Asia Pacific share market advanced on Wednesday, 26 November 2014, as risk appetite continued to cheer by better-than-expected U.S. growth data and China's interest rate cuts on Friday. The MSCI Asia Pacific Index added 0.4% to 141.28.
Regional bourses commenced trading today with front footing, thanks to positive US GDP report. Gross domestic product (GDP) in the world's largest economy was revised up to 3.9% annual rate in the July-September period, faster than the 3.5% that was initially reported, underlining its status as the only major economy that is gathering momentum.
The upbeat momentum also supported by China's surprise cut in interest rates at the end of last week -- the first such move in more than two years by China's central bank. The People's Bank of China trimmed its benchmark lending rate by 0.40% to 5.6%, and deposit rate was cut by a smaller 0.25% to 2.75%.
But gain on the upside was limited on caution ahead of an Organization of Petroleum Exporting Countries meeting in Vienna on Thursday that has investors considering prospects for the first reduction in production quotas since 2008 to shore up prices.
Among Asian bourses
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Aussie market surges 1.2%
Australian share market closed sharp higher on Wednesday, 26 November 2014, on broad based gain across the sectors, with mining and financial stocks being major gainer after Reserve Bank of Australia has painted an optimistic picture of the economy and left the door open on further rate cuts. The S&P/ASX 200 index jumped 61.40 points, or 1.15%, to 5396.20 and broader All Ordinaries index closed 59.40 points, or 1.12%, to 5380.30.
The RBA deputy governor Philip Lowe's commented on the Australian Business Economists annual dinner that the RBA still thinks the Aussie remains too high and it will depreciate as the terms of trade decline.
Shares of mining companies were mostly higher. Resources giant BHP jumped 1.3% to A$32.53, while Rio Tinto, Australia's biggest iron ore miner, rose 1.7% to A$58.39. Iron ore miners closed down after iron ore prices slumping to a fresh five-year low. Fortescue Metals Group, the third-largest exporter of the steel-making commodity, fell 0.7% to A$2.71, Atlas Iron fell 4.4% to A$0.195, and ARRIUM slipped 2% to A$0.245.
The major banks were higher after the RBA deputy governor Philip Lowe's comments on interest rate cut. Westpac Banking Corp rose 1.4% to A$33.07 and ANZ Banking Group climbed up 0.9% to A$32.38. Commonwealth Bank of Australia added 1.1% to A$81.01 and National Australia Bank rose 1% to A$32.46.
Medibank Private shares dropped 4 cents, or 1.9%, on their second day of trade to close at A$2.10. Retail investors bought shares for $2 as part of the health insurer's IPO, while institutional investors paid A$2.15. Credit Suisse said in a note to clients the stock was overpriced, and gave it a value of A$2.10.
Webjet shares slipped 1.3% to $3.10 after the travel company warned that the domestic travel market is likely to remain flat for the rest of the current financial year. However, Webjet is forecasting a modest improvement in pre-tax earnings to $27 million, up from $23 million in the previous corresponding period.
Ausdrill shares plunged 10.9% to A$0.45 after the drilling companies announced it would lose A$28 million in revenue after one of its clients, Resolute Mining, said it plans to defer expansion work at one of its miners. Resolute Mining shares rose 19.6% to A$0.28.
Nikkei ends softer on profit booking, strong yen
Japanese share market finished slight down, as investors elected to book part profit after yesterday closing at the highest level since 2008 and on caution ahead of Ahead of OPEC Meeting tomorrow. A weakening dollar also invited profit-taking. The Nikkei 225 Stock Average declined 0.14% to 17383.58.
Shares of real estate developers were down as profit taking triggered on concerns about the inflationary effect of a weaker dollar/stronger yen. Mitsui Fudosan fell 1.9%, Sumitomo Realty lost 2.5%, and Toyo Tatemono slipped 2.8%.
Energy stocks were also down on tracking drop in crude prices, with Inpex dropping 2.2%. JX Holdings and Showa Shell Sekiyu slid 0.9% and 1.5%, respectively, after both were downgraded by SMBC Nikko Securities, citing oil price weakness, among other factors. For Showa Shell, SMBC also noted likely shipment delays for solar panels as a number of major electricity producers suspend their work on connecting megasolar firms to the grid.
Japanese maritime shippers rose as weaker crude translates into cheaper fuel costs for the industry. Nippon Yusen added 2.2% while Mitsui OSK Lines gained 0.8%.
Shares of aluminum producers also rose on reports that Toyota Motor will use more aluminum instead of steel in the bodies of its luxury automobiles starting in 2017, and plans to invest several billion yen to set up assembly lines exclusively for aluminum parts. Nippon Light Metal and UACJ, two of the major suppliers in the field, rose 6.5% and 8.7%.
Shanghai Composite closes above 2600 level
Mainland China share market advanced for fifth straight, as appetite for risk assets continued receiving blood by last week's surprise cut in interest rates, with railway and brokerage stocks being major gainers. The Shanghai Composite ended 36.75 points, or 1.43%, higher at 2604.35, registering the first close above 2600 since August 2011. Full-day turnover was strong, with 33.71 trillion shares changed hand worth of 316.52 trillion yuan. The benchmark index has accumulated 6.2% over the last five sessions.
Shares in railway companies advanced amid reports of China's top planner approving four railway projects with total investment worth 66 billion yuan ($10.76 billion). China Railway Construction Corp. added 1.1% and China Railway Group added 1.2%.
Brokerages shares also climbed on reports that Shanghai will start trials of reverse mortgages and tax-deferred pension schemes by the end of next year. Sinolink Securities jumped 5.6%. Citic Securities climbed 3.4%. Everbright Securities Co. climbed 10% and China Everbright Bank Co. advanced 7%.
Hang Seng zooms 1.12%
Hong Kong share market closed sharply higher on Wednesday, 26 November 2014, on tracking boost from gain in the mainland A-shares and better-than-expected U.S. growth data. The Hang Seng Index advanced 268.07 points, or 1.12%, to 24111.98, off an intra-day high of 24176.64 and low of 23799.42. Turnover declined to HK$87.60 billion from HK$89.04 billion on Tuesday.
As of market close, the northbound quota balance was RMB9.71bn, while the southbound quota balance was RMB10.29bn, accounting for 75% and 98% of the daily allowed quotas respectively.
Shares in insurance companies climbed up sharply after Shanghai unveiled reform and development policies for the industry. China Life (02628) surged 7.2% to HK$26.8. It was the top blue chip winner. NCI (01336) also added 8.5% to HK$35.1. PICC Group (01339) shot up 8% to HK$3.75. CPIC (02601) jumped 6.2% to HK$32.35.
Soft oil prices continued to pressure oil majors. CNOOC (00883) and PetroChina (00857) slipped 0.9% and 0.1% to HK$12.08 and HK$8.76. Li & Fung (00494) dipped 1.3% to HK$8.69. It was the worst blue chip performers in the day.
Sensex ekes out small gains
Indian stock market closed higher on continued hopes the central bank would ease monetary policy to boost economic growth. The Sensex provisionally closed 0.17%, or 48.14 points, lower at 28386.19 points, while the National Stock Exchange's broader barometer 50-share CNX Nifty jumped 0.15%, or 12.65 points, to end at 8475.75 points.
Aurobindo Pharma fell 2.6% after the company announced plans to raise $350 million by selling securities to finance expansion. Financial Technologies (FTIL) gained 4.5% to after it sold its holding in MCX Stock Exchange Ltd (MCX-SX), completing its exit from all its exchanges in the country.
Stocks of real estate companies based in National Capital Region surged after the urban development ministry approved higher ground coverage and floor area ratio in the capital city, which would allow developers to build taller buildings in the same area. Anant Raj gained 9.7%, DLF up 7.2% and Unitech up 4.4%.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.07% to 9122.39. South Korea KOSPI was up 0.03% to 1980.84. New Zealand's NZX50 grew 0.27% to 5457.39. Singapore's Straits Times index grew 0.14% at 3349.66. Malaysia's KLCI grew 0.2% to 1842.17. Indonesia's Jakarta Composite index sank 0.28% to 5133.04.
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