Asia Pacific share market declined on Thursday, April 18, 2013, registering third day of fall this week, on weak cues from Wall Street overnight and lingering jitter about global economic growth. The MSCI Asia Pacific Index was trading 1.1% down late afternoon.
Risk aversion selloff triggered broadly in the regional market on tracking weak finish of the offshore market overnight and sharp pullback in commodities prices. Both European and US stock market tumbled on Wednesday on renewed concerns about global growth and disappointing corporate earnings reports.
Commodities prices suffered sharp plunge on Wednesday, with copper, seen as a gauge for manufacturing and China-related growth, shedding over 3% in the wake of a declining euro, growth expectation downgrades from the International Monetary Fund and downbeat economic data out of Europe. Silver fell to its lowest settlement price since October 2010, weighed by the dollar and data showing that European car sales slowed in March. Oil prices tumbled for a sixth straight session on Wednesday, with Brent crude futures falling below $98 per barrel for the first time since July as rising U.S. fuel supplies added to overall concern about global oil demand.
Investors remain concerned about the outlook for global economy after slew of weaker than expected macroeconomic numbers and downward revision of global growth from the International Monetary Fund. Bringing a sharper focus to these concerns in the last 24 hours after the head of the German central bank warning the European recovery may take up to a decade. Bundesbank head Weidmann warned that "overcoming the crisis and the crisis effects will remain a challenge over the next decade." And he noted that while Eurozone might recover this year, "the calm that we are currently seeing might be treacherous".
Looking ahead to the European and US sessions; In the UK retail sales figures will be released. In the US, weekly figures on the number of people claiming unemployment benefits will be release. Additionally The Phillidephia Federal Reserve will release its survey of economic activity. A week retail sales report is anticipated in the UK. Investors will be paying close attention to the US data given its ability to move sentiment substantially. Additionally, earnings reports are due from Morgan Stanley, Microsoft and Google.
G20 meeting will also be a main focus towards the end of the week. It's reported that the draft statement reiterated the pledge to refrain from competitive devaluation and move to market-determined exchange rate systems. Japan will likely to escape from direct criticism even though the yen has weakened drastically in the past few months on expectation of BoJ easing. Also, the statement would noted that global outlook is generally somewhat weaker and uneven" with "unbalanced" recoveries among developed and emerging economies. The draft noted that "fiscal drag, policy uncertainty, impaired credit intermediation, private deleveraging, and an incomplete rebalancing of global demand continue to weigh on global growth prospects". And it urged US and Japan to carry out credible plans for medium-term fiscal consolidation.
In the Asia Pacific, Tokyo share market fell down sharply, weighed down by tracking overnight fall in offshore market, pullback in commodities prices, and yen appreciation against the dollar and the euro. Meanwhile cautious ahead of the start of two-day meeting of finance ministers and central bankers from Group of 20 countries later today also fueled selloff. The benchmark Nikkei Stock Average settled the day lower by 1.22% at 13,220.07, while the broader Topix index of all first-section issues fell 1.15% to 1,122.97.
Trade statistics for March 2013 from the Ministry of Finance released on Thursday, showing that Japan logged a record trade deficit of 8.17 trillion yen in fiscal 2012, the second straight year of red ink, as a territorial spat with China and the European debt crisis stifled exports, with energy imports surging due to the halt of nuclear power plants. Exports fell 2.1% in the April-March fiscal year from the year before, to 63.9 trillion yen ($652.4 billion) while imports rose 3.4% to 72.1 trillion yen ($735.8 billion).
The Japan Department Stores Association reported on Thursday that all-store sales at department stores nationwide totaled 544.7 billion yen in March, while same-store sales rose 3.9% on the year, marking the third straight month of increase. Sales of art and jewelry rose 15.6%. Same-store sales at department stores in the Tokyo metropolitan area stood at 137.7 billion yen, up 6.4% and marking the third consecutive month of expansion.
the Australian market slipped lower on Thursday, April 18, 2013, with the S&P/ASX200 losing 1.6% to 4924.40, while broader All Ordinaries index eased 1.65% to 4911.30, washing out more than previous session gain and some A$25 billion off the market's capitalization.
Materials and resources stocks tumbled heavily in Sydney due to fall in base metals on the London Metal Exchange on Wednesday. Index leader BHP Billiton declined 4.4% to A$30.65, Rio Tinto shares dropped 4.6% to A$52.07. Fortescue Metals dropped 7.8% to A$3.453. Iluka Resources shares dropped 6.2% to A$8.71 after the mineral sands miner cut production by nearly half in the March quarter, and said it will reduce it even more as prices fall. Poor prices and weak demand led to a 21% fall in mineral sands revenue of A$139.9 million, from A$177.1 million in the same period last year. The company said sales volumes were actually higher during the quarter, with the lower revenue reflecting a drop in prices. Shares of bullion companies tumbled, dragging the gold index 6.7% down, as gold futures resumed their downward march. Newcrest Mining sank 7.1% to A$15.89, while Perseus Mining lost 7.9% to A$1.22 and Kingsgate 11.4% to A$2.40.
Woodside Petroleum shares were down by 3.5% to A$33.86 after the company announced it has shelved another significant growth option, revealing it has ceased talks with other gas-field owners to expand its Pluto LNG venture, a week after abandoning expensive plans to build a new plant at James Price Point. Woodside said its output in the three months to March surged to 21.9 million barrels, up from 14.1 million barrels in the previous corresponding period on the back of the Pluto ramp-up and the ongoing performance of its North West Shelf business. Revenues surged by 21% to $US1.445 billion.
New Zealand's NZX 50 Index fell 36.16 points, or 0.8%, to 4442.10, as investors assessed the potential threat to power company earnings from a Labour Party-Green Party plan to overhaul the electricity sector if elected. Contact Energy, TrustPower, Infratil and Vector all declined.
The Real Estate Institute of New Zealand data showed the median price per hectare for rural land rose 11.3% to NZD22,317 per hectare in March from March 2012. The March reading was a 1.7% increase from February. Farm sales slightly eased.
South Korea's Kospi was dragged lower by 1.24% amid weakness in technology shares a day after Apple, the largest U.S. tech stock by market value, briefly slipped below the mentally important USD400 per share level during Wednesday's U.S. session.
China's benchmark Shanghai Composite Index advanced 0.17% to 2197.60 with gain in shares of financials, industrials, and discretionary goods industry overshadowed weakness in materials, energy, and staples blue chip stocks. Chinese stocks were among the region's bright spots after the Ministry of Commerce said in a statement that foreign direct investment into the world's second-largest economy jumped 5.65% last month to $12.4 billion. Foreign direct investment in China in the first quarter rose 1.44% to $29.9 billion, according to the data.
Hong Kong market ended volatile session modestly lower on Thursday, April 18, 2013, registering fourth day of straight fall, as risk aversion selloff on tracking weak cues from offshore market and on concerns about china economy. The blue-chip Hang Seng Index fell 102.36 points, or 0.5%, to 21569.67. The benchmark index has corrected 9.9% from its year-to-date high of 23944 hit on Feb. 4.
Among HK blue chips, China Mobile inched up 0.2% to HK$81.1. HSBC edged down 0.4% to HK$79.65. Cathay Pacific was up 2.9% to HK$12.98 after Deutsche Bank upgraded it to Buy from Sell and raised its target price to HK$15.00 from HK$11.00.
The Hong Kong Monetary Authority announced today the composite interest rate, which is a measure of the average cost of funds of banks, was unchanged at 0.25% at the end of March, same as its level at the end of February. During the month, the weighted average cost for interbank funds increased slightly, which was offset by a decrease in the weighted average cost for deposits.
Hong Kong's seasonally adjusted unemployment rate increased from 3.4% in December 2012 - February 2013 to 3.5% in January - March 2013. The underemployment rate also increased from 1.5% in December 2012 - February 2013 to 1.6% in January - March 2013, data from the Census and Statistics Department showed. Comparing January - March 2013 with December 2012 - February 2013, increases in the unemployment rate (not seasonally adjusted) were mainly observed in the cleaning and similar activities, and accommodation and food services sectors. As to the underemployment rate, increases were mainly seen in the postal and courier activities and construction sectors.
Indian stocks closed sharp higher, with the BSE Sensex up 1.5% to 19016.46, led by rate sensitive stocks gain after Indian 10-year bond yields fall to 7.76 percent, the lowest since July 28, 2010, after the government said exports had hit $300 billion for the fiscal year ended March, further stocking rate cut hopes. Oil marketing companies such as Hindustan Petroleum Corp gained on hopes recent slump in crude prices would lower the cost of under-recoveries.
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