Asia Pacific share market ended down on first trading session of month, Friday, 1 April 2016, as weaker than expected surveys on Japanese manufacturing sparked heavy fund selling and overshadowed upbeat news from China's vast factory sector. A renewed slip in oil prices also added to the cautious mood. The markets participants also quietened down ahead of the release of a stack of US economic data later on Friday.
Among Asian bourses
Nikkei falls to 1-month low
Japan share market ended first trading session of the fiscal 2016-17 to a 1-month low, as appetite for risk assets sapped after the Bank of Japan's quarterly corporate survey showed business sentiment among large manufacturers sank to its lowest level in nearly three years. The Nikkei average stumbled 594.51 points, or 3.55%, to finish at 16164.16, its lowest close since March 1. Japan's benchmark index ended the week 4.9% lower. The Topix index closed down 42.24 points, or 3.4%, at 1301.40, with each of its 33 subindexes in negative territory. The index ended the week 4.7% lower.
The Tokyo market commenced trading with back footing, with sentiment hurt by the Bank of Japan's worse-than-expected tankan quarterly business sentiment survey for March, released just before the opening bell. The survey showed the headline diffusion index for large manufacturers' business conditions came to plus 6, down from plus 12 in the previous tankan and marks its first fall in two quarters. The Nikkei average accelerated its downswing and briefly lost more than 600 points in the afternoon due to heightened risk-averse sentiment stemming from the dismal BOJ survey. Investors also found it difficult to buy stocks ahead of the release of U.S. government jobs data for March later on Friday.
Panasonic plummeted 12.13%, a day after revealing that group operating profit for the year to March 2017 is expected to fall 35 billion yen from the previous year's estimate to 375 billion yen. Other export-oriented issues were battered due to growing worries about their fiscal 2017 earnings caused by the disparity between the assumed exchange rate in the tankan survey and recent market levels. Among them were automakers Toyota, Honda and Nissan, as well as technologies Sony, Canon and Toshiba.
On the other hand, mobile carriers Softbank Group and KDDI were upbeat, along with gyudon beef-on-rice restaurant operator Matsuya Foods.
Australia Market ends lower
Australian share market ended steep lower, as bank shares face renewed heavy selling on concerns over the lenders' exposure to bad debts. The markets participants also quietened down ahead of the release of a stack of US economic data later on Friday. At close of trade, the benchmark S&P/ASX 200 dropped 83.40 points, or 1.64%, to 4999.40. The broader All Ordinaries lost 78 points, or 1.51%, to 5073.80.
Shares banks and financials suffered heavy losses as concerns continue to mount over the lenders' exposure to bad debts, amid weak resources sector and rising mortgage delinquencies. National Australia Bank was down 2.1% to A$25.68, Commonwealth Bank 2.6% to A$72.99, Westpac 2.3% to A$29.56 and ANZ 2.8% to $22.81.
Shares of materials and resources companies bumped up after China's manufacturing activity unexpectedly expanded in March for the first time in nine months. China's purchasing managers' index rose to 50.2 in March from 49.0 in February, showing manufacturing activity was expanding. BHP Billiton added 0.7% to A$16.97. Rio Tinto gained 1.1% to A$43.14, while Fortescue Metals rose 0.4% to A$2.56.
The Australian Industry Group's performance of manufacturing index was remain above the 50 level separating expansion from contraction, lifting 4.6 points in March to 58.1. That's the highest level since April 2004 and the ninth consecutive month of growth.
China Market closes firmer
Mainland China stock market ended firmer on first trading session of the month, Friday, 1 April 2016,, as activity in China's factory gauge showed improving conditions for the first time in eight months during, suggesting the government's fiscal and monetary stimulus is kicking in. but market gains were limited due to the impact from Standard & Poor's downgrade of China's credit outlook. The benchmark Shanghai Composite Index rose 3.27 points, or 0.11%, to 3003.92. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 1.81 points, or 0.06%, to 3218.09.
China released the official Purchasing Managers' Index (PMI) on Friday morning, which showed activity in China's manufacturing activity unexpectedly expanded in March for the first time in nine months, offering some signs that the economy is improving. The manufacturing purchasing managers index rose to 50.2 in March. The measure matches its highest level since November 2014. The non-manufacturing PMI rose to 53.8 from 52.7 in February. A separate, private PMI reading from Caixin Media and Markit Economics rose to 49.7 in March to the highest level since February 2015.
Late on Thursday, rating agency S&P downgraded its outlook for China's sovereign credit rating to negative from stable, saying the government's reform agenda is on track but likely to proceed more slowly than expected.
Shares of energy and material companies registered the steepest gains among 10 industry groups. Sinopec Shanghai Petrochemical Co. jumped 8.8%. Wuhan Iron & Steel Co. paced an advance for metal companies, increasing 3.8%. Aluminum Corp. of China added 2.3%.
Industrial & Commercial Bank of China and PetroChina Co, long considered targets of government buying during down days because of their large index weightings, both erased earlier losses.
Liquor companies led declines among consumer-staples shares, with Kweichow Moutai Co. sliding 1%. East Money Information Co. fell 2.9%.
Hong Kong Stocks down 1.34%
The Hong Kong stock market closed lower, as investors risk sentiments hurt after rating agency Standard & Poor's downgraded its outlook for China and Hong Kong. S&P on Thursday cut its outlook for China's sovereign credit rating to negative from stable, and also downgraded the outlook for Hong Kong. Shares fell across the board, with the energy sector among the biggest decliners. The benchmark index opened up 9 points at 20,786, which marked the intra-day high. Even though China's official and Markit PMIs staged rebound on March, the benchmark saw its losses widen in late trade to 321 points at 20,455. The benchmark Hang Seng Index dropped 277.78 points, or 1.34%, to 20498.92 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, shed 160.39 points, or 1.78%, to 8842.86 points. Turnover reduced to HK$65.3 billion from HK$71 billion on Thursday.
Macau gaming counters were lower as gross gaming revenue for March registered decline of 16%, overshooting market expectations. Melco (00200) plunged 5% to HK$10.26 as its earnings slid 93% to HK$100 million. Sands China (01928) dived 5% to HK$30.1. It was the worst performing blue chip. Galaxy Ent (00027) sagged 3.8% to HK$28.
S&P today revised the outlook to negative from stable on0 Chinese government-related entities following sovereign rating action. China Shenhua (01088) dipped 4% to HK$11.7. CNOOC (00883) fell 3% to HK$8.87. China Mobile (00941) slipped 1% to HK$85.65.
HK retail sales growth has fallen for 12 consecutive months, with February sales plunging 20.6%, way above market expectations of 7.8% decline. Belle (01880) dipped 2% to HK$4.39. Bonjour (00653) dropped 2.6% to HK$0.37. Chow Tai Fook (01929) ebbed 1% to HK$4.82.
Indian indices snap 2-day winning streak
Losses for IT, telecom stocks and index heavyweight Reliance Industries (RIL) outweighed gains for stocks of public sector banks and index heavyweights ITC and HDFC, with the two key benchmark indices registered small losses. The barometer index, the S&P BSE Sensex, fell 72.22 points or 0.28% to settle at 25,269.64. The Nifty fell 25.35 points or 0.33% to settle at 7,713.05.
Shares of companies engaged in exploration & production of natural gas extended losses registered during the previous trading session after the Petroleum Planning & Analysis Cell (PPAC) attached to the Ministry of Petroleum & Natural Gas announced a reduction in locally produced natural gas price for the six-month period April-September 2016. Cairn India (down 0.71%) and ONGC (down 2.79%), edged lower. Oil India was up 0.93%. The price has been cut by almost 20% to $3.06 per million British thermal units (mmBtu) on gross calorific value (GCV) basis for the period 1 April 2016 to 30 September 2016 from $3.82 per mmBtu for the period from 1 October 2015 to 31 March 2016. PPAC made the announcement after trading hours yesterday, 31 March 2016. Shares of ONGC, Oil India and Cairn India edged lower yesterday, 31 March 2016, after media reports suggested that the gas price will be cut by about 20% after the half-yearly price review.
Separately, PPAC set the ceiling price at $6.61 per mmBtu on GCV basis for the gas produced from deepwater, ultra deepwater and high pressure-high temperature areas for the six-month period 1 April 2016 to 30 September 2016. It may be recalled that the government last month finalized proposal to grant marketing, including pricing freedom for the gas produced from deepwater, ultra deepwater and high pressure-high temperature areas in its bid to boost gas exploration and production in the country. The higher pricing for gas produced from deepwater, ultra deepwater and high pressure-high temperature areas is expected to result in estimated additional gas production of around 35 mmscmd. The country's present gas production is around 90 mmscmd. Index heavyweight Reliance Industries slipped 1.11% to Rs 1,033.65.
Punjab National Bank (PNB) rose 3.66% to Rs 87.80. The bank announced lending rates based on marginal cost of funds to be effective from today, 1 April 2016. PNB's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 9.15%, for one month will be 9.2% and for three months will be 9.3%. The MCLR on 6-month loans will be 9.35% and for one-year loans the rate would be 9.4%, the bank said. MCLR for three-year loans would be at 9.55% and loans with five-year maturity would carry an MCLR of 9.7%, the bank said. The announcement was made after market hours yesterday, 31 March 2016.
Bank of India rose 3.61% to Rs 100.55. The bank said that it allotted 46.39 lakh equity shares to General Insurance Corporation of India on preferential basis on 30 March 2016 at Rs 86.22 per share. The announcement was made after market hours yesterday, 31 March 2016.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 fell 0.7% to 6708.02. Taiwan's Taiex index sank 1% to 8657.55. South Korea's KOPSI dropped 1.1% to 1973.57. Malaysia's KLCI eased 0.4% to 1710.55. Singapore's Straits Times index fell 0.8% to 2818.49. Indonesia's Jakarta Composite index eased 0.05% to 4843.19.
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