Asia Pacific share market ended mixed on Tuesday, 03 May 2016, as weaker than expected China private manufacturing data countered by unexpected interest rate cut decision by the Reserve Bank of Australia.
The RBA cut its benchmark rate by 25 basis points to a record low 1.75%, noting that inflation data are unexpectedly low and that it is less concerned by the risk low rates pose to the housing market. A majority of economists polled by Reuters had expected no change.
China manufacturing sector remained in contraction in April with a Performance of Manufacturing Index score of 49.4 and, the latest survey from Caixin revealed on Tuesday. That was down from 49.7 in March. It also moved further beneath the boom-or-bust line of 50 that separates expansion from contraction. Among the individual components of the survey, output was little-changed from the previous month, as total new orders stagnated and new export work fell for the fifth month in a row. On Sunday, official data showed that China's manufacturing activity grew in April, albeit at a slower pace than in March.
Among Asian bourses
Australia Market surges after RBA rate cut decision
Australian share market ended sharply higher on Tuesday, 03 May 2016, after the Reserve Bank of Australia Board decided to lower the cash rate by 25 basis points to 1.75%, effective 4 May 2016. Most of ASX industry group advanced with shares in the property trusts, financials, and realty sectors being major gainers. At close of trade, the benchmark S&P/ASX 200 advanced 110.80 points, or 2.11%, to 5353.80. The broader All Ordinaries rose 103 points, or 1.94%, to 5415.
The banks and financial ended stronger, with Westpac Banking Corp up 2.3% to A$30.65, National Australia Bank 3.8% to A$27.63, and Commonwealth Bank 3.7% to A$75.02. ANZ Banking Group was up 5.6% to A$25.05, erasing early losses of as much as 4%, despite the heavyweight bank reporting that its fiscal first-half profit tumbled more than 20%.
Energy stocks were the biggest loser of the sectors of the ASX today dropping 1.36% after crude oil pulled back last night. Shares of Santos finished down 2.5% to A$4.60, Woodside Petroleum 0.4% to A$28.63, and Origin Energy 1.9% to A$5.31.
China Market rebounds after President comments
Mainland China stock market ended higher in volatile trade, as risk sentiments encouraged by hopes of improvements in corporate fundamentals and President Xi Jinping's after-market hours call late last Friday to maintain a healthy development of the stock market. Mainland market largely shrugged off a disappointing survey on China's manufacturing sector. The benchmark Shanghai Composite Index advanced 54.32 points, or 1.85%, to 2992.64. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, grew 56.79 points, or 1.8%, to 3213.54.
Chinese investors draw solace from the fact that the first-quarter performance of China-listed companies did not tumble as many had feared, while the economy has shown signs of stabilising. Combined quarterly profits of 2,837 mainland-listed firms dipped only 0.45%, while 666 companies, including some struggling steelmakers, had forecast they would post earnings increases or turn to profit during the first half, the official China Securities Journal reported on Tuesday.
On Friday, President Xi Jinping chaired a Communist Party's Politburo meeting of Chinese leaders who urged strengthening market supervision and protecting investor interests, according to a statement carried by official media.
Stocks rose across the board, with Chinese consumer staples, health care and IT stocks leading the charge. Shares of NanJing Pharmaceutical Co jumped 7.6%. Chinese alcohol makers led the consumer staples index rally, with prices of Wuliangye Yibin Co, Shanxi Fenjiu and Kouzi Distillery surging.
Hong Kong Market suffers 1.85% loses
The Hong Kong stock market finished the session sharply lower, dragged by the weaker than expected China's manufacturing PMI data and amid worries about the ability of global central banks to boost growth through aggressive policy easing. The benchmark Hang Seng Index dropped 390.11 points, or 1.85%, to 20676.94 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, lost 190.77 points, or 2.13%, to 8748.70 points. Turnover increased to HK$77.5 billion from HK$60.4 billion on Friday. The local market closed on Monday for a public holiday.
HSBC (00005) fell 1% to HK$51.5 after it reported 1Q pre-tax earnings fell 13.5% to US$6.11 billion. Hang Seng Bank (00011) slipped 1% to HK$139.
PICC P&C (02328) slid 6% to HK$13.36 after AIG Group disposed of 740 million shares worth of HK$9.7 billion. PICC Group (01339) also dipped 2% to HK$2.99.
Sensex falls for the second day in a row
IT, banking sector stocks, shares of public sector companies and index heavyweights ITC and Reliance Industries led losses for key benchmark indices triggered by weakness in global stocks. The barometer index, the S&P BSE Sensex, fell 207.27 points or 0.81% to settle at 25,229.70. The Nifty 50 index fell 58.90 points or 0.75% to settle at 7,747.
State Bank of India (SBI) dropped after the bank announced reduction in lending rates by 5 basis points (bps) across tenures. Coal India edged lower as the company's coal production and offtake in April 2016 fell short of the company's internal target. Shares of public sector oil marketing companies (PSU OMCs) declined after the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas announced that the under-recoveries for the month of May 2016 on PDS Kerosene in Mumbai is expected to increase to Rs 9.12 per litre from Rs 8.73 per litre in April 2016. Tata Steel eked out small gains on reports that the global metals group Liberty House will today, 3 May 2016, submit an indicative bid to buy Tata Steel's UK assets. Aurobindo Pharma surged on reports that a foreign brokerage has initiated coverage on the Aurobindo Pharma stock with an "outperform" rating. In overseas stock markets, European shares edged lower as the euro hit a roughly nine-month high against the dollar. Euro strength makes goods from European exporters more expensive to buy for holders of other currencies. Trading in US stock index futures pointed to losses for US stocks at the opening bell. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 109.50 points at the opening bell today, 3 May 2016. Meanwhile, the San Francisco Federal Reserve President John Williams reiterated yesterday, 2 May 2016, his view that the US economy is ready for higher interest rates, but flagged the risk of broad-based declines in asset prices as a result.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 was up 0.8% to 6843.01. South Korea's KOSPI index grew 0.42% to 1986.41. Taiwan's Taiex index slid 1% to 8294.12. Malaysia's KLCI dropped 1.3% to 1651.44. Indonesia's Jakarta Composite index added 0.1% to 4812.26. Singapore's Straits Times index shed 1% to 2811.20. Japan's stock market was closed in observance of public holiday.
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