Profit taking triggered across the regional bourses after remarks from Federal Reserve officials (St. Louis Fed president James Bullard, Dallas Fed president Richard Fisher and Richmond Fed president Jeffrey Lacker) increased speculation about whether the Fed will start to taper its bond-buying program this month.
James Bullard, the president of the Fed's St Louis branch, said in a speech at the CFA Society of St. Louis on Monday, that a small taper of the $85 billion a month asset-purchase program might be a possibility as policymakers wrestle with how to respond to signs of improvement in the world's biggest economy. Richmond Federal Reserve Bank President Jeffrey Lacker and Dallas Fed President Richard Fisher also said they think the central bank will soon consider a taper.
A strong third-quarter growth report and surprisingly upbeat November jobs data last week boosted speculation the Fed may start reeling in its stimulus scheme after a policy meeting next week.
The stimulus has been credited with buoying global equity markets since it was introduced last September. The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013.
Investors digested a raft of Chinese economic reports. Data released on Tuesday showed Chinese November retail sales beat estimates while industrial output matched market expectations. Figures from the National Bureau of Statistics showed that retail sales rose 13.7% year on year in November, accelerating from the 13.3% growth recorded in October. On the other hand, industrial production growth softened in November, with industrial value-added output expanding 10% year on year, slightly lower than 10.3% expansion in October. Also, the NBS said that fixed asset investment, a measure of government spending on infrastructure, expanded 19.9% year on year in the first 11 months of this year. That compared with an increase of 20.1% for the first 10 months, indicating a slowdown in growth. The data follows stronger-than-expected trade figures released at the weekend and confirmed hopes that the world's second-largest economy can sustain its positive trend into year-end.
Among Asia bourses, shares on the Japanese financial market declined, as investors opted for profit booking after sharp rally in the previous session. The benchmark Nikkei Stocks Average declined 38.90 points to 15611.31, while the broader Topix index rose 1.01 points to 1256.33.
Financial shares as well as some tech names were under pressure in Tokyo, including Trend Micro Inc shares, which fell 2.6% following their 3% surge on Monday, and Sumitomo Mitsui Financial Group Inc as its stock lost 0.4%.
Japanese real estate developers rose as money shifted from exporters to domestic demand stocks. Mitsui Fudosan rose 1.5% and Mitsubishi Estate added 2.2%.
In economic news, Japan's tertiary industry activity was down a seasonally adjusted 0.7% in October compared to the previous month, the Ministry of Economy, Trade and Industry said on Tuesday, standing at 99.6. The index came in following the 0.2% contraction in September. Industries that moved lower included finance, real estate, accommodations, miscellaneous services, retail, communications and scientific research. Industries that moved higher included utilities, health care and transportation. Learning support was flat.
In Australia, Australian share market erased early gains to finish edge lower as investors electing to pull back their positions ahead of Chinese data due out after the bell. The benchmark S&P/ASX 200 index declined 0.8 point to finish at 5143.60, while All Ordinaries Index slipped by 2.20 points to 5146.20.
Australian major banks and financials shares were mostly higher after Australian Bureau of Statistics figures showed the number of home loans approved in October rose 1% the highest monthly level on record. Among top banks, Commonwealth Bank rose 0.5% to A$75.26, Australia & New Zealand Banking Group 0.1% to A$30.78 and Westpac Bank 0.3% to A$31.19. National Australia Bank closed steady at A$33.17.
Insurance group QBE declined another 9.8% to A$10.82, after dumping 22.3% the day before after emerging from a trading halt to warn it would suffer an expected $US250 million loss this financial year due to weakness in its North American business. The news was driven by $600 million in goodwill write downs stemming from the North American business due increased claims as a result of weaker-than-expected US crop yields and prices. QBE expects its insurance profit margin to fall from 8% to 6%.
Shares of mining companies closed mixed, with BHP Billiton rose 0.1% to A$36.82, as chief executive Andrew MacKenzie talked up the company's productivity agenda. Rio Tinto fell 0.5% to A$66.17, despite the spot price of iron ore, landed in China, strengthening to $US139.40 a tonne. Energy Resources Australia lost 11.5% to A$1.01, as the government put a ban on processing at its Ranger uranium mine. ERA dumped 12.7% the day before following a containment breach over the weekend.
Woodside Petroleum, added 0.5% to A$37.57, as chief executive Peter Coleman said the company had other development options if a planned $US1.25 billion investment in an Israeli gas field, which has been hit by delays, does not go ahead.
Brambles (BXB) spun off its US based information and document management division Recall Holdings (REC) today into a separate listed company. BXB shares fell 4.5% to A$8.86 on the spin-off while REC closed at A$4.50.
On the economic front, business conditions are at a 15 month high according to the latest survey. The NAB business confidence index eased from +6.1 to +5.3 in November. The business conditions index improved from minus 3.6 points to a 15-month high of minus 2.7 points. The survey was conducted from November 25 to 29.
In China, Mainland China share market closed mixed after latest data showing strong retail sales but moderate growth in industrial production and urban investment. The Shanghai Composite fell 0.71 point to finish at 2237.49, while the CSI 300 Index rose 2.45 points to close at 2453.32.
Figures from the National Bureau of Statistics showed that retail sales rose 13.7% year on year in November, accelerating from the 13.3% growth recorded in October. On the other hand, industrial production growth softened in November, with industrial value-added output expanding 10% year on year, slightly lower than 10.3% expansion in October. Also, the NBS said that fixed asset investment, a measure of government spending on infrastructure, expanded 19.9% year on year in the first 11 months of this year. That compared with an increase of 20.1% for the first 10 months, indicating a slowdown in growth.
The retail sales data for November came after strong export and benign inflation figures for the month as China's economy - a driver of global and regional growth - shows signs of strength after a slump in the first half of the year.
Figures on Monday showed Chinese inflation slowed to 3.0% in November, after two months of acceleration in consumer prices, well under the government's target for the year of 3.5%. On Sunday, the General Administration of Customs said exports accelerated 12.7% year-on-year in November while import growth weakened, fuelling the country's biggest trade surplus in nearly five years.
Shares of Shipbuilders were mixed on news that Beijing will extend aid to ailing shipbuilders with a fresh batch of "special funds" for acquiring new vessels. China Shipping Development rose nearly 1% while China Shipping Haisheng fell 1%.
In Hong Kong, shares in the Hong Kong market declined in narrow trade, as investors opted for profit booking after a string of speeches by three Federal Reserve presidents suggested that the U.S. central bank could start to scale back its $85-billion-a-month stimulus program as early as this month.
Among the HK 50 blue chips, 18 stocks rose and 29 fell, with three stocks remaining steady. Kunlun Energy (00135) was the biggest blue-chip winner, gaining 3.3% to HK$14.34. China Coal (01898) was the biggest blue-chip loser, slipping 2.4% to HK$4.93 after Macquarie downgraded the stock to "neutral". China Shenhua (01088) also softened 0.6% to HK$25.55.
Market heavyweights were lower. HSBC (00005) was down 0.4% to HK$83.9 after the bank said it has no plans to split off its retail banking in the UK, while China Mobile (00941) slid 1% to HK$84.05 on Barclays Research's downgrade.
The water and environment sector was up. CTEG (01363) soared 7.4% to HK$3.78. China EB Int'l (00257) shot up 1.9% to HK$9.08.
In India, Indian benchmark indices finished lower in choppy trade after hitting an all-time high on Monday, on heightened speculation that the Federal Reserve may be about to start cutting back on its stimulus program. The barometer index, the S&P BSE Sensex, was provisionally down 76.39 points or 0.36%, up close to 75 points from the day's low and off about 80 points from the day's high. From the 30-share Sensex pack, 21 stocks fell and rest rose. ICICI Bank (down 3.56%), SBI (down 2.45%) and Coal India (down 1.58%) edged lower. Hero MotoCorp rose 4.1% to Rs 2210.10 after hitting 52-week high of Rs 2214.70 in intraday trade.
Shares of power generation and power distribution firms edged lower after the Central Electricity Regulatory Commission (CERC) tightened certain rules for tariffs and operations for the sector in its draft 2014-19 guidelines. Tata Power Company (down 2.8%), Torrent Power (down 5.1%), Adani Power (down 4.43%), Power Grid Corporation of India (down 3.31%), Reliance Infrastructure (down 1.78%), NHPC (down 1.37%), and Reliance Power (down 2.97%) declined.
Tech Mahindra rose 2.29% after the company today, 10 December 2013, announced the launch of its Global Center of Excellence (CoE) with Hewlett Packard (HP) in Bangalore. This Center will focus on IT application and IT infrastructure performance management solutions that transform customers' IT operations landscape through automation and unification of key services, Tech Mahindra said in a statement.
Elsewhere in the region, South Korea's KOSPI fell 0.35% after enjoying a 1% rally in the previous session as investors booked profits on large-cap stocks. New Zealand's NZX50 index fell 0.25%. Taiwan's Taiex index ended edge 0.01% down. Singapore's Straits Times index fell 1%. Malaysia's KLSE Composite rose 0.1%. Indonesia's Jakarta Composite index grew 1.45%.
Powered by Capital Market - Live News
