Asia Pacific market closed flat-to-weaker on Friday, July 26, 2013, as investors adjusted their portfolio on coution ahead of the US Federal Reserve's policy meeting next week for indications on stimulus. Overall, trading has been quiet as a lot of people wait for next week's meeting of the Federal Open Market Committee in the U.S. for guidance on the tapering of US government bond purchases
In the Asia Pacific region, Australian shares close slightly higher as gains in the big banks overshadowed losses in the miners. The benchmark S&P/ASX200 edged up 6.4 points, or 0.1%, to 5042.0, while the broader All Ordinaries gained 5.5 points, or 0.1%, to 5023.8.
In New Zealand, NZ shares were up, sending the NZX 50 Index 5.194 points, or 0.1%, higher at 4581.99. Tower, the general insurer, rose 2.2% to $1.88, recovering some of the ground shed at the start of the week when a magnitude 6.5 earthquake shook Wellington and sparked concerns about a rush of insurance claims. Fletcher Building, the biggest company on the NZX 50, rose 0.5% to $8.31.
In Japan, Tokyo stock market fell down as the dollar turned sharply lower against the yen, denting shares of major Japanese exporters. The benchmark Nikkei 225 index ended down 2.97%, or 432.95 points, at 14,129.98, while the Topix index of all first-section shares lost 2.93%, or 35.26 points, to 1,167.06.
The weaker dollar is the main culprit for today's selloff in Tokyo. The dollar fell to its lowest level in about two weeks against the Japanese currency on Friday, trading at 98.70 yen compared with 99.24 yen in New York and well off the 100.00 yen level in Tokyo on Thursday.
Export-related stocks declined in Tokyo as the US dollar 61% slid under the 98-yen level, after straddling 100 yen in Asian trading the previous day. Shares of Advantest Corp tumbled 9.68% after the technology firm on Thursday reported a net loss, compared with a profit in the year-ago period. Auto major Nissan declined 1.35% in spite reporting a 14% increase in quarterly profit, while Suzuki Motor Corp slid 2.2% in a downbeat market despite upbeat results at its Indian subsidiary.
Banks were also retreated, shrugging off a Nikkei newspaper report the nation's three so-called megabanks had likely generated a 20% increase in quarterly profits. Among the trio, Sumitomo Mitsui Financial Group Inc sank 3.87% and Mitsubishi UFJ Financial Group Inc dropped 4.7%, while Mizuho Financial Group Inc tanked 2.8%.
JFE Holdings Inc tanked 8.3% to 2363 yen after declining to provide a full-year profit forecast, citing difficulty in reaching a rational estimate. The steel maker said that its current profit will total 170 billion yen for the year ending March 2014. The statement on the outlook came as JFE reported a 27% gain in net income to 23 billion yen ($233 million) in the three months ended June 30. First-quarter sales at JFE increased 15% to 840 billion yen, while operating profit more than doubled to 25 billion yen, the company said in the statement.
In South Korea, shares in the SK market closed largely higher, with KOSPI Composite ended up 0.1% at 1910.81. Samsung Electronics Co was off 0.9% after it posted second-quarter earnings suggesting slowing earnings momentum in spite of solid smartphone sales.
In China, Key benchmark indices on the China share market fell down for third straight day on Friday, July 26, 2013, as wave of profit taking among industrials stocks after the government ordered companies in 19 industries to cut outdated production capacity, part of efforts to create sustainable growth. The Shanghai Composite Index declined 10.32 points or 0.51%, to 2010.85. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, slid 0.61% to 2,224.01.
China has ordered more than 1400 companies in 19 industries to cut excess production capacity this year, part of efforts to shift toward slower, more- sustainable economic growth. Steel, ferroalloys, electrolytic aluminum, copper smelting, cement and paper are among areas affected, the Ministry of Industry and Information Technology said in a statement yesterday. Excess capacity must be idled by September and eliminated by year-end, the ministry said, identifying the production lines to be shut within factories.
The latest steps reinforcing view that China is serious in its efforts to restructure the economy and is prepared to tolerate the necessary pain. More than 92 million tonnes of excess cement capacity and about 9.75 million metric tons of outdated iron and steel production capacity are expected to be wiped out under the government's plan. The ministry also ordered 654,400 tons of outdated copper capacity and 260,000 tons of outdated galvanized aluminum capacity shut by the end of September.
Shares of industrials companies declined sharply in Shanghai after the government ordered cuts to production capacity in 19 industries. BBMG, a cement company, fell 3.3% to 4.93 yuan. Baotou Steel dropped 1.5% to 23.42 yuan and Shandong Chenming Paper declined 2.3% to 3.77 yuan.
BOE Technology Group Co declined 1.4% to 2.16 yuan, adding to yesterday's 8.4% slump after the company said it planned a share sale that may be China's largest private placement. The company said it would sell as much as 46 billion yuan ($7.5 billion) in shares to investors to finance expansion.
In Hong Kong, rally by banking shares has helped the Hong Kong's share market close higher in volatile trade. The benchmark Hang Seng Index ended up 67 points to 21,968, off an intra-day high of 22,034 and low of 21,834.
AIA inched up 0.4% to HK$35.5 after announcing its net profit for the six months ended 31 May 2013 rose 33.9% year-on-year to US$1,934 million. Kunlun Energy slid 4.5% to HK$12.36 on news that Sinopec Corp plans to raise gas price. Tencent Holdings rose 4.4% to HK$349, benefiting from online and mobile games advertising. Also, a surge in U.S. technology stocks including Facebook Inc. yesterday is stimulating today's gains.
Shares of casino operators declined on reports Macau government plans to discuss renewal of the casino operating concessions in 2015. Sands China slipped 3.5% to HK$40.5. Galaxy softened 0.9% to HK$40.3. SJM and MGM fell 3.4% and 1.8% to HK$19.12 and HK$21.5.
In India, Indian stock market settled lower after moving into positive terrain from negative terrain in mid-afternoon trade. The S&P BSE Sensex was provisionally down 54.70 points or 0.28%, up about 50 points from the day's low and off close to 155 points from the day's high. The market fell for the third consecutive session and registering first weekly fall in five.
Among the sectoral indices, the S&P BSE Metal fell 3.09%, the S&P BSE Bankex was 2.36% lower and the S&P BSE Realty Index declined 1.69%. The S&P BSE FMCG Index was up 0.49% and the S&P BSE IT Index was 0.24% higher.
Rate sensitive were under some pressure ahead of the Reserve Bank of India's policy review meet on concerns that the central bank may hike interest rates in order to support rupee from depreciating against the US dollar.
The foreign institutional investors sold Indian shares worth Rs 442.94 crore while domestic institutional investors were net sellers worth Rs 138.8 crore on Thursday as per the provisional data from the National Stock Exchange.
Elsewhere, Taiwan's Taiex Index fell 0.2% and Indonesia's JKSE Composite dropped 0.3%. Singapore's Straits Times Index closed virtually flat, while Malaysia's KLSE Composite declined 0.81 point lower.
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