The China Bureau of Statistics said on Wednesday that China's consumer price index rose 2.3% in June from a year earlier, shy of the consensus forecast of 2.4%, and compared with 2.5% in May, a sign economic activity may be cooling. The nation's producer-price index declined 1.1% in June, compared with a 1.4% decline in May.
Market participants are awaiting for two key events for cues regarding market direction. Later today, the U.S. Federal Reserve will release minutes of its latest policy meeting, and European Central Bank officials including President Mario Draghi are scheduled to speak.
Upbeat June U.S. employment data last week prompted some Wall Street economists to predict the Fed would raise interest rates earlier than previously thought. But yields have fallen since then, with investors cautious about the strength of the recovery.
Disappointing German economic data on Tuesday kept the investors to look Draghi for signs the ECB could ease policy further to support the euro zone economy.
Among Asian bourses
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Australia stocks fall on weak global cues
Australian share market finished the session steep lower today, registering third day of fall in row, as risk sentiments hammered on tracking negative lead from Wall Street overnight. Meanwhile, selloff pressure intensified after disappointing local consumer confidence data and weaker than expected Chinese inflation data. Except bullion, all ASX sectors closed down, with shares in materials, energy, industrials, financial and consumer discretionary sectors being the biggest drags. The benchmark S&P/ASX200 erased 1.06% to 5452.50, while the broader All Ordinaries de-grew 1.02% to 5442.20.
The Westpac - Melbourne Institute consumer sentiment index rose 1.9% to 94.9 points in July. Market economists were generally disappointed that there has not been a stronger rebound in consumer confidence.
Consumer-discretionary stocks led broad-based falls, with education services provider, Navitas, diving 31% to A$4.86 after losing a major contract with Macquarie University. Woolworths dropped 1.2% to A$35.89, Harvey Norman 1.6% to A$3.11 and Billabong 1.1% to A$0.47.
Shares of material and resources companies declined on renewed negative sentiment about the outlook for China. Resources giant BHP Billiton dropped 0.9% to A$37.25. Rio Tinto slid 0.4% to A$62.14. Junior iron ore miner Fortescue Metals Group was down 1.8% to A$4.38.
Financial stocks declined, with big four lenders leading losses. Westpac Banking Corp declined 1.1% to A$33.85, ANZ Banking Group 1.2% to A$33.18, National Australia Bank 1% to A$33.27, and Commonwealth Bank of Australia 0.7% to A$80.79.
Japan stocks decline for third day
Japan share market finished the session marginal lower, as weakness on Wall Street overnight and the dollar's decline invited profit-taking for the third straight session. The bargain-buying from the value-based investors in the afternoon session, following the initial selloff, helped to cap losses. The benchmark Nikkei 225 index slipped 0.08%, or 11.76 points, to finish at 15,302.65, while the Topix index of all first-section issues ended down 0.38%, or 4.88 points, at 1,270.82.
Shares of export related companies declined on tracking yen strength against the dollar. In foreign exchange trade, the dollar fetched 101.59 yen on Wednesday against 101.57 yen in New York. Toyota Motor Corp slid 1.1% to 6,062 yen. Panasonic Corp., which gets about half of sales overseas, fell 1.1% to 1,227 yen.
Shippers retreated after the Baltic Dry Index, a measure of commodity freight rates, fell 0.8% yesterday. Nippon Yusen K.K., the largest company in the sector, dropped 1% to 294 yen. Mitsui OSK Lines Ltd., the No. 2, slid 1.3% to 378 yen. Kawasaki Kisen Kaisha Ltd. slipped 0.9% to 219 yen.
Shares of securities brokerages players stumbled on worry about falling commissions that tend to accompany weaker markets. Nomura Holdings fell 2.5% to 698 yen, Daiwa Securities Group lost 1.5% to 869 yen, and Matsui Securities slipped 0.8% to 998 yen.
Shares of Kao Corp rose 1.7% to 4151 yen after the Goldman Sachs hiked its target price for home consumer product maker to Y3,950 from Y3,900, citing expectations for the firm to exceed its first fiscal half earnings guidance and for continued share buybacks.
Shares of apparel retailer Pal added 14% after glowing appraisals of the firm's first-quarter earnings results showing a sales rise of 9% on year to Y26.0 billion and operating profit jump of 30%, exceeding many forecasts.
Airline ANA Holdings advanced 1.7% to 244 yen, following its announcement that its May international passenger total surpassed that of rival Japan Airlines for the first time.
Bridgestone advanced 1.6% to 3,720 yen after the Japan Automobile Tyre Manufacturers Association said new vehicle tire sales rose 4.5% in June compared with the previous year.
China stocks fall on inflation data
Mainland China market declined, with technology and health-care companies leading retreat amid lingering concern the slowing economy will hurt earnings growth and disappoint investors. Meanwhile, disappointing Chinese inflation data intensified selloff pressure in the local bourse. The benchmark Shanghai Composite was down 1.23% to 2038.61. Trading turnover increased to 97.18 billion yuan from yesterday's 81.49 billion yuan.
Among SSE sectors, all 10 sectors of the SSE index declined. The information technology issue was leading losses, with a fall of 2.23%, followed by healthcare down 1.91%, consumer staples down 1.69%, energy down 1.58%, financials down 1.27%, utilities down 1.25%, consumer discretionary down 1.1%, materials down 1.1%, industrials down 1% and telecom down 0.9%.
Shares of lenders declined after China Central Television reported some banks in China help clients move dirty money overseas and violate the nation's forex regulations through some forex products. Bank of China lost 0.8% and Industrial & Commercial Bank of China dropped 1.4%.
China's yuan appreciated from prior day closure against greenback today after the People's Bank of China fixed its daily midpoint 0.1% harder against the dollar from prior day parity. In spot market trade, the yuan closed today's trading at 6.1990/96 against the US dollar.
The People's Bank of China has set the daily reference rate at 6.1565 against the greenback on Wednesday, as compared 6.1626 set prior day, according to the data released by the China Foreign Exchange Trading System. Effective from 17 March 2014, the yuan is allowed to trade at 2% on each side of the central parity rate. The yuan's highest exchange rate against the U.S. dollar was set on 14 January 2014, when the yuan stood at 6.0930 against per U.S. dollar.
Hang Seng falls on China data US losses
Hong Kong share market declined to the lowest closing level in about two weeks, dragged down by banks and tech stocks, on tracking losses in the U.S. markets overnight and weaker than expected China's consumer inflation data. The benchmark Hang Seng Index closed 1.55% down at 23176.07. Turnover rose to HK$64 billion from HK$51.2 billion on Tuesday.
Among the HK 50 blue chips, 44 fell and 4 rose, with two stocks remaining steady. Sino Land Co declined 4.2% to HK$12.46, contributing 5-points losses to the benchmark Index and becoming the worst-performing blue chip. Belle International Holdings Co advanced 0.34% to HK$8.79, becoming the best-performing blue chip.
Macau gaming counters fell across the board after Standard Chartered Plc downgraded gaming stocks. Standard Chartered cut the casino operators' equity ratings to inline from outperform. Sands China (01928) and Galaxy Ent (00027) slipped 2.9% and 2.3% to HK$57.25 and HK$62.4. Wynn Macau (01128) dropped 4.1% to HK$29.5.MGM China (02282) and Melco (00200) sank 1.6% and 2.7% to HK$27.5 and HK$23.4. Second-liner gaming stocks were also dragged down. Macau Legend (01680) plunged 7.2% to HK$4.93.
Shares of Mainland China lenders declined after China Central Television accused the bank of money laundering. BOC (03988) was weakened by 2.8% to HK$3.49. ABC (01288) fell 2.2% to HK$3.52. CCB (00939) and ICBC (01398) descended to HK$5.56 and HK$4.95.
Mainland developers extended yesterday's drop, with China Resources Land falling 1.8% to HK$15.10 and China Overseas Land & Investment retreating 1.7% to HK$20.20. Hong Kong real estate companies also fell after BNP Paribas SA said in a report that Hong Kong's nominal property prices may drop 20% by the end of 2016 as low global interest rates and money flows reverse. Sino Land Co. sank 4.2% to HK$12.46.
Global Brands (00787), the spinoff of Li & Fung (00494), debuted today. It ended at HK$1.8, or 14% below its opening price. Li & Fung slipped 2.3% to HK$10.1.
Sensex drops ahead of Budget
Indian stock market fell for the second day in a row after the Economic Survey 2013-14 presented by Finance Minister Arun Jaitely as precursor to tomorrow's Union Budget 2014-15 stated that the fiscal situation of the central government is worse than it appears. The S&P BSE Sensex lost 137.30 points or 0.54% to settle at 25,444.81, its lowest closing level since 30 June 2014. The CNX Nifty fell 38.20 points or 0.50% to settle at 7,585, its lowest closing level since 27 June 2014.
The Economic Survey 2013-14 said that the fiscal situation of the central government is worse than it appears, given the acceleration of inflation from 2006 to 2014. These inflation shocks effectively reduced the value of outstanding debt. This has harmed the interests of households but has reduced the debt burden of the government. These inflation shocks are unlikely to recur in the future, the survey said. According to the survey, a fresh thinking on a responsible fiscal policy framework is required. This should feed into a new FRBM Act. The modified act needs take into account business cycles and to have penalties that are strong enough so that it cannot be ignored, the survey said.
The survey has suggested fiscal consolidation through higher tax-GDP ratio, shifting subsidy programmes away from price subsidies to income support and a simple, predictable and a stable tax regime consisting of a single-rate goods and services tax (GST), fewer exemptions in direct taxes and a transformation of tax administration.
Hindalco Industries rose after US based aluminum major Alcoa Inc reported better-than-expected Q2 June 2014 earnings on Tuesday, 8 July 2014. Auto stocks declined. Tata Motors fell as the stock turned ex-dividend today, 9 July 2014, for dividend of Rs 2 per share for the year ending March 2014. Most bank shares edged lower. Real estate stocks declined.
Elsewhere in the Asia Pacific region- Taiwan's Taiex index was down 0.43% to 9489.98. South Korea's KOSPI index sank 0.31% to 2000.50. Malaysia's KLSE Composite was down 0.08% to 1891.16. Singapore's Straits Times index fell 0.24% to 3275.46. New Zealand's NZX50 fell 0.84% to 5122.74. Indonesia's market closed for holiday.
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