Asia Pacific share market advanced on Thursday, 21 April 2016, as the recovery in oil prices and higher US equities overnight provided fresh risk impetus. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8%, brushing its highest since early November.
Wall Street shares ended higher on Wednesday as a rebound in oil prices added to optimism sparked by a raft of earnings reports. On Wednesday, the Dow Jones industrial average added 0.24%, the S&P 500 was higher by 0.08% and Nasdaq composite closed up 0.16%.
Oil prices advanced in Asian hours, with global benchmark Brent higher by 0.37% at $45.97, after settling up 4% overnight, thanks to a smaller than expected increase in U.S. crude inventories and the production freeze bandwagon. Iraq's deputy oil minister has reportedly said major OPEC and other crude producers will meet in Russia, possibly in May, in another attempt to decide a cap on oil production.
Among Asian bourses
Australia Market extends gain on the miners
Australian share market advanced for third straight session, as risk appetite buying buoyed by rising commodity prices and strong lead from Wall Street overnight. Most industry sectors were higher, with energy and materials stocks being major gainers. At close of trade, the benchmark S&P/ASX 200 advanced 56.70 points, or 1.08%, to 5272.70. The broader All Ordinaries added 55.20 points, or 1.05%, to 5336.40.
Shares of materials and resources led the local rally on the back of soaring commodity prices. Oil and gas explorer Woodside Petroleum grew 5.9% to A$27.95, Santos rose 10% to A$4.63, and Origin Energy surged 8.8% to A$5.55. Rio Tinto grew 2.4% to A$52.55 and Fortescue Metals Group added 4.6% to A$3.62.
BHP Billiton extended rally, up 3.5% to A$21.05, on the top of yesterday's 3.4% gain, despite lowering its iron ore production guidance for the second time this financial year, after revealing that its Pilbara iron ore division suffered weather impacts during the March quarter.
Shares in Australia's third biggest miner South32 bumped up 8% to $1.75 after the company eliminated its debt and announced a cash positive position of $23.1 million.
Nikkei surges to 2-months high
The Japan share market surged, buoyed by positive lead from Wall Street overnight, yen weakening against greenback, and speculation of additional Bank of Japan asset purchases next week. Meanwhile, gains in crude oil prices and easing of fears about ripples from the Kumamoto earthquakes also helped the market. Most industry sectors were higher, All industry categories on the main section advanced, with mining, real estate and insurance sectors being major gainers. The 225-issue Nikkei average gained 457.08 points, or 2.7%, to close at 17363.62. The Topix index of all first-section issues ended up 27.90 points, or 2.04%, at 1393.68.
Market pundit expects that the Bank of Japan likely to increase asset purchases at next week's meeting on monetary policy, due to worsening business confidence and the impact from last week's earthquake. It expects the central bank will more than double its purchases of exchange-traded funds to 7 trillion yen.
Shares of mining, real estate and insurance sectors ended stronger. Oil explorer Inpex Corp rose 5.7% to 918.2 yen. Sumitomo Realty & Development Co gained 5.6% to 3,423 yen, while Dai-ichi Life Insurance Co advanced 3.9% to 1,427.5 yen.
Mitsubishi Motors shares locked 20% lower circuit at 583 yen after the company said its employees improperly manipulated fuel-economy data. Mid-sized auto maker said that the incorrect data involved 157,000 cars sold under its own brand and 468,000 cars sold under the Nissan Motor Co brand. Mitsubishi's suppliers dropped, including motor parts-manufacturer Meidensha Corp., which sank 9.4%. Car-battery maker GS Yuasa Corp. fell 1.5%, adding to Wednesday's 5.7% tumble.
China Market extends loss on profit booking
Mainland China stock market finished down for second straight session, due to continued profit taking in overvalued stocks. Most industry sectors were lower, with tech, industrial, and consumer goods stocks being major losers. The benchmark Shanghai Composite Index declined 19.69 points, or 0.66%, to 2952.89. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, fell 20.43 points, or 0.64%, to 3160.60.
The latest report by PwC showed that the profitability of major banks appears to have peaked while asset quality risk is increasing despite backdrop of a slowing economy and the liberalization of interest rates. Net profit growth at China's five largest commercial banks slowed to 0.69% last year from 6.52% a year ago. Growth at the six major joint-stock commercial banks also slowed significantly, to 4.21% last year from 9.74% in 2014. The net profit of 18 listed banks, which had reported their annual results by Monday, grew by an average of 1.91% last year from 7.39% a year ago.
The Chinese mainland has decided to continue imposing anti-dumping duties on imports of polyamide-6, a chemical used to produce synthetic fibre and plastic, from the United States, the European Union, Russia and Taiwan for another five years. The Ministry of Commerce (MOC) made the decision after a review of previous anti-dumping measures, the MOC said in an online statement on Thursday.
Hang Seng bounces 1.82%
The Hong Kong stock market ended higher, buoyed by a rise in U.S. stocks following an uptick in oil prices and expectations of progress towards the launch of the Shenzhen Hong Kong Stock Connect. The benchmark Hang Seng Index escalated 385.94 points, or 1.82%, to 21622.25 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 113.98 points, or 1.25%, to 9248.40 points. Turnover was little changed at HK$73 billion compared to HK$73.2 billion on Wednesday.
Hong Kong stocks were boosted by expectations of closers ties between the Shenzhen and Hong Kong stock markets. Chinese officials may announce the approval of the highly-anticipated Connect scheme linking the Shenzhen and Hong Kong exchanges in the next two months, according to media reports.
Shares of energy companies advanced inline with rally in crude oil prices. Crude oil prices jumped 4% as lower-than-expected US crude inventory rise offset the strike of Kuwait oil workers. CNOOC (00883) surged 5.5% to HK$10.18, making it the best performing blue chip today. PetroChina (00857) also climbed 3.7% to HK$5.55. Sinopec (00386) jumped 4% to HK$5.49.
International banking groups also fared better. HSBC (00005) soared 4.4% to HK$52.9, ranking it the second blue-chip winner. StanChart (02888) added 4% to HK$62.1.
Sands China (01928) plunged 4.9% to HK$29.05. It was the worst blue-chip loser today after it reported 1Q EBITDA of US$518 million. Galaxy Ent (00027) also slipped 2.6% to HK$28.3.
China Mobile (00941) bounced 3.6% to HK$91.9 after it reported ARPU growth of 20% in 1Q. But China Unicom (00762) and China Telecom (00728) just gained 1% and 0.6% to HK$9.55 and HK$4.07 as China Broadcasting Network (CBN) was reportedly to become the fourth basic telecom services operator.
Sensex gains for sixth day in a row
A divergent trend was witnessed as the barometer index, the S&P BSE Sensex, registered small gains and the Nifty 50 index settled with marginal losses. The Sensex rose 36.20 points or 0.14% to settle at 25,880.38. The Nifty 50 index fell 2.70 points or 0.03% to settle at 7,912.05.
Stocks of public sector banks edged higher on reports that provisioning for non-performing asset will be lower than anticipated in Q4 March 2016, which in turn could restrict the negative impact on bottom line. IndusInd Bank dropped as sticky loans rose in Q4 March 2016. Chennai-based micro finance lender Equitas Holdings made a strong debut on the bourses.
Wipro tumbled after the company reported weak Q4 results and issued muted revenue growth guidance for Q1 June 2016. Maruti Suzuki India eked out small gains as the Japanese yen eased against the dollar. Bharti Infratel edged lower, with the stock extending losses registered during the previous trading session triggered by media reports that Bharti Airtel will sell more than 5% stake in the telecom tower company through an open market block deal. Stocks of oil exploration and production (E&P) firms edged higher after overnight gains in crude oil prices.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 was up 0.1% to 6906.10. South Korea's KOSPI index added 0.8% to 2022.10. Taiwan's Taiex index rose 0.6% to 8568.65. Malaysia's KLCI climbed 0.7% to 1721.47. Indonesia's Jakarta Composite index rose 0.5% to 4903.09. Singapore's Straits Times index climbed 0.4% to 2960.78.
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