Headline indices of the Asia Pacific market closed mixed after trimming early losses on Thursday, April 04, 2013, as traders await headlines from the conclusion of the European Central Bank and the Bank of England policy meeting later today after the Bank of Japan's launches new easing measures.
The ECB was expected to leave its monetary policy unchanged but there is speculation of an expansion in QE from Bank of England on Thursday. The Bank of Japan, under newly appointed Governor Haruhiko Kuroda, announced plans to implement bolder monetary easing steps at its two-day policy board meeting that ended in the early afternoon.
BoJ Governor Haruhiko Kuroda decided to introduce a new phase of easing scheme called Quantitative and Qualitative Monetary Easing. Japan Central bank will double the monetary base and the amounts outstanding of Japanese government bonds (JGBs) as well as exchange-traded funds (ETFs) in two years and more than double the average remaining maturity of JGB purchases. With a view to pursuing quantitative monetary easing, the central bank will conduct money market operation so that the monetary base will increase at an annual pace of about 60-70 trillion yen. With a view to encouraging a further decline in interest rates across the yield curve, the Bank will purchase JGBs so that their amount outstanding will increase at an annual pace of about 50 trillion yen. In addition, JGBs with all maturities including 40-year bonds will be made eligible for purchase, and the average remaining maturity of the Bank's JGB purchases will be extended from slightly less than three years at present to about seven years -- equivalent to the average maturity of the amount outstanding of JGBs issued. With a view to lowering risk premia of asset prices, the Bank will purchase ETFs and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual pace of 1 trillion yen and 30 billion yen respectively.
In the Asia pacific region, Tokyo share market registered second day of sharp gain after the Bank of Japan expanded monetary stimulus. The Nikkei Stock Average spurted 2.2% to 12,634.54 on the top of 3% gain prior day. Shares of Financial and real estate-related companies showed the biggest impact from the new policy. Among banks, Mitsubishi UFJ Financial Group added 5.5% to 578 yen, while Mizuho Financial Group gained 5.1% to 206 yen. Daiwa Securities Group led big brokerages with a 4.1% advance to 660 yen. Bellwether property developer Mitsui Fudosan surged 3.1% at 2,801 yen, while rival Sumitomo Realty & Development gained 10% to 4,165 yen.
In Australia, Australian share market dived into the sea of red for straight second day, with shares in bullion, mining, and resources heavyweights continued leading retreat. The benchmark S&P/ASX200 index declined 0.89% to 4913.50, while broader All Ordinaries index lost 0.95% to A$4919.30. Risk aversion selloff took toll as geopolitical jitters about North Korea and the US and weaker offshore leads and pullback in commodity prices weighed on investor minds.
Australian Gold miner shares tumbled today, dragging the gold industry index 6% lower due to fall in gold price. Shares in Newcrest Mining dropped 5.2% to A$18.49, Perseus Mining 8.8% to A$1.51, and Kingsgate 10% to A$3.35. Regis Resources sank 2.8% to A$3.85, St Barbara 8.1% to A$1.02, Evolution Mining 9.6% to A$1.265, Unity Mining 5.9% to A$0.08, and Northern Star Resources 6.3% to A$0.895.
In New Zealand, NZ share marked rallied as the market appeared to reward Restaurant Brands for the Carl's Jr roll-out and 440,000 would-be kiwi investors who will see the MightyRiverPower offer documents tomorrow. The NZX50 rose 17.31 points, or 0.39%, to 4430.16.
In South Korea, Seoul shares declined n mounting tensions with North Korea, with auto stocks dropping even more steeply after a recall of cars and SUVs in the United States. The Korea Composite Stock Price Index (KOSPI) dropped 1.2% to 7959.45. selling pressure intensified on reports that North Korea had set an April 10 deadline for South Korean firms to pull out of the Kaesong joint industrial zone, which had once been a symbol of cooperation. However, the main board pared losses late afternoon as South Korea's Ministry of Unification denied the report, saying that North Korea had requested exit plans by April 10, not a complete pullout.
In India, headline indices of the Indian market declined for a second day, as overseas funds sold shares amid concern economic growth is weakening and corporate earnings may disappoint. The benchmark Sensex provisionally closed 1.55% down at 18509.70. Technology shares suffered heavy fall, with down 3% and Tata Consultancy Services 2.5% lower, on negative economic data from the United States, which is the biggest outsourcing market for Indian tech firms. Bank shares also fall a day after data showed advances grew at a slower pace in 2012/13 compared with a year earlier, and fell short of the central bank's projection, hurt by lower demand for credit from companies in a slowing economy.
Elsewhere, Indonesia's Jakarta Composite dropped 1.2% and Singapore's Strait Times shed 0.4%, while Malaysia's KLSE Composite rose 0.2%. Markets in China, Hong Kong and Taiwan are closed today for a holiday.
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