Most of the heavyweight equities of the regional market recouped lost ground late afternoon. The rebound in the regional shares was largely backed by better than expected China economic data which spurred optimism over world second largest economy.
China's Bureau of Statistics said on Friday that Chinese Industrial Production rose 8.8% from a year earlier in May, accelerating slightly from an 8.7% year-over-year increase in April. Retail sales, a key gauge of consumer spending, increased 12.5% last month from a year ago in China, up from a gain of 11.9% in April. Fixed-asset investment, a main measure of government spending on infrastructure projects, rose by 17.2% year-on-year in the January-May period, slowing from a 17.3% rise in the first four months of the year.
The Bank of Japan on Friday retained its monetary policy unchanged while raising its view on overseas growth. The policy board of the BoJ unanimously decided to increase the monetary base at an annual pace of about JPY 60-JPY 70 trillion as widely expected. The central bank's statement was almost identical to its previous one issued on May 21, with the only major change altering language about overseas economies to "are recovering" from last month's "are starting to recover." With regard to the Japan outlook, the bank said the economy is expected to continue a moderate recovery as a trend, while it will be affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike.
However, the rise on the upside capped as geopolitical tensions in Iraq have hit risk appetites as that could have a big impact on oil prices. Weaker-than-expected U.S. retail sales and jobless claims data released on Thursday further tempered investors sentiments.
Sunni Islamist militants, who took over Iraq's second-biggest city Mosul earlier this week, extended their advance south toward Baghdad and surrounded the country's largest refinery in the northern town of Baiji on Thursday.
Market strategists are alert to risks to global oil supply and macro-economic stability following US President Barack Obama's warning that he was not ruling out any possible actions to halt the march of Islamist insurgents as Iraq slides towards a full scale civil war.
Crude oil prices jumped to eight-month highs during northern hemisphere trading on Thursday night. The West Texas Intermediate (WTI) crude oil benchmark is up 0.8% at $US107.34 per barrel, while the Brent crude oil benchmark is up 0.4% at $US113.49.
Among Asian bourses
Australia market drops to two-month low
Australian share market extended falling streak for third day in row, dragged down on tracking weak finish of Wall Street overnight and fall in the iron ore price, and growing fears that violent political unrest in Iraq will draw the United States and its allies including Australia into another Gulf war. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 0.45% to 5405.10 and 5483.70, respectively.
Shares of material and resources companies declined, dragged down by weakness in commodity price and a firm Australian dollar. Resources giant BHP Billiton declined 1.2% to A$35.29. Main rival Rio Tinto dropped 2% to A$57.54. Fortescue Metals Group lost 6.1% to A$4.065.
Shares of precious metal miners climbed the most in Sydney, power by rebound in bullion prices. The Comex gold futures quote rose by US$12.80 an ounce or 1.0% to US$1,274.00 per ounce. Newcrest Mining rose 2.2% to A$9.92 yuan.
Shares of energy producers went up, on tracking jump in crude oil prices in the international market. Australia's biggest oil producer Woodside Petroleum climbed 2% to A$42.83. Among the other big drillers Oil Search rose 0.6% to A$9.805, and Santos added 1.1% to A$14.67. Origin Energy rose 0.7% to A$14.32.
Japan market gains 0.83%
Japan share market finished higher after recouping losses in late-afternoon trade. Japan's Nikkei share average fell as low as 14,830.90, the lowest since June 2, in midmorning trade after a weak opening as escalating civil war in Iraq hit risk appetite. The benchmark index was, however, recouped lost ground late afternoon as investors chased for bargain hunting after the Bank of Japan announcement today it is maintaining record stimulus. The benchmark Nikkei 225 index advanced 0.83% to finish at 15097.84, while the Topix index of all first-section shares grew 0.5% to 1243.97.
The Bank of Japan on Friday held off expanding its stimulus program and said the world's number three economy was recovering, despite fears a sales tax rise will dent growth. Policymakers unanimously agreed to hold off any further measures after a two-day meeting. The Bank of Japan today maintained its policy of expanding the monetary base at a pace of 60 trillion yen ($588 billion) to 70 trillion yen per year, in line with expectations.
Japan's economy is expected to continue a moderate recovery as a trend, while it will be affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike, the bank said in a statement. Policymakers noted that overseas economies, particularly among major industrialised nations, were also recovering albeit with a lacklustre performance still seen in part. The BOJ's target of achieving 2% inflation by next year was also on course, it added.
Japanese exporters declined, hurt by yen appreciation against major currencies. The stronger yen trimmed the profitability of Japanese exporters. Nintendo, the maker of Wii game consoles, dropped 1.5% to 11,515 yen. Ebara Corp dropped 1.4% to 635 yen, IHI Corp 1.6% to 443 yen, Komatsu 1.1% to 2291 yen and Honda Motor Co 0.5% to 3556 yen.
Shares of energy producers went up, on tracking jump in crude oil prices on Thursday on fears that escalating conflict in Iraq could disrupt supply from OPEC's second-largest producer. Inpex Corp jumped 4.5% to 1635 yen and Japan Petroleum Exploration rose 2.1% to 4390 yen.
Advantest Corp. climbed 3.6% to 1253 yen on media reports that the maker of chip-testing equipment raised its target for operating margins on rising orders. Advantest president Haruo Matsuno stated that chip-testing equipment orders in the three months to June may reach 50 billion yen, higher from earlier projected orders for the quarter at between 40 billion year and 45 billion yen.
Dowa Holdings Co. advanced 1.9% to 959 yen after Credit Suisse Group AG raised its rating on the metal refiner to neutral from underperform.
China stocks jumps as factory output data spur optimism
Mainland China share market surged, as investors chased for value buying on optimism over the economy after the release of better than expected economic data including factory output data. The nine out of ten SSE sectors closed higher, with shares of financials, technology, consumer discretionary, industrials, energy and material sectors leading gains. The benchmark Shanghai Composite closed 0.93% higher from prior day to 2070.71. Market turnover increased to 82.54 billion yuan from yesterday's 69.30 billion yuan.
Shares of energy producers climbed on higher oil prices. World oil prices rose sharply on Thursday on fears that escalating conflict in Iraq could disrupt supply from OPEC's second-largest producer. Brent crude rose by US$2.45 or 2.2% to a 6-month high of US$112.40 a barrel with US Nymex up by US$2.13 or 2.0% to a 9-month high of US$106.53 a barrel. PetroChina Co added 0.7% to 7.55 yuan and China Petroleum & Chemical Corp jumped 1% to 5.13 yuan. Pingdingshan Tianan Coal Mining Co gained 4.3% to 4.15 yuan and Yanzhou Coal Mining Co climbed 1.1% to 6.63 yuan.
Hong Kong stocks rises 0.62%
Hong Kong share market closed higher in volatile trade, registering first gain in three consecutive sessions. The gain was largely backed by better than expected China economic data, with energy stocks leading advances after oil prices surged amid violence in Iraq.
The benchmark Hang Seng Index closed 0.62% higher from prior day closure at 23319.17. Turnover increased to HK$50.74 billion from yesterday's HK$48.43 billion. The benchmark index opened weaker on the overnight slide of the Dow, but gradually recovered its losses as the A-share market rallied.
Shares of energy producers climbed as crude oil prices rose sharply on Thursday on fears that escalating conflict in Iraq could disrupt supply from OPEC's second-largest producer. Cnooc , China's largest offshore oil producer, rose 1.9% to HK$13.86. PetroChina Co added 0.4% to HK$13.86, and China Petroleum & Chemical Corp rose 1.8% to HK$7.44.
Shares of energy producers climbed as crude oil prices rose sharply on Thursday on fears that escalating conflict in Iraq could disrupt supply from OPEC's second-largest producer. Brent crude rose by US$2.45 or 2.2% to a 6-month high of US$112.40 a barrel with US Nymex up by US$2.13 or 2.0% to a 9-month high of US$106.53 a barrel. Cnooc , China's largest offshore oil producer, rose 1.9% to HK$13.86. PetroChina Co added 0.4% to HK$13.86, and China Petroleum & Chemical Corp rose 1.8% to HK$7.44.
Shares of dairy companies declined after China Stale Council announced plan to reform and consolidate the infant formula industry. Mengniu Dairy (02319) dipped 2.7% to HK$35.5. Yashili (01230) slid 5.2% to HK$2.9.
Shares of retailers rose on hopes of improved traffic in shopping malls due to promotional activities for World Cup. The lottery sector also benefited from the hype. Wharf (00004) shot up 3% to HK$57.55. Wheelock (00020) jumped 3.3% to HK$33.35. China Lotsyn (01371) added 1.4% to HK$0.75. Rexlot (00555) ascended 1% to HK$0.95.
Weichai Power gained 6% to HK$31.10 after resuming trading today. The diesel-engine maker said it had obtained effective control over Germany's Kion.
Sensex falls
Key benchmark indices declined on fears of spiralling crude oil prices due to chances of a civil war in Iraq, one of the major oil producers in the world. After rising to 25,688.31 in morning trade on the back of positive retail inflation and IIP data, the Sensex fell back to end lower by 348.04 points, or 1.36 per cent, to 25228.17. Similarly, the National Stock Exchange index Nifty closed 107.80 points, or 1.41 per cent, lower at 7542.10 after surging to 7,678.50 in early trade.
Oil and gas stocks fell as Brent crude surged to nine-month highs amid concerns that escalating violence in Iraq could disrupt oil supplies.
Lupin fell 0.49% to Rs 983.95. The company announced at the fag end of the trading session that the company's US subsidiary, Lupin Pharmaceuticals Inc. (LPI) has launched its Ciprofloxacin for Oral Suspension, 5 g/100 mL (250mg/5 mL) and 10 g/100 mL (500 mg/5 mL) in the US having received final approval from the FDA earlier. It is a generic equivalent of Bayer HealthCare Pharmaceuticals, Inc.'s (Bayer) Cipro Oral Suspension in the same strength and indicated for the treatment of infections caused by susceptible isolates of the designated microorganisms in various conditions and patient populations.
India's industrial production rose 3.4% in April 2014, compared with a contraction of 0.5% in March 2014, data released by the government after trading hours on Thursday, 12 June 2014, showed. Fourteen out of the twenty two industry groups from the manufacturing sector registered positive growth during the month of April 2014 as compared to the corresponding month of the previous year. Industrial production contracted 0.1% during April-May 2014 over the corresponding period of the previous year.
The annual inflation rate based on combined consumer price index (CPI) for urban and rural India eased to 8.28% (provisional) in May 2014, from 8.59% (final) in April 2014, data released by the government after trading hours on Thursday, 12 June 2014, showed. Within the consumer price index, food prices inflation eased to 9.56% in May 2014, from 9.83% in April 2014. The rate of inflation based on the core CPI, which excludes food and energy prices was 7.72% in May 2014, unchanged from the level in April 2014.
Elsewhere in the Asia Pacific region- Taiwan's Taiex index fell 0.09% to 9196.39. South Korea's KOSPI index was down 1.03% to 1990.85. Indonesia's Jakarta Composite Index sank 0.16% to 4926.66. Malaysia's KLSE Composite jumped 0.15% to1876.74. Singapore's Straits Times index edged up 0.01% to 3293.25. New Zealand's NZX50 fell 0.47% to 5170.51.
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