Asia Pacific share market declined on Thursday, July 25, 2013, as profit taking among heavyweight stocks in the wake of overnight losses in US markets due to disappointing results from several top companies along with a weaker Chinese manufacturing data. Meanwhile, investor also sold stocks on caution ahead of German IFO survey and Britain's second quarter GDP data
The earnings season has kicked off in earnest in major financial centres, keeping markets in check as investors gauge the business outlooks amid challenging global growth prospects.
A weaker Chinese manufacturing data pressurized the regional indices further. China's slowdown is in large part self-induced. Its leaders are trying to shift the basis of China's growth away from reliance on exports and industrial investment in favor of consumption which they hope will be more self-sustaining. That means large stimulus is unlikely.
Commodities were mostly under pressure given ongoing worries about a slowdown in China. Copper fell 0.4% to $7,023 a tonne and U.S. crude slipped 0.4% to $105 a barrel.
Among Asian bourses, the Japanese stocks declined sharply, dragging the benchmark Nikkei Stock Average 1.14% lower to 14,562.93, its lowest close since July 12. The Tokyo shares fell for second consecutive day on concerns about market overheating and speculation that U.S. monetary easing may be rolled back. Meanwhile, yen appreciation against the greenback intensified selloff.
Canon Inc dropped 5.4% to 3245 yen after the camera maker lowered its full-year earnings forecasts, as worse-than-expected economic conditions in China and Europe are expected to slow digital camera sales. Canon cut its full fiscal year net profit forecast by 10% to 260 billion yen while lowering its sales outlook by 3%.
Shares of Kao Corp tumbled 3.4% to 3120 yen, extending yesterday's 6.2% following a voluntary recall of a skin-whitening lotion sold by its unit Kanebo.
Australian stock market trimmed losses to finish mixed, thanks to dazzling gains in realty, financials and property trusts heavyweights helped offset losses among miners and elsewhere. The All Ordinaries Index closed 0.07% down at 5018.30, while the ASX 200 Index finished edge 0.01% up at 5035.60.
Macquarie Group was down 2.3% to A$44.65 despite flagging it expects to lift profits this financial year, thanks in part to the falling Australian dollar. MQG issued a statement saying its FY14 result is expected to be an improvement on FY13 provided market conditions are not worse than those experienced over past 12 months.
Newcrest Mining shares declined 1.3% to A$12.53 after the gold miner has flagged lower production in the September quarter after a strong lift to gold and copper output in the June quarter. In the June quarter gold output rose 25% to 642,032 ounces with copper up 20% at 22,818 tonnes. Newcrest flagged the lower production in the September quarter in its latest quarterly production report issued this morning, but with output for the full year to June, 2014 to come in between 2-2.3 million ounces.
China and Hong Kong stock market declined, in spite of the Chinese government announcement of some limited stimulus measures helped limit losses. The Shanghai Composite dropped 0.60% after opening to the upside, while Hong Kong's Hang Seng Index lost 0.31%.
China's cabinet stated on Wednesday that it would cut taxes for small businesses and seek to aid some exporters, while also increasing state investment in railways. The railway announcement had particular impact on shares, with China Railway Construction Corp jumping 2.49% in Hong Kong, while China Railway Group rallied 0.24% and CSR Corp climbed 2.44%. In Shanghai, China Railway Construction zoomed 2.86% higher and Daqin Railway Co gained 3.77%.
Weakness in metal-and-mining stocks was a common theme in multiple regional markets, after Comex gold futures fell 1.1% overnight in the US following sharp recent gains, while copper futures lost 0.6%. Gold producer Zijin Mining Group Co fell 2.8% in Hong Kong and 1.2% in Shanghai.
Indian market declined sharply, dragged down by losses in FMCG, power and metals on the settlement day of July series expiry. The BSE Sensex declined 1.42% to 19804.76 falls. Ambuja Cements slumped 10.4% while ACC fell 4% after owner Switzerland-based Holcim announced a complex restructuring of its two Indian units that was seen by some analysts as detrimental to minority shareholders.
Shares of Jaiprakash Associates plunged 10% after a Supreme Court bench headed by Chief Justice of India P Sathasivam rejected its plea on deferred payment of Rs 100 crore as penalty fined by the Himachal Pradesh High Court.
Muthoot Finance shares closed 0.8% higher after its first quarter provisions and write-offs dropped significantly to Rs 8.5 crore from Rs 46.4 crore in previous quarter. Meanwhile, net profit of the company declined to Rs 194 crore from Rs 246 crore and net interest income slipped to Rs 554.3 crore from Rs 591 crore year-on-year.
Elsewhere, New Zealand's NZX50 lost 0.5%. South Korea's KOSPI fell 0.1%. Taiwan's Taiex fell 0.4%. Indonesia's JKSE lost 0.9%. Malaysia's KLSE fell 0.1%. Singapore's STI declined 1.2%.
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