Asia Pacific share market were mostly higher on Wednesday, 21 October 2015, despite supporting cues from offshore markets overnight, thanks to weak trade data from Japan that bolstered speculation of additional stimulus. Also, buying momentum spirited by hopes that the ECB may add to its quantitative easing programme in order to tackle deflation.
Trade statistics from the Japan's Ministry of Finance released today, showing pace of increase in Japanese exports continued to decelerate to 0.6% on year in September from +3.1% in August and +7.6% in July, hit by slower demand from China and some other Asian economies and a calendar factor. There was one more public holiday in September, compared to a year before. Exports to China fell 3.5% on year in September for the second straight fall while those to Asia posted the first drop in seven months, down 0.9%. Shipments to the U.S. maintained a double-digit percentage rise, up 10.4%. Exports to the European Union rose 5.1%, the first rise in two months. As expected, imports fell 11.1% on year for the ninth straight decrease, led by lower prices for oil and gas. Japan's trade deficit was Y114.5 billion in September, shrinking from a shortfall of Y962.0 billion a year before and Y569.4 billion in August.
Investors were largely awaiting for the outcome of key policy meetings of developed country central banks. The European Central Bank's policy meeting is scheduled this Thursday, followed by the US Federal Reserve's policy review on October 27-28 and the Bank of Japan's policy meeting on October 30.
On Wall Street, stocks closed modestly lower amid choppy trades on Tuesday as traders seemed uncertain about the near-term direction of the markets following recent volatility. Traders were also digesting a mixed batch of corporate earnings news. The Dow edged down 13.43 points or 0.1% to 17.217.11, the Nasdaq slid 24.50 points or 0.5% to 4,880.97 and the S&P 500 dipped 2.89 points or 0.1% to 2,030.77.
The major European markets all moved to the downside on Tuesday. While the French CAC 40 Index fell by 0.6%, the German DAX Index and the U.K.'s FTSE 100 Index edged down by 0.2% and 0.1%, respectively.
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Among other Asian bourses
Resources help Australia market to modest gain
The Australian share market closed modest higher, as gain in resources stocks helped to offset losses banks and elsewhere. The benchmark S&P/ASX 200 index rose 12.70 points, or 0.24%, to 5248.30 points, while the broader All Ordinaries index added 14.90 points, or 0.28%, to 5286.50 points.
Shares of material companies were up, led by BHP Billiton, up 1% to A$24.23 after it posted solid production growth in the first quarter of the financial year, lifting iron ore output by 7%and also maintained its full-year production outlook. Rio Tinto was up 1.2% at A$52.78, and Fortescue Metals added 6% to A$2.49. Gold miner Newcrest jumped 2.2% to A$14.42 after gold prices snapped a three-session losing streak and edged higher overnight.
Oil explorer stocks were also higher, with Santos gaining 2.8% to A$5.44, Woodside Petroleum up 0.8% to A$30.70, and Oil Search up 0.3% to A$7.32.
The banks and financial stocks were mostly down on news that the Australian government has accepted a majority of the recommendations of the Murray review into the financial system. Westpac Banking Corp fell 0.3% to A$30.75 and National Australia Bank shed 0.1% to A$31.72, while Commonwealth Bank of Australia added 0.1% to A$75.81 and ANZ Banking Group rose 0.6% to A$28.56.
Nikkei surges on stimulus hopes
The Japanese share market ended higher as weak Japanese trade data fuelled speculation the Bank of Japan will launch another round of monetary easing. All 33 TSE first-section sector sub-indexes ended up, with Iron & Steel, Nonferrous Metals, Electric Appliances, and Machinery issues being major gainers. The Nikkei Stock Average added 75347.13 points, or 1.91%, to end at 18554.28 points, meanwhile the broader Topix index added 1.84%, or 27.53 points, to 1526.81 at the close.
Shares of major exporters were stronger, thanks to yen weakening against the greenback and other major currencies. A weaker yen is positive for Japanese exporters as it makes products cheaper overseas and improves their profits when repatriated. Blue-chip exporters such as Toyota Motor Corp. rose 2%, even after the carmaker said it will recall 6.5 million vehicles worldwide for a melting power window switch. Sony Corp. added 4.4% and Honda Motor Co. gained rose 3.5%. Canon Inc. gained 2.8%.
Yaskawa Electric Corp. jumped 10% after the industrial-robot maker reported second-quarter profit that beat analyst estimates.
Idemitsu Kosan Co. dropped 0.7% after the oil refiner unexpectedly reported a preliminary operating loss of 10 billion yen for the six months through September. The company had forecast a profit of 24 billion yen.
China market retreats from a two-month high
The Mainland China stocks ended sharply down, with small-cap stocks leading selloff on worries that recent gains were excessive as compared earnings prospect. The Shanghai Composite Index tumbled 3.06%, or 104.65 points, to close at 3320.68 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, tanked 5.94%, or 119.35 points, to 1889.13. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, dropped 6.63%, or 166.42 points, to close at 2344.74, after soaring 40% through Tuesday from last month's low.The Shanghai Composite has rebounded 8.8% in October, amid speculation the government will loosen monetary policy and announce more overhauls of state-owned enterprises to bolster the economy.
All 10 SSE industry groups ended down, with technology companies suffering the most damages amid wave of profit booking. Leshi Internet Information & Technology Corp. and East Money Information Co both tumbled by the 10% daily limit.
Indian stocks down
A bout of volatility was witnessed as Indian benchmark indices trimmed losses in afternoon trade. At 13:16 IST, the barometer index, the S&P BSE Sensex, was off 49.88 points or 0.18% at 27.256.95. The Nifty was currently off 23.20 points or 0.28% at 8,238.45.
HDFC Bank edged lower as second quarter results came more or less in line with market expectations. The bank's net profit rose 20.49% to Rs 2869.45 crore on 24.68% growth in total income to Rs 17324.28 crore in Q2 September 2015 over Q2 September 2014.
Bajaj Auto rose 2.99% at Rs 2,511.30 after net profit surged 57.9% to Rs 933.06 crore on 2.85% growth in total income to Rs 6250.42 crore in Q2 September 2015 over Q2 September 2014.
Sun Pharmaceutical Industries was off 1.03% at Rs 892.40 as the stock turned ex-dividend today, 21 October 2015, for dividend of Rs 3 per share for the year ended 31 March 2015.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index was down 0.5% to 8609. South Korea's KOPSI rose 0.2% to 2043. New Zealand's NZX50 climbed up 0.4% to 5918. Singapore's Straits Times index rose 0.3% at 3027. Indonesia's Jakarta Composite index was up 0.3% to 4598. Malaysia's KLCI rose 0.2% to 1708. Hong Kong market closed for a public holiday.
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