Headline indices of the Asia Pacific share market closed modestly higher on Wednesday, 27 August 2014, as investors risk appetite buoyed record high close of US benchmark S&P500 index overnight and amid expectations that further monetary stimulus in the euro zone. The MSCI Asia Pacific Index gained 0.3% to 148.73
Regional shares took a strong lead from Wall Street after Solid consumer confidence data and easing geopolitical tensions pushed US benchmark S&P500 index above 2000 points for the first time in its history on Tuesday.
Meanwhile, market gain also aided by speculation of further policy stimulus in the euro zone after the European Central Bank mulls further easing monetary policy. European Central Bank president Mario Draghi commented last week in Jackson Hole, Wyoming, that the ECB is set to implement more monetary stimulus measures to prop up the flagging European Union economy and to ward off the threat of deflation in the bloc. The comments have raised expectations that the ECB could announce even more monetary policy stimulus over coming months. The prospect of yet further lashings of liquidity in Europe was taken as a positive for emerging markets.
Several investment banks have adjusted their forecasts of ECB's QE timeline. Deutsche Bank forecasts that the ECB would introduce 'private' QE in September, compared with previous forecast that any QE program would begin early next year. Nomura now expects the ECB to cut the main refi rate and the deposit rate by -10 bps in either September or October. It noted that there is now a 30% chance of QE this year, up from previous estimate of 25%.
Hamas and Israel agreed on a longer-term ceasefire. Brokered by Egypt, the terms of the agreement weresimilar to those set at the end of 2012 conflict. For instance, Israel will open crossings on its border to allow humanitarian aid and construction materials to enter Gaza, and will extend the permitted fishing zone to six miles off the coast of Gaza. Tensions between Ukraine and Russia remained. Despite the meeting between Petro Poroshenko and Vladmir Putin at a trade summit in Minsk, there was no sign of progress being made.
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Markets also kept a wary eye on developments in Ukraine after Russia President Vladimir Putin met Ukraine's Petro Poroshenko for two hours of one-on-one talks after six hours of wider negotiations with European Union officials. Poroshenko said a roadmap would be prepared to agree to a ceasefire as soon as possible in east Ukraine, while Putin emphasised it was up to Kiev to work out conditions with separatist rebels.
Among Asian bourses
Nikkei close up 0.1%
Headline indices of the Japanese share market advanced as risk sentiments buoyed by yen depreciation against the dollar and record high close of Wall Street overnight. But gain on the Tokyo market was marginal as participants remained cautious about the future of the Japanese economy. The benchmark Nikkei 225 index closed 13.60 points, or 0.09%, to 15534.82. The Topix index of all first-section issues was up 0.07%, or 0.91 points, at 1,285.92.
Shipping stocks advanced in Tokyo after media reports that shipping company is set to double ROE to 10% by fiscal year 2019. Kawasaki Kisen gained 3.3% to 251 yen after Credit Suisse Group AG raised its rating for the company to outperform from underperform with its price target lifted to 290 yen from 200 yen.
Retailer stocks closed weaker. Ryohin Keikaku Co., the operator of Muji brand stores, slid 0.9% to 11,930 yen after dropping 4.9% yesterday. Convenience-store operator Lawson Inc. lost 0.7% to 7,570 yen.
Otsuka Holdings stocks jumped 7.5% to 3,645.5 yen, after drugmaker announced plans to increase dividend payments to 100 yen a share in 2015 and be flexible about share buybacks. JPMorgan Chase & Co. and Nomura both raised their investment ratings and target prices on the stock.
Convenience store operator FamilyMart lost 0.9% to 4310 yen, hurt by ex-dividend selling and a separate Nomura downgrade to neutral from buy citing increasing competition and costs associated with the firm's ambitious store expansion plan.
All Ordinaries ends higher
Australian share market closed modestly higher in volatile trade, on the back of positive cues offshore market overnight, led by shares of mining and financial companies. But gain on the market was limited as Australian Bureau of Statistics data showed that total construction work carried out in the June quarter slipped 1.2%, registering third quarterly decline in a row. The benchmark S&P/ASX 200 Index closed 13.60 points higher at 5651.20 and the broader All Ordinaries Index rose 14.40 points to 5648.90.
The financial sector advanced, with big 4 lenders being the biggest gainer. Commonwealth Bank of Australia rose 0.5% to A$81.12, Westpac Banking Corp 0.6% to A$35.12, ANZ Banking Group 0.7% to A$33.54 and National Australia Bank 0.7% to A$34.80. Insurance broker and underwriter Steadfast Group was up 14.8% to A$1.59 after the company full-year results that topped forecasts and confirmed it has made a A$55 million bid for smaller rival Calliden.
Energy stocks closed mixed. Australia's biggest oil producer Woodside Petroleum fell 2.6%, or A$1.16, to A$42.98 as it traded without rights to its A$1.11 interim dividend. Rival oil and gas producer Santos added 0.1% to A$15.11 despite trading without the rights to 20 cents interim dividend.
Construction and property group Lend Lease gained 1.5% to A$13.95 after reporting a 50% jump in full-year profit after selling its stake in a British shopping centre.
Building materials supplier Boral jumped 4.5% to A$5.63 after showing a bigger than expected profit as it swung back from a loss.
Engineering group WorleyParsons added 4.1% to A$17.88 as it showed that net profit fell 23% over the 12 months to June, and confirming the company slashing 1700 jobs over the period.
Telecommunication giant Telstra Corporation dropped 21 cents to A$5.53 after trading without the rights to its 15 cents per share final dividend.
Shanghai Composite rises 0.1%
Mainland China share market closed higher for the first time in three consecutive sessions, with shares of technology and military related stocks being biggest gainer. However, gain on the benchmark measure was limited on caution over coming initial public offering. The benchmark Shanghai Composite rose 2.36 points, or 0.11%, to 2209.47 at the close. Turnover decreased to 104.09 billion yuan from Tuesday's 134.41 billion yuan.
The Shanghai Securities News said that ten companies that will start to market IPO shares this week, including HMT Xiamen New Technical Materials Co. and Hubei Feilihua Quartz Glass Co., may freeze about 800 billion yuan ($130 billion). Of the 10, four announced plans to raise almost 4 billion yuan in their IPOs in Shanghai.
Shares of defense and aerospace industry gained ground after China's Liaoning carrier recently completed its aircraft series by the introduction of a new helicopter. The military sector is also boosted by the central government's latest command to consolidate China's national defense. Xi'An Aero-Engine roared the daily maximum of 10% to 28.37 yuan, while Jiangxi Hongdu Aviation Industry surged 6.3% to 18.50 yuan.
Shares of technology companies advanced in Beijing after China's Ministry of Industry & Information Technology said on Tuesday that it will improve telecommunication services, which benefits relevant companies. China National Software & Service rose 4% to 27.26 yuan and Aerospace Communications Holdings Co gained 2.6% to 14.78 yuan.
Electric car maker shares went up on reports that China is considering providing as much as 100 billion yuan ($16 billion) in funding to build more electric-car charging facilities. Support for the electric-car industry forms part of Premier Li Keqiang's push to rein in pollution in China, the world's biggest carbon emitter, while moving forward at the same time with goals of urbanizing the country. The electric-car maker BYD Co gained 2% to 50.33 yuan.
Hang Seng falls 0.62%
Hong Kong share market closed lower for second consecutive session after reversing earlier gains on Wednesday, 27 August 2014, as profit-takers cashed in after the market hit a six-year high at the start of the week. The Hang Seng Index fell 0.62% to 24918.75 at the close, erasing gains of as much as 0.3%. Market turnover stood at HK$67.55 billion, up from HK$64.47 billion on Tuesday.
Macau gaming stocks declined amid renewed pressure as more than 1,000 casino staffers have recently taken to the street, asking for better wages and benefits. Barclays has issued a research report lowering the gaming industry's revenues and target prices for the casino operators. Morgan Stanley halved its 2014 Macau gross gaming revenue growth forecast to 6%, implying a 1% year-on-year drop in the second half. Galaxy Ent (00027) fell 2% to HK$59.2. Sands China (01928) edged down 0.8% to HK$52. MGM China Holdings dropped 1.5% to HK$26.25.
Utilities shares bumped up after the NDRC announced to cut on grid tariff starting September. Brokers said IPPs rebounded as the notice removed overhang. Datang Power (00991) bounced 3.4% to HK$4.24. CR Power (00836) added 1% to HK$23.95 even its president Yu-Jun Wang was under investigation.
Guangzhou R&F Properties sank 3.6% to HK$9.68 after rating downgrade from brokerage houses. Bank of China International and UOB-Kay Hian downgraded their ratings to sell after the company yesterday reported a 26% decline in first-half net profit and cut its sales target.
China Agri-Industries slumped 11% to HK$3.19 after predicting a net loss of HK$664 million ($86 million) in the seven months to July 31.
Sensex ends with a firm note
Indian stock market closed higher amid expectations that further monetary stimulus in the euro zone could trigger more foreign fund flows to emerging markets. The market sentiment was also boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. The Sensex closed 0.44%, or 117.34 points, up at 26,560.15 points, while the Nifty ended 0.40%, or 31.30 points, up at a fresh high of 7,936.05 points.
Tata Motors gained 1.85%. The company after market hours on Tuesday, 26 August 2014, said that it would be filing an appeal against the CCI order before the appropriate authorities. The penalty levied on Tata Motors is Rs 1346.46 crore.
DLF tumbled 4.28% on reports the Supreme Court today, 27 August 2014, penalised the company Rs 630 crore for exploiting its dominant position to the disadvantage of its customers in three projects in Gurgaon. The court said that DLF will deposit Rs.50 crore of the Rs 630 crore within three weeks and the balance of Rs 580 crore within three months from today. The court directed the registry to put this amount in a fixed deposit in a nationalised bank.
MCX jumped 5.34% after the company during market hours said that the commodities market regulator Forward Market Commission (FMC) has approved Kotak Mahindra Bank's (KMBL) proposed acquisition of upto 15% of equity share capital of MCX. In July 2014, Financial Technologies (India) (FTIL) entered into a share purchase agreement (SPA) to sell 15% stake in MCX to Kotak Mahindra Bank for a total consideration of Rs 459 crore.
Elsewhere in the Asia Pacific region-- South Korea's KOSPI index rose 0.33% to 2074.93. Taiwan's Taiex index gained 0.98% to 9485.59. New Zealand's NZX50 added 0.93% to 5243.70. Singapore's Straits Times index jumped 0.55% to 3341.46. Indonesia's Jakarta Composite index rose 0.36% to 5165.25. Malaysia's KLCI climbed .57% to 1872.38.
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