Asia Pacific Market: Stocks closed mixed

Headline equities of the Asia Pacific market closed mostly down on Thursday, 11 August 2016, following U.S. losses overnight, drop in oil price and anticipation of another data deluge from China on Friday. The MSCI Asia Pacific Excluding Japan Index fell 0.3% to 446.99

Central banks also were in focus as both the Philippine central bank and South Korea's central bank held benchmark interest rates steady, as expected, however the Reserve Bank of New Zealand cut rates by a quarter point to 2%.

New Zealand's central bank cut its official cash rate (OCR) by 25 basis points to 2% on Thursday and flagged more easing to combat low inflation, disappointing some investors who were looking for a more aggressive signal.

 

South Korea's central bank kept the base rate unchanged at 1.25%. In its monetary policy statement, the Bank of Korea said the trend of economic recovery in the U.S. "has been sustained" and that China has maintained its "moderate pace of growth." The central bank said it expects the South Korean economy to sustain its trend of modest growth in the future, due to "expansionary macroeconomic policies."

Crude oil decreased for a third day as weekly government data showed U.S. crude stockpiles unexpectedly expanded. Data from the U.S. Energy Information Administration (EIA) showed U.S. crude inventories rose by 1.1 million barrels in the week ended August 5, in a third consecutive weekly build. Adding to the supply glut concerns, OPEC's largest producer, Saudi Arabia, is pumping record amounts of oil, while Iran is resuming production faster than expected, suggesting neither country is likely to entertain the idea of an OPEC deal to control production.

Oil prices fell more than 2% on Wednesday in the U.S. session. During Asian hours on Thursday, U.S. crude futures slipped further by 0.43% to $41.54, while global benchmark Brent fell 0.32% to $43.91 a barrel.

Among Asian bourses

ASX200 falls 0.64%

Australian share market finished lower for second straight session, with banks and financial heavyweight stocks leading losses following a trading update from one of the country's biggest lenders while energy stocks were knocked by a slump in crude-oil prices. At close of trade, the benchmark S&P/ASX 200 index declined 35.70 points, or 0.64%, to 5508. The broader All Ordinaries declined 28.80 points, or 0.51%, to 5599.40. Falling stocks outnumbered advancing ones on the Australia Stock Exchange by 526 to 509 and 350 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was up 2.74% to 13.053.

The banks and financial stocks declined, with top four lenders leading downtrend. ANZ Banking Group declined 1% to A$26.48, Commonwealth Bank of Australia 1.9% to A$75.95, Westpac Banking Corp 2.6% to A$30.02, and National Australia Bank 1% to A$26.55.

Energy stocks were down, weighed by drop in crude oil prices. Woodside Petroleum dropped 1.1% to A$27.75, Oil Search 0.7% to A$7.34, and Santos 2.8% to A$4.55.

Telstra posted a 36.6% jump in net profit to A$5.78 billion the result boosted by asset sales but was taking a hit over its announced A$3 billion repair job to its network and perceived failure to outline a growth plan. The telco giant was down 1% to A$5.55.

Nick Scali surged 15% to close at A$5.50 after the furniture retailer posted a 53% jump in full year profit to $26.2 million.

Fund manager Magellan Financial closed 7% higher at A$25.96 after posting a 14% rise in profit to A$198.4 million.

China Market falls on corrections in resources and small-caps

Mainland China stock market closed down after wiping out initial gain, as sharp corrections in resources shares and small-caps dragged main indexes lower, despite gains in financial plays. Market sentiments were troubled with news that China devalued its renminbi currency by 2% against the dollar, sparking its largest one-day drop in 11 years, and anticipation of another economic data deluge on Friday. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.31%, to 3233.36, while the Shanghai Composite Index declined 0.53%, to 3002.64 points and the Shenzhen Composite index closed 1.28% down at 1950.92 points.

Investors are awaiting the release of Chinese data for July on industrial output, retail sales and fixed-asset investment due on Friday. Figures released Tuesday showed China's producer prices fell in July at their slowest rate in nearly two years, fuelling hopes the end of a painful slowdown could be in sight for the Asian powerhouse.

The People's Bank of China decided to implement a one-off devaluation of the renminbi in order to regain some of its control of monetary policy in an environment where the Federal Reserve was getting ready to hike rates. The Fed ended up making its first rate hike since 2006 in December 2015, as volatile stock markets kept the Fed on the sidelines in September 2015.

Hong Kong Stocks shine on Shenzhen link talks

The Hong Kong stock market climbed to an eight-month high in volatile trade, as investors sentiments encouraged by rumors that authorities would announce the launch of Shenzhen-HK Connect program after mainland markets close. The benchmark Hang Seng Index advanced 88.12 points, or 0.39%, to 22580.55 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, rose 107.84 points, or 1.16%, to 9423.34. Turnover increased significantly to HK$75.8 billion from HK$61.2

China's media reported that the CSRC has set up a working team to prepare for the Shenzhen-HK Connect launch. HKEx (00388) gained 3% to HK$197.7. Other brokerages were also chased by investors. First Shanghai Investments (00227) soared 11% to HK$1.4. Emperor Capital (00717) surged 13% to HK$0.79. Bright Smart Securities (01428) shot up 6.6% to HK$2.38.

CKH Holdings (00001) edged down 0.7% to HK$93.25. CK Property (01113) slipped 1.3% to HK$57.05. Both companies are scheduled to report their earnings today. CKI Holdings (01038) edged down 0.2% to HK$69.45 on talks that the Australian government has initially rejected its bid for the Ausgrid.

China Mobile (00941) inched up 0.7% to HK$96.7 after it reported interim earnings growth of 6%, overshooting market consensus of 4% growth. HSBC (00005) went ex-dividend today, rising 0.6% to HK$54.3.

Talks of Shenzhen-HK Connect launch also boosted Chinese insurers. Ping An (02318) added 2% to HK$38.05. China Life (02628) gained 0.7% to HK$18.2.

Indian Market snaps two-day losing streak

Key benchmark indices registered small to modest gains after seeing intraday volatility. The barometer index, the S&P BSE Sensex, rose 84.72 points or 0.31% to settle at 27,859.60. Nifty rose 16.85 points or 0.2% to settle at 8,592.15.

Lupin rose 2% after the company announced that its US subsidiary Gavis Pharmaceuticals LLC, USA has received final approval for its Potassium Chloride Extended-Release Tablets USP, 8 mEq (600 mg) and 10 mEq (750 mg) from the United States Food and Drug Administration (USFDA).

Bank of Baroda (BoB) slumped on heavy volumes after the state-run bank reported weak Q1 June 2016 numbers. The stock lost 9.05%. Yes Bank lost 0.96% to Rs 1,252.65 on reports the bank is contemplating to raise about $1 billion through issue of shares to qualified institutional buyers.

Shares of Dilip Buildcon settled at Rs 251.95 on BSE, a premium of 15.04% over the initial public offer price of Rs 219 on its debut on the stock exchanges today, 11 August 2016. The stock debuted at Rs 240, a premium of 9.58% over the initial public offer (IPO) price.

Elsewhere in the Asia Pacific region: New Zealand's NZX50 added 0.06% to 7353.83. South Korea's KOSPI index climbed 0.2% to 2048.80. Taiwan's Taiex index fell 0.75% to 9131.83. Malaysia's KLCI was up 0.34% to 1678.80. Indonesia's Jakarta Composite index fell 0.1% to 5419.09. Singapore's Straits Times index fell 0.2% to 2869.82. Japan Stock market closed for the Mountain Day public holiday

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