Asia Pacific share market were in negative territory on Friday, 18 December 2015, as investors locked in some of the previous two days' steep gains, with sentiment turned sour by declines on Wall Street overnight and a persistent drop in the price of crude oil.
Asian shares followed a decline in U.S. stocks overnight due to persistent concern over faltering global economic growth, a day after shares had rallied on the Federal Reserve's decision to raise interest rates. The momentum of the Fed rate hike is starting to fade while more negative angles from the U.S. tightening are being reported. Eventually, four U.S. rate hikes next year could see more funds being shifted from emerging and regional markets to seek better returns.
The crude oil traded weaker on Friday following a big fall earlier this week after a surprise build in U.S. crude inventories. Benchmark U.S. crude was down at $34.84 a barrel in electronic trading on the New York Mercantile Exchange. It closed 1.6% lower at $34.95 a barrel in New York on Thursday. Brent crude, a benchmark for international oils, was up 7 cents at $37.13 a barrel in London.
Among Asian bourses
Australia stocks mixed
Australian share market finished the session in positive territory, as gains in retailers, consumer goods, and financial stocks were more than offset by profit booking among materials and energy stocks. At the close, the benchmark S&P/ASX 200 index rose 4.70 points, or 0.09%, to finish at 510.70 points.
Shares of material and resources companies declined, due to pullback in base metal and crude oil prices overnight. Gold slumped 2.5% $1049.60 an ounce. US Nymex crude was down 1.6% to $35, while global benchmark Brent crude slipped 0.8% to $37. Zinc prices sunk to their lowest in nearly 6 years and other industrial metals also fell. Global miner BHP Billiton dropped 1.8% to A$16.72, while rival Rio Tinto de-grew 2.4% to A$42.30. Smaller iron ore player Fortescue shed 6.8% to A$1.71. Gold miner Newcrest Mining sank 3% to A$12.46 and Perseus Mining slipped 3.7% to A$0.337. Oil and gas producer Woodside declined 0.4% to A$26.71 and Santos lost 1.3% to A$3.435.
Financial shares ended mixed after paring intraday losses, with Commonwealth Bank of Australia up 0.8% to A$81.33 and Westpac Banking Corp up 0.3% to A$32.26, while National Australia Bank fell 0.7% to A$28.74. Australia & New Zealand Banking Group declined 0.5% to A$26.39 after the lender said Graham Hodges will take on the role of acting chief financial officer at the bank. Dexus shares declined 0.4% to A$7.69 after property group moved forward on its bid for Investa Office Fund, with the boards of each backing the A$2.5 billionn takeover proposal.
Shares of Graincorp declined 2.4% to A$8.04 after its chairman Rod Taylor announced he would serve only one more term if re-elected at the company's annual general meeting today
Nikkei retreats 1.9%
The Japanese share market ended deeply in negative territory after a volatile trade, as investors locked in some of the previous two days' gains amid perceptions of overheating in the market. Investors digested a Bank of Japan announcement that it will establish a new program for purchases of exchange-traded funds. All TSE industry groups declined, with the day's notable losers comprised Oil & Coal Products, Insurance, Pulp & Paper, Securities & Commodities Futures, Machinery, and Mining issues. The 225-issue Nikkei Stock Average declined 366.76 points, or 1.9%, to 18986.80. The Topix index of all Tokyo Stock Exchange First Section issues slipped 27.61 points, or 1.76%, to 1537.10.
Wrapping up their last meeting of the year, Bank of Japan policymakers kept monetary policy unchanged at 0.1% as expected, but the central bank announced a new program to purchase ETFs at annual pace of 300 billion yen ($2.45 billion). This is in addition to the bank's existing ETF purchase program which increases ETF holdings at an annual pace of about 3 trillion yen. The central bank made some other tweaks, including plans to buy slightly longer-term Japanese government bonds starting next year. BOJ announced it will extend the maturity of its government bond portfolio from current 7-10 years to new 7-12 years saying the move is intended to flatten the yield curve. It will buy ETFs linked to JPX-Nikkei 400 index and the new program will kick start from April 2016.
Shares of oil producers led declines among the Topix's 33 industry groups after crude futures continued to wallow at multi-year lows against a backdrop of oversupply as well as a stronger dollar following the U.S. Federal Reserve's widely anticipated tightening on Wednesday. Energy explorer Inpex Corp. lost 2.6%. Japan Petroleum Exploration declined 2.5%. Trading houses also weakened, with Mitsubishi Corp shedding 2.1% and Marubeni Corp falling 3.9%.
Shares of megabanks were also among the biggest losers on the Topix, with Mitsubishi UFJ Financial Group Inc falling 2.3% and Mizuho Financial Group Inc losing 2.6%. Sumitomo Mitsui Financial Group Inc was down 2.5%.
Toshiba Corp shares were 2.9%, after reports emerged that the company is considering spinning off its flash memory business to raise funds for restructuring.
China market down marginally
The Mainland China stock market ended marginally down after fluctuating in and out of the neutral line, as investors elected to book some profit following biggest weekly gain in more than a month. Sentiments turned cautious as government started its central economic work meeting today, which will set the tone for economic policies next year. The Shanghai Composite Index declined 0.03%, or 1.03 points, to close at 3578.96. The Shenzhen Composite Index, which tracks stocks on China's second exchange, de-grew 0.28%, or 6.58 points, to close at 2335.60. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, declined 0.19%, or 5.44 points, to close at 2830.26. The Shanghai Composite Index has climbed 4.3% this week.
Shares of realty companies were mixed despite data showed home prices increased in more cities. New home prices rose in 33 out of 70 Chinese cities the government tracked last month, compared with 27 in October, according to the National Bureau of Statistics. Poly Real Estate Group Co. lost 1.5% and Greenland Holdings Corp. fell 0.3%. China Vanke Co jumped by the 10% daily limit before being suspended, after biggest listed Chinese developer announced plan to sell shares for major asset restructuring and asset purchases.
Airlines gained after oil traded below $35 a barrel, bolstering the expectation of further drop in ATF prices which accounts 40% of operating cost. Air China, the nation's largest international carrier, jumped 3.4%. China Southern Airlines Co. surged 7.9%.
Hong Kong market falls
The Hong Kong stock market ended in red, as sentiments turned bearish after losses for US stocks overnight and weak trend in other Asian bourses. Most of sectors declined, with energy and resources stocks being major loser. The benchmark Hang Seng Index fell 116.50 points, or 0.53%, to 21755.56 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 32.11 points, or 0.33%, to 9634.41 points.
Sensex extend losses
Indian benchmark indices extended losses in afternoon trade after the government has lowered its growth forecast for the year ending 31 March 2016 (FY 2016) to 7-7.5% from 8.1-8.5% estimated in February. The revised forecast is as per the mid-year economic review tabled by the government in parliament today, 18 December 2015, according to reports. The mid-year economic review reiterated that the government would meet its fiscal deficit target of 3.9% and revenue deficit target of 2.8% for the current fiscal. At 13:15 IST, the barometer index, the S&P BSE Sensex, was down 197.68 points or 0.77% at 25,606.10. The Nifty 50 index was down 59.35 points or 0.76% at 7,785.
Jyoti shares surged 20% to its maximum intraday limit of Rs 74.70. The company said that it has bagged an order for metallic volute pumps in the state of Karnataka.
Vedanta shares fell on reports its arm Sesa Goa may suspend iron ore mining in Goa due to an ongoing dispute with truck operators.
Syndicate Bank rose after the bank said that its issue of unsecured, redeemable non-convertible Basel III compliant debentures was fully subscribed.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.8% to 8257.32. South Korea's KOPSI de-grew 0.1% to 1975.32. New Zealand's NZX50 added 0.3% to 6107.84. Indonesia's Jakarta Composite index dropped 1.7% to 4476.42. Malaysia's KLCI sank 0.7% to 1645.59. Singapore's Straits Times index melted 0.5% at 2847.
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