Share market in the Asia Pacific region closed mixed in quiet and narrow trade on Monday, May 27, 2013. The MSCI Asia Index (minus Japan) rose 0.35%, while the MSCI Asia Pacific Index slid 1.1%.
Appetite for the riskier assets muted across the region throughout the day amidst lack of supportive cues from the US as of the Memorial Day holiday today. Meanwhile, lingering concerns about growth prospects of the world's two biggest economies also hinders risk sentiments.
Biggest concerns for investors right now is uncertainty over when the US Federal Reserve will taper off its asset purchases after differing interpretations of comments by Fed chairman Ben Bernanke last week. The US central bank is spending $85 billion a month buying bonds. That program has been keeping interest rates low in an effort to encourage borrowing, spending and investing.
Meantime, investors were also unsettled after figures from HSBC's preliminary purchasing managers' index (PMI) for China released Thursday fell to a seven-month low of 49.6 in May, putting it below the 50 mark indicating contraction. China's booming economy has been a major driver of global growth in recent years and investors worry when they see signs that it's slowing down. Comments Friday by Chinese President Xi that his country would not sacrifice the environment for temporary economic growth added to concerns about the weakness of China's recovery following weak manufacturing data.
In the Asia Pacific market, Japanese shares fell sharply on Monday, dragging the Nikkei down by 469.80 points at 14,142.65 after trading as low as 14,027.42, as offshore investors pulling funds amidst the current yen unpredictability.
The yen strengthened against other major currencies Monday in Asia after minutes from the Bank of Japan (BoJ) April meeting indicated some members of the central bank opposed the goal of 2% inflation within two years. The dollar was at 100.83 yen on Monday, appreciated from 101.38 yen late Friday in New York. The euro appreciated from 130.54 yen to 130.60 yen.
The BoJ minutes showed members are concerned about the rise in bond yields caused by the central bank's ultra-loose monetary stimulus efforts. Former economists Takahide Kiuchi and Takehiro Sato were among the members that expressed concern that targeting 2% inflation within two years was too much of a burden for an economy wracked by deflation dating back to at least the late 1990s.
Australia shares closed down on Monday, extending losses streak for fifth day in row, as sellers on the front foot on mounting jitters over growth prospect of world two largest economy after disappointing factory activity data from China, Australia's largest export market and a possible wind down of monetary stimulus in the U.S. The benchmark ASX200 index closed 0.47% lower at 4959.90, while the broader All Ordinaries index dropped 0.52% to 4938.60. Stocks fell more than 1% in the morning, but the market clawed back half it losses. Metal & mining shares tumbled with Rio Tinto down by 2.6% to A$53.11 and BHP Billiton lower by 1% to A$34.01.
Chinese stock market closed range-bound trading session tad above the neutral line as lingering expectations that the government will accelerate market-oriented reforms in a bid to ensure economic growth regains traction. Meanwhile, better than expected domestic industrial profits growth for April also supported buying. The Shanghai Composite Index rose 0.2% to 2293.08.
Chinese Premier Li Keqiang told business leaders in Switzerland on Friday that China will deepen the financial market reform, accelerate the development of multi-level capital markets, and steadily promote market-oriented interest rates
The China's Bureau of Statistics said on Monday that Chinese firms made profits of 436.7 billion yuan in April, up 9.3% from the same month last year, quickening from a year-on-year growth of 5.3% in March. The improved gains in April were caused by the low comparison base in the same month a year earlier, Yu Jianxun, an official from the bureau's industrial department, said in a statement accompanying the data. In the first four months on 2013, Chinese firms made total profits of 1.61 trillion yuan, up 11.4 per cent from the same period a year ago.
Hong Kong stock market closed quiet trading session slight higher after moving in narrow range. The benchmark Hang Seng Index ended up by 67.38 points to 22,686.05, registering first gain in five sessions in row, as gains in property and banking firms were more than offset by losses in casino-operators and telecommunication shares.
India's share market closed higher on the back of short covering amid volatility with buying in frontline shares of oil & gas, health care, realty, consumer durable and TECk counters. The barometer index, the S&P BSE Sensex, closed provisionally up 326.44 points or 1.66%, at 20.030.77. Index heavyweight Reliance Industries (RIL) surged nearly 5% after the company along with partners announced huge gas discovery in KG-D6 block. Another index heavyweight and cigarette major ITC also gained. The market breadth, indicating the overall health of the market, was positive. Shares of mortgage lender HDFC hit record high. Coal India rose ahead of its consolidated FY 2013 results later today, 27 May 2013. Sun Pharmaceutical Industries scaled record high ahead of Q4 results tomorrow, 28 May 2013. Shares of Britannia Industries galloped to record high after announcing strong Q4 results after market hours on Friday, 24 May 2013. Telecom stocks were in demand on reports that Reliance Communications (RCom) has raised basic rates for prepaid mobile-to-mobile calls by 33%.
Elsewhere, Indonesia's JKSE fell 1.36%, Malaysia's KLSE fell 0.33%, New Zealand's NZX50 shed 1.06% and Singapore's STI shed 0.06%. Taiwan's Taiex added 0.86% and South Korea's Kospi rose 0.33% after the Bank of Korea said consumer confidence there jumped to 104 to 102 last month.
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