Asia Pacific share market closed mostly higher on Monday, 24 October 2016, as investors braced for a busy week of earnings and economic data across Japan, China and the U.S. However, market movement on the upside capped after Wall Street's sluggish performance late last week and on increased odds for a December Fed rate hike following hawkish Fed speaks. The MSCI Asia Pacific Index rose 0.4% to 140.27.
Looking ahead, market participants bracing for a slew of data this week including consumer price data from Japan and some euro zone countries, third quarter US GDP and a number of purchasing managers' index (PMI) data from developed economies and following speeches by members of the U.S. Federal Reserve that could indicate the likelihood of an interest rate rise in December.
The US currency received a boost last week as the euro slid after the European Central Bank doused talk it was contemplating tapering its monetary easing. The dollar was also supported by hawkish comments from Fed officials including New York Fed President William Dudley and higher expectations that Hillary Clinton will win the US presidential election, which have increased bets that the Fed will raise rates in December.
Among Asian bourses
Australia Market slides amid weaker oil prices
Australian share market ended down, with sentiments weighed down by tracking dismal performance on the Wall Street last Friday. Meanwhile increased cautiousness heading into the key Q3 inflation report due later this week and increased odds for a Dec Fed rate hike following hawkish Fed speaks also weighed on the markets' sentiment. Most of ASX sectors declined, led by a sharp sell-off in healthcare stocks and a fall in energy stocks. At the closing bell, the benchmark S&P/ASX 200 index fell 21.80 points, or 0.4%, to 5,408.50, while the broader All Ordinaries index was down 24.80 points, or 0.45%, to 5,489.10.
Healthcare stocks suffered the biggest losses on following hospital operator Healthscope's disappointing first quarter revenue update which sparked growth concerns for the sector. Shares in Healthscope, which slid nearly 19% on Friday after the private hospital operator said hospital revenue growth had been slower than expected in the first quarter, gave up another 5.88% to finish A$2.24. Elsewhere in the heatlhcare sector, hearing implant maker Cochlear tumbled 4.25% to A$129.36, and blood products company CSL fell 1.47% to A$102.53.
Shares in energy companies ended down on tracking drop in crude oil prices. The international crude oil declined after Iraq said it does not want to join the production cut to prop up the market. Oil prices fell after Iraq said it wanted to be exempt from a production cut by the Organization of the Petroleum Exporting Countries (Opec) that the group plans to decide at its Nov 30 meeting. Woodside Petroleum was down 1% to close at A$28.99 and Santos 2.8% to A$3.73.
Japan Market closes in green
The Japan share market closed in green terrain after recouping early losses, as trade data showed exports did not fall as deep as expected. Meanwhile, yen weknes against the greenback also aided strength to the market. Total 21 out of 33 TSE sectoral issues advanced, with Fishery Agriculture & Forestry, Warehousing & Harbor Transportation Services, Textiles & Apparels, and Glass & Ceramics Products issues being major gainers, whereas Mining, Banks, Precision Instruments, and Iron & Steel issues being major losers. The 225-issue Nikkei average gained 49.83 points, or 0.29%, to close at 17234.42. The Topix index of all first-section issues ended up 2.32 points, or 0.17%, at 1,367.61.
Trade statistics from the Ministry of Finance released on Monday showing Japan's September exports slide 6.9% on year (the median forecast: -10.4%), the 12th straight drop after drop of 9.6% in August, led by lower shipments of automobiles, steel and semiconductors. Both the government and the Bank of Japan expect exports to remain largely flat for now in light of slower global growth and the yen's relative strength. Imports declined by 16.3% on year (the median forecast: -16.6%), the 21st straight fall after drop of 17.2% in August due mainly to continued year-on-year drops in oil and gas prices. The September trade balance: a surplus of Y498.3 billion, the first surplus in two months following a deficit of Y19.2 billion in August and compared with a deficit of Y121.3 billion in September 2015.
Other data were more positive, with Japan's preliminary Markit/Nikkei October manufacturing purchasing managers index (PMI) rising to 51.7 from 50.4 in September, the fastest expansion in nine months. Readings over 50 indicate expansion, while levels below indicate contraction.
Nintendo, which unveiled its new upcoming gaming console, Nintendo Switch, last week, dropped 4.82%, after tumbling over 6% on Friday as investors were left unimpressed with the new offering. The company was also set to announce its earnings this week.
By contrast, electronics-maker Sharp Corp finished up 4.8%, following a report that the company is set to streamline operations by closing a factory in Hiroshima as early as 2017 and shifting work to another factory in the same prefecture.
China Market rises as raw material shares jump
Mainland China stock market soared up on increased appetite for equities as the government cracks down on real-estate speculation. Most of SSE sectors inclined with energy and raw material stocks being notable gainers on signs that government measures to reduce overcapacity were starting to bear fruit. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.15%, to 3,316.24 points, while the Shanghai Composite Index inclined 1.21% to 3128.25 points.
Resources firms, including coal miners and steelmakers inclined on signs that prices of these commodities may sustain their gains due to tighter supply as a result of Beijing's move to reduce capacity in those sectors. An index tracking coal stocks jumped 5%, amid reports that China's electric power utilities are scrambling to source coal, but are coming up short as efforts to boost supply take time to come into effect. China's state planner said that the government will allow coal mines in areas with short supply to increase their production to help cope with an expected increase in demand for heating and power during winter and spring.
China's yuan weakened to a fresh six-year low against the dollar, with the U.S. currency perking up as hawkish comments from a Federal Reserve official boosted bets of a rate hike by year-end. The yuan settled at 6.7718 per dollar, hitting a low of 6.7770 earlier in the session, compared with Friday's official close of 6.7599.
Hong Kong Stocks climb 1%
The Hong Kong stock market finished session firmly higher, on hopes of fresh reform measures from mainland leaders amid the opening of China Communist Party's sixth plenum in Beijing. Meanwhile buying was propelled up ahead to the start of the corporate earnings season. However, gains on the topside capped as comments from a Federal Reserve official boosted bets of a rate hike by year-end. The Hang Seng Index added 0.98% or 229.68 points to 23604.08, while the Hang Seng China Enterprises Index inclined 1.72% or 166.52 points to 9852.90. Turnover increased to HK$74 billion from HK$50.4 billion on Thursday. The local market closed on Friday due to a typhoon.
BOCHK (02388) shot up 4% to HK$28.15. It was the best blue-chip winner. It was reported that BOCHK has signed an agreement to sell its stake in Chiyu Bank to Xiamen International Bank for US$3 billion. But insiders later denied the report.
HSBC (00005) added 1% to HK$59.4 after JP Morgan's target price hike. Standard Chartered Bank (02888) also jumped 3% to HK$67.05.
Mainland banks were generally higher. BOC (03988) climbed 3% to HK$3.58. CCB (00939), ICBC (01398) and ABC (01288) also gained 2% to HK$5.83, HK$4.81 and HK$3.3. PSBC (01658) slid 3% to HK$4.6, dipping below its IPO price of HK$4.76 as the stabilization period ends.
Indian Market gains
Trading for the week started on a positive note as key benchmark indices settled with small gains as firmness in global stocks boosted sentiment. The barometer index, the S&P BSE Sensex rose 101.90 points or 0.36% to settle at 28,179.08. The Nifty gained 15.90 points or 0.18% to settle at 8,708.95.
Stocks of public sector banks were mostly higher. Stocks of private sector banks were mixed. Auto stocks gained. Shares of two-wheeler makers declined. Stocks of public sector oil marketing companies edged higher. Stocks of oil exploration & production (E&P) firms were mixed. ONGC edged higher after the company said its board of directors will consider a proposal for declaration of bonus issue, if any, in a meeting scheduled on 27 October 2016. Wipro declined after reporting weak Q2 September 2016 results.
Elsewhere in the Asia Pacific region: Indonesia's Jakarta Composite index grew 0.2% to 5421. Taiwan's Taiex added 0.2% to 9322.50. South Korea's KOSPI index rose 0.7% to 2047.74. Malaysia's KLCI was up 0.5% at 1677.76. Singapore's Straits Times index added 0.9% to 2856.68. New Zealand's NZX50 closed for national holiday.
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