The latest Australian Bureau of Statistics (ABS) Retail Trade figures showed that Australian retail turnover rose 0.5% in October 2015 following a rise of 0.4% in September 2015, seasonally adjusted.
Nikkei slips on tracking global selloff, stronger yen
The Japanese share market ended steeply down, following the fall of US and European stocks, in reaction to the ECB monetary policy move. All 33 TSE industry groups declined, with the day's notable losers comprised Marine Transportation, Real Estate, and Metal Products issues. The Nikkei 225 index at the Tokyo Stock Exchange retreated 2.18%, or 435.42 points, to 19504.48. The wider Topix index of all first-section shares retracted 1.8%, or 28.92 points, to 1574.02.
Shares of marine transport companies declined after Nomura Holdings Inc cut its rating on several shippers. Mitsui OSK Lines was down 4% and Nippon Yusen KK sank 2.9%.
Fujitsu gained 2% on reports that the electronics maker is considering merging its personal computer operations with Toshiba Corp. and Vaio, formerly Sony Corp.'s PC unit, which would give them upwards of 30% of the Japanese marketshare, surpassing market leader NEC Lenovo Japan.
Nippon Suisan Kaisha gained 2.6%, after Daiwa Securities Group Inc. upgraded the seafood producer to outperform.
China market falls for the first time in five days The Mainland China stock market ended down for the first time in five straight sessions, as investors elected to withdraw some profit off the table on tracking selloff in the global markets after the European Central Bank's stimulus measures, rolled out at a policy meeting overnight, fell short of market expectations. Every industry category on the main section lost ground, with decliners led by financials, energy, industrials, and materials issues. The Shanghai Composite Index ended 1.67%, or 59.83 points, down at 3525 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, slipped 0.5%, or 10.68 points, to close at 2233.26. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, dropped 0.6%, or 15.96 points, to close at 2692.16.
Shares of financial and realty companies were major drag among SSE industry groups, amid profit booking following sharp recent gains. Metro Land Corp. led declines among developers, while Poly Real Estate Group Co, Huatai Securities Co. and New China Life Insurance Co, and Bank of China also ended with notable losses.
Shares of materials and resources were also down, with Hebei Iron & Steel Co. paced losses among commodity companies. PetroChina Co was ended lower, while Yang Quan Coal Industry Group Co. added little ground today.
China Railway Group climbed after the company announced 11.55 billion yuan ($1.8 billion) asset swap with China Railway Erju Co.
Hong Kong stocks slide 1.1% in morning session
The Hong Kong stock market ended steep lower in the morning session today, following a slide of US and European markets overnight on disappointment to the European Central Bank's latest policy easing measures and the U.S. Federal Reserve chief indication the central bank is on track for an interest rate hike this month. Most of the sectors dived into sea of red, with decliners being led by insurance, bank and oil stocks. By midday, the Hang Seng Index ended down 252 points or 1.1% to 22,164. Half-day turnover increased to HK$38.3 billion from HK$36 billion on Thursday.
Tencent (00700) dipped 3% to HK$149.6 despite Barclays Research is confident with its 2016 outlook and an "overweight" recommendation.
Tingyi (00322) slipped 2% to HK$11.24 after BNP Paribas lowered its target price to HK$7.95 and downgraded its rating to "reduce". Want Want (00151) also encountered similar downgrade fate, ended 2% lower at HK$6.
BEA (00023) fell 1% to HK$27.4 after its second largest shareholder Caixabank sell its entire 17.24% stake to its parent Criteria.
Indian market languishes in red
Indian benchmark indices continued to hover in a narrow range near their intraday low in negative terrain during early afternoon trade. At 12:20 IST, the barometer index, the S&P BSE Sensex, was off 220.81 points or 0.85% at 25,665.81. The Nifty 50 index was off 69.10 points or 0.88% at 7,795.05. Key indices fell today, 4 December 2015, in line with drop in global stocks after the European Central Bank (ECB)'s stimulus package announced after policy meet yesterday, 3 December 2015, fell well short of markets' high expectations.
Mindteck (India) rose 2.14% after the company announced that it has won a prestigious state government contract, along with two other technology companies. The consortium will integrate various Nagar Parishads under one platform to enable the implementation of eNagarpalika.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index slid 0.68% to 8398.60. South Korea's KOPSI slipped 1% to 1974.40. Malaysia's KLCI sank 0.4% to 1667. Singapore's Straits Times index dropped 0.5% at 2870. Indonesia's Jakarta Composite index fell 0.6% to 4508. New Zealand's NZX50 fell 0.5% to 6094.
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