Asia Pacific share market advanced on Friday, 29 January 2016, as investor sentiment was bolstered by the US shares closing higher overnight and the Bank of Japan's latest economic stimulus measure. Japan's central bank introduced negative interest rates to spark inflation.
Wall Street closed higher overnight, buoyed by the rise in crude oil on speculation that Saudi Arabia and other OPEC countries would cut output to boost prices. The Dow Jones industrial average was up 107.14 points, or 0.67%, at 16,051.60, the S&P 500 was up 14.73 points, or 0.78%, at 1,897.68 and the Nasdaq Composite index was up 35.56 points, or 0.80%, at 4,503.73.
The Japan's central bank introduced a negative rate interest policy to boost the economy after previous stimulus efforts produced indifferent results. The Bank of Japan will cut interest rates further to -0.1% to decrease commercial banks borrowing costs in an attempt to boost Japan's flagging economy. The Bank of Japan's rate move comes after the European Central Bank indicated it could boost stimulus as soon as March
The BOJ also pledged to keep increasing the monetary base at an annual pace of 80 trillion yen ($663 billion), primarily by continuing to purchase Japanese government bonds, exchange-traded funds and real-estate investment trusts.
Among Asian bourses
Australia Stocks gain
Australian share market ended higher in volatile trading. Six out of ten sectors closed the day higher, led by energy stocks after jump in Brent crude oil prices on the talks about potential production cuts from Russia and Saudi Arabia. At the close, the benchmark S&P/ASX 200 index rose 29.30 points, or 0.59%, to 5055.50 points, while the broader All Ordinaries index added 28.50 points, or 0.57%, to 5056.60 points. The benchmark slipped 5.5% in January, posting its biggest monthly drop since August 2015.
Shares of energy players gained on tracking strength in oil prices. Crude oil prices gained on hopes for a pact among oil producers to cut output. Russian energy minister Alexander Novak and a senior Gulf OPEC delegate suggested that major oil producers may pare production - by as much as 5% each - in an effort to ease a global supply glut that has hammered oil prices over the past 18 months. March West Texas Intermediate crude rose 2.9% to settle at $33.22 a barrel on the New York Mercantile Exchange, while March Brent crude on London's ICE Futures exchange rose 2.4% to $33.89 a barrel. Among energy stocks, Woodside Petroleum advanced 6% to A$27.95, Santos added 7.5% to A$3.16, and Oil Search jumped 6.6% to A$6.50.
Shares of materials and resources were up, with BHP Billiton adding 1.7% to A$15.35 and Rio Tinto rising 0.5% to A$39.13. Fortescue Metals surged 13.8% to A$1.73, with investors rewarding the pure-play iron ore miner after it announced yesterday that it had paid down debt quicker than expected.. Newcrest Mining fell 7.2% to A$12.88, after the gold prices softened in overnight trade.
New Zealand shares rise
Equities on the New Zealand share market rose on higher volumes, with New Zealand Refining Co and Sky Network Television rising, while Intueri Education Group, Trade Me Group and Air New Zealand fell. By the provisional closing, the S&P/NZX 50 Index rose 20.52 points, or 0.3%, to 6170.22. Within the index, 31 stocks rose, 13 fell and six were unchanged.
Xero fell 1.8% to NZ$16.79. The cloud-based accounting software developer slowed its quarterly cash burn in the final three months of 2015 as it knuckles down on keeping a lid on spending.
Rakon shares shed 20% to 24 NZ cents after the high-tech components maker warned annual earnings will miss forecast because major network operators have delayed their spending on new equipment.
Nikkei surges after BOJ move
Japan share market closed sharply higher, as investor sentiment was bolstered by the US shares closing higher overnight and yen depreciation to mid-120 level against greenback after the Bank of Japan's latest economic stimulus measure. Japan's central bank introduced negative interest rates to spark inflation. Barring banks, all TSE sectors advanced, with realty & construction, brokerage houses, miners, and foods-linked issues being major gainers. The benchmark Nikkei 225 index surged 2.8%, or 476.85 points, to 17518.30. The Topix index of all Tokyo Stock Exchange First Section issues spurted 39.97 points, or 2.87%, to 1432.07.
Real estate shares posted the biggest gain among the 33 Topix 33 industry groups as the country's central bank introduced a negative rate interest policy to boost the economy after previous stimulus efforts produced indifferent results. Ad Works jumped 17%.
Energy shares also rose on crude's recovery for a fourth day. Oil explorer Inpex Corp. and Japan Petroleum Exploration Co. both added more than 6%.
Robot-maker Fanuc Corp. plunged 13% after cutting its operating profit forecasts. Nomura Holdings Inc. reduced its rating on the company after the results, saying sales will likely fall next year as smartphone makers reduce demand for the company's robotic products.
China Market rebounds 3.09%
Mainland China stock market rebounded sharply from one year low, as investors chased for bottom fishing among severely beaten down shares after China's top economy official said there is no basis for the yuan to continuously weaken. Risk sentiments received further boost from the People's Bank of China injection of a huge 690 billion yuan this week and assurance to conduct more liquidity operations than usual to avoid liquidity crunch ahead of the Lunar New Year celebrations. The Shanghai Composite Index ended up 3.09%, or 81.94 points, at 2737.60. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, grew 92.33 points, or 3.24%, to 2946.09. For January, both indexes are poised to lose over 20%, their biggest monthly decline since the 2008-09 global financial crises.
Chinese Premier Li Keqiang said on Thursday that there is no basis for continuous depreciation of the yuan, China's official Xinhua news agency reported. In his phone conversation with International Monetary Fund Managing Director Christine Lagarde, Li said Beijing has no intention of boosting exports by devaluing the renminbi.
The People's Bank of China has injected CNY590 billion this week - the most since the addition of CNY662 billion for the week of 5 February 2013. The PBOC injected a net of CNY315 billion last week. The central bank injected money to maintain liquidity as demand for cash is strong ahead of the Chinese New Year holiday officially starting 7 February 2016.
Shares of brokerages companies jumped, led by Citic Securities after it reported 2015 net income jumped 75% from the previous year. Citic and Haitong Securities Co surged more than 5%.
Shares of industrial companies raised the most among 10 SSE sectors, with shipping stocks being major gainers on bargain hunting. Shipping companies have slumped recently as the Baltic Dry Index, a measure of commodity shipping costs, slid to a 30-year low. China Railway Group jumped 9.9%, while China Shipping Container Lines Co. rose 10%.
Hong Kong Market extends gain
The Hong Kong market advanced as investors continued hunting among severely beaten down shares on positive lead from offshore markets and gains in Mainland A-Shares. The Hang Seng Index (HSI) opened down 57 points at 19,138. But it then reversed its trend in tandem with the strong Shanghai market. The Bank of Japan introduced a negative interest rate policy also boosted the local sentiment. The benchmark Hang Seng Index has gained 487.28 points, or 2.54%, to 19683.11 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, added 212.78 points, or 2.65%, to 8241.36 points. Turnover increased sharply to HK$90.6 billion from HK$75.5 billion on Thursday.
Brokerages jumped across the board on positive profit alerts from CITIC Sec (06030) and Haitong Sec (06837). CITIC Securities (06030) gained 5.5% to HK$14.925 after reported jump in its preliminary net profits by 75% to Rmb19,825 million on the back of 92% growth in operating revenue at Rmb56,022 million for the year 2015. Haitong Securities (06837) rose 5.6% to HK$11.66 after the brokerage house expects 102-108% jump in profit for the year of 2015 from the profit of about Rmb7,711 million for the corresponding period of last year.
Energy stocks were up, buoyed by the rise in crude oil on speculation that Saudi Arabia and other OPEC countries would cut output to boost prices. CNOOC (00883) leaped 9.6% to HK$7.88. Kunlun Energy (00135) jumped 8.2% to HK$5.79. Both stocks were the best blue-chip gainers. Sinopec (00386) shot up 3.6% to HK$4.33. PetroChina (00857) put on 4.2% to HK$4.75.
Sensex attains 3-week closing high
Indian stocks were also joining in a global rally after the Bank of Japan said it would adopt a negative interest rate policy for the first time. The barometer index, the S&P BSE Sensex, jumped 401.12 points or 1.64% to 24,870.69. The Nifty gained 138.90 points or 1.87% to settle at 7,563.55.
Shares of Vedanta jumped and Cairn India fell on media reports that Vedanta's board of directors is likely to meet today, 29 January 2016, to discuss merger of Cairn India with the company with modified terms. Shares of oil exploration and production firms rose on a recovery in global crude oil prices. Yes Bank jumped after the bank said it continues to show resilience on all asset quality parameters with an improving outlook going forward. ICICI Bank dropped after the bank reported a rise in bad loans in Q3 December 2015.
Dr Reddy's Laboratories rose after the company received approval from United States Food & Drug Administration (USFDA) for ZEMBRACESymTouch (sumatriptan succinate) injection for the treatment of acute migraines in adults. NTPC edged lower after reporting weak third quarter results. Bharti Airtel edged lower in volatile trade after reporting weak third quarter results. Titan Company jumped after reporting decent growth in bottom line in Q3 December 2015.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index added 2.2% to 8080.60. South Korea's KOPSI rose 0.3% to 1912.06. Malaysia's KLCI rose 2% to 1667.80. Singapore's Straits Times index added 3.1% at 2737.60. Indonesia's Jakarta Composite index climbed up 0.3% to 4615.16.
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