Asia Pacific share market closed mixed on Thursday, 02 June 2016, on caution before a meeting of OPEC and a monthly U.S. jobs report. Investors were also keeping an eye on the European Central Bank for hints on the economic outlook.
Investors are closely watching for the outcome of a top-level meeting of the Organization of the Petroleum Exporting Countries on Thursday in Vienna.
Investors are looking to Friday's American payrolls report as the Fed's next policy review looms. Traders are putting the odds of an interest-rate hike by July at more than 50 percent.
The European Central Bank, meanwhile, is expected to stress its commitment to raise inflation and help the economy at a meeting Thursday, but not to decide on any new stimulus measures. All eyes will be on its new forecasts for growth and inflation, as well as President Mario Draghi's news conference. His tone and outlook could affect market's expectations for more stimulus in coming months.
Among Asian bourses
Australia Market drops 0.8%
Australian share market declined for third straight session, weighed by selloff in property trusts, bank & financial, metal & mining, consumer goods, and IT stocks. At close of trade, the benchmark S&P/ASX 200 index declined 44.30 points, or 0.83%, to 5278.90, its lowest close since 4 May 2016. The broader All Ordinaries sank 41 points, or 0.76%, to 5354.20. Falling stocks outnumbered advancing ones on the Australia Stock Exchange by 542 to 454 and 296 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was up 4.85% to 18.209.
Shares of materials and resources players extended losses on tracking drop in commodity prices and fear recent stocks gains were overcooked given weak global macro factors. Among the big miners, BHP Billiton slipped 1.3% to A$18.24 and Rio Tinto shed 2% to A$42.90, after commodity prices fell overnight.
Energy shares lost ground after oil prices failed to hold levels above $50 a barrel. WTI futures were down 1.0% at $48.61, after settling down 0.47% Tuesday. Brent was off 1.10% at $49.34. Oil explorer Woodside Petroleum dropped 1.8% to A$26.91, Santos slumped 4% to A$4.35, Origin sank 1.9% to A$5.60.
ALS shares closed 27.16% higher at A$5.15 after the testing, inspection and certification group knocked back A$2.7 billion private equity takeover bid, setting the scene for a possible bidding war. ALS rejected an indicative A$5.30 a share offer from private equity firms Advent International and Bain Capital, labelling the proposal as opportunistic and low.
Japan Stocks weigh by surging yen
The Japan share market tumbled, weighed by the yen appreciation against greenback after Prime Minister Shinzo Abe said he would postpone an increase in the nation's sales tax and held back a widely expected fiscal stimulus package. Easing policies aim in part to weaken the yen to help boost the economy, so the smaller chance of easing triggered an unwinding of bearish yen bets, which pushed the yen stronger. The benchmark Nikkei225 index had tumbled 2.32%, or 393.18 points, to 16,562.55. The broader Topix index of all first-section shares fell 2.22%, or 30.26 points, to 1,31.81.
Shares of exporters retreated further, weighed by yen appreciation against greenback. A stronger yen is generally a negative for exporter as it reduces overseas profits when converted into local currency. Shares in tech firms Sony and Panasonic were on the losers list, along with carmakers Toyota, Nissan and Isuzu.
Carmakers slumped after U.S. auto sales fell in May for the first time since January. Honda Motor Co. sank 4.2% after its American sales dropped 4.8% last month, while Mazda Motor Corp. slid 3.2% after revenue from north America declined 4.3% in the same period.
Daikin Industries dropped 3.4% after SMBC Nikko Securities Inc. cut its rating on the maker of air conditioners, citing the potential negative impact from a stronger yen.
Yahoo Japan Corp. climbed 3% after the Nikkei newspaper reported SoftBank Group Corp. may boost its ownership of the search engine operator. SoftBank, which already owns about 43% of Yahoo Japan, slumped 3.4%.
China Stocks closed up
Mainland China stock market finished higher after wavering between positive and negative territory, helped by gains in IT, material, consumer staples, telecom, and energy stocks. The gain was propelled by speculation that yuan-denominated shares have a higher chance of joining MSCI indexes. The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.21%, to 3,167.10, while the Shanghai Composite Index grew 0.4%, to 2,925.23 points.
Kweichow Moutai gained 1.5% and Wuliangye Yibin Co. added 1.2% to pace gains for consumer shares. Dongxu Optoelectronic Technology Co. rose 3.2% to its highest level this year.
Midea lost 1.3% after a 7.1% jump on Wednesday as the German government sought other potential buyers for Kuka and looked at ways to attach conditions to the purchase by China's biggest home-appliance maker. Midea already owns 13.5% of the German supplier of automation equipment indirectly and said it's targeting a stake of at least 30%.
Hong Kong Market ends higher
The Hong Kong stock market finished the session higher on talks that Shenzhen-HK Connect program may begin in June or July and on continuing hopes that global index provider MSCI will soon add Mainland China listed stocks to an influential index. The benchmark Hang Seng Index advanced 98.24 points, or 0.47%, to 20859.22 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, rose 48.09 points, or 0.55%, to 8756.38. Turnover reduced to HK$57.9 billion from HK$65 billion on Wednesday.
Newswire reported that Google was selling 371 million shares of Lenovo (00992) for US$221 million. Lenovo plunged 4% to HK$4.56, becoming the worst blue-chip performer today. Citi Research believes Lenovo's downside is limited with support of earnings growthand a 5.6% yield.
China Mengniu Dairy (02319) was the top blue-chip winner today. It ended up 6% to HK$13.56. Deutsche Bank maintained its "buy" rating on Mengniu, noting its gross margin is expanding, and its sales should be tracking in line with its guidance at mid-single digit growth.
BEA (000023) added 1% to HK$28.9 after it announced 180 jobs cut and 22 retail outlets closure for its securities operations. Standard Chartered (02888) also added 1% to HK$59.85 after Goldman Sachs rated it "buy".
HKEx (00388) put on 1% to HK$188.2 on talks that Shenzhen-HK Connect program may begin in June or July. Other local securities firms were also higher. Quam (00952) soared 16% to HK$0.71. Kingston Fin (01031) surged 10% to HK$3.23.
Indian Market extends gains in late trade
Recovery during the latter part of the trading session helped the two key benchmark indices clock modest gains. The barometer index, the S&P BSE Sensex, rose 129.79 points or 0.49% at 26,843.72, as per the provisional closing data. The Nifty 50 index rose 39 points or 0.48% at 8,218.95, as per the provisional closing data. A strong rebound for key benchmark indices during the latter part of the trading session materialized after media reports said India Meteorological Department (IMD) expects the onset of the monsoon at the Kerala coast in the next 4-5 days.
The arrival of the rains at the Kerala coast marks the onset of the June-September southwest monsoon season in India. The IMD reportedly expects favourable conditions for monsoon advance in the Bay of Bengal in the next 48 hours. The IMD on 15 May 2016 predicted a delay of 6 days for the onset of the monsoon rains in Kerala this year from the normal onset date which is 1 June. The IMD will issue the 2nd stage long range forecast for the 2016 southwest monsoon season at 16:00 IST today, 2 June 2016. The IMD forecast good rains this year in its first stage forecast issued on 12 April 2016. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture.
Tata Motors rose 1.07% at Rs 454 after the company announced monthly sales volume data for commercial and passenger vehicles. Tata Motors' total commercial and passenger vehicles sales rose 1% to 40,071 units in May 2016 over May 2015. Domestic sales of Tata commercial and passenger vehicles rose 2% to 35,643 units in May 2016 over May 2015. Exports declined 5% to 4,428 units in May 2016 over May 2015. The company announced the monthly sales volume data after market hours yesterday, 1 June 2016.
Meanwhile, the central government yesterday, 1 June 2016, announced increase ranging from 1.5% to 9.2% in the minimum support prices (MSPs) of Kharif crops for the 2016-17 season. The MSPs include a bonus of Rs 425 per quintal for pulses, namely Arhar (Tur), Urad and Moong, a bonus of Rs 200 per quintal for Sesamum and a bonus of Rs 100 per quintal for other kharif oilseeds namely, Groundnut-in-shell, Sunflowerseed, Soyabean, and Nigerseed. The government said in a statement that the decision to offer bonus over MSP on pulses and oilseeds is aimed at giving a strong price signal to farmers to increase acreage and invest for increase in productivity of these crops. There is an increasing gap between the demand and domestic supply of pulses and oilseeds and the reliance on import is increasing. The increase in cultivation of leguminous pulses and oilseeds will also have additional environmental benefits as these crops are less water consuming and help in nitrogen fixation in the soil.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 declined 0.27% to 7003.12. South Korea's KOSPI index added 0.12% to 1985.11. Taiwan's Taiex index fell 0.48% to 8556.02. Malaysia's KLCI rose 0.25% to 1630.53. Indonesia's Jakarta Composite index fell 0.13% to 4833.23. Singapore's Straits Times index rose 0.16% to 2795.09.
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