Regional market started the day on back footing as risk aversion flared on tracking the dive overnight in U.S. internet companies, led by a plunge in Twitter's share price, added to negative sentiment from tensions in Ukraine, where pro-Russian militants are clashing with military forces in the country's unstable east.
Among Asia bourses, Japanese share market tumbled on catching losses on the offshore markets in previous two sessions. Meanwhile, the yen appreciation against the US dollar also fuelled selloff in the local bourse. The benchmark Nikkei 225 index lost 2.93% to 14033.45 at the close while the Topix index of all first-section issues fell 2.58% to 1152.01. Japanese market closed on Monday and on Tuesday for national holiday.
Shares of exporters were down, due to yen appreciation against the US dollar. A stronger yen is bad for Japanese exporters as it affords them less latitude to cut prices on goods they sell overseas. Among yen-sensitive shares, Panasonic fell 3.4% to 1,080 yen. Honda Motor Co., a carmaker that gets 46% of its revenue in North America, lost 2.9% to 3,371 yen. Automaker Honda Motor lost 2.9% to 3371 yen while Kyocera Corp fell 4.3% to 4533 yen.
SoftBank, which owns 34% of Alibaba, slid 5.1% to 7,420 yen after the China's largest e-commerce operator, may raise as much as $20 billion via an initial public offering in the US. Some traders opted for a 'sell-on-the-news' strategy as expectations for a record IPO are largely already priced into SofBank's stock.
Japanese financials were also weaker, with brokerage Nomura Holdings dropping 3.5%, Sumitomo Mitsui Financial Group off 4.5% to 4020 yen, and casualty insurer Tokio Marine Holdings 5% to 2928 yen.
Idemitsu Kosan Co. tumbled 6.1% to 2,101 yen after the oil refiner projected net income that trailed estimates.
Minutes of the April 7-8 policy meeting released today, showing the most members of the Bank of Japan agreed to keep easing monetary policy until inflation stabilizes at 2%.
In Australia, Australian share market declined, with shares in technology, miners, financials and consumer-related companies led retreat. The benchmark S&P/ASX200 and the broader All Ordinaries each dropped by 0.8%% to 5435.80 and 5419.10, respectively.
Turnover was relatively light in Australian market with 1.60 billion shares changed hands worth of A$4.14 billion as investors awaiting side-line for domestic employment data due on Thursday and the Reserve Bank of Australia's monetary policy statement schedule on Friday. The budget would deliver on Tuesday. Investors were also awaiting U.S. Federal Reserve chief Janet Yellen's testimony to the Joint Economic Committee later Thursday.
Materials and resources stocks were broadly down, amid worries the iron ore price could sink further. The bulk commodity has come under pressure recently, losing more than 10% since mid-April to hover at $106 a tonne. BHP was down 1.3% to A$37.17, Rio Tinto 1.5% to A$60.60 and Fortescue 3.5% to A$4.63.
Rare earths producer Lynas Corp was down 10% to A$0.135 after outlining plans the previous day to raise A$40 million to boost working capital during ramp-up at the company's Malaysian Lynas Advanced Materials Plant (LAMP).The plan will allow existing shareholders to purchase additional shares at a discount to the market price for a particular period without paying brokerage fees. LYC said that the new shares will rank equally with existing shares on issue. The price will be a 17.5% discount to the average price during the five days up to and including the shortfall date, likely to be Tuesday 27 May.
Financials also finished lower, with top four lenders led declines. ANZ Banking Group was down 0.9% to A$33.77, Commonwealth Bank of Australia 0.9% to A$78.55, National Australia Bank to 0.8% to A$33.84 and Westpac Banking Corp 0.6% to A$34.50.
Shares of retailers and consumer goods producers declined after Australian Bureau of Statistics data showed retail sales rose weaker than expected by 0.1% in March. Woolworth was down 0.7% to A$36.95, David Jones 0.5% to A$3.94 and Myer Holdings 0.5% to A$2.15. GrainCorp was down 1.8% to A$8.82. Kathmandu (KMD) was a standout, up 7.4% to A$3.77 after announcing its 3Q sales grew by nearly 4% due to colder weather in Australia and New Zealand.
In China, Mainland China share market extended losses on lingering concerns that the renewal of initial public offerings (IPOs) on the mainland will cause a glut and soak up much cash. Meanwhile, poor service PMI data and concern over home sales slowdown fuelled risk aversion selloff. The benchmark Shanghai Composite Index declined 0.9% to finish the session at 2010.08, after touching an intraday low of 2008.45 and intraday peak of 2024.63.
On Monday evening, the China Securities Regulatory Commission unveiled prospectuses of 30 initial public offering (IPO) applicants, bringing the total number to 241 since April 19. The move marked the approaching restart of new IPOs, stirring concerns about the bearish Chinese stock market. Fear among investors of IPOs is common in China's stock market, as the country's IPO approval system has been long criticized as it allows unqualified companies to enter the capital market which has caused huge losses to individual investors.
Land sales in 20 major cities fell 5% in March from a year earlier, the biggest drop in at least a year, according to data from China Real Estate Information Corp. The value of land sales in third-tier cities declined 27% last month, according to SouFun Holdings, the nation's biggest real-estate website owner.
The HSBC China services Purchasing Managers' Index fell to 51.4 in April from 51.9 in March, HSBC Holdings PLC said on Wednesday. A reading above 50 indicates expansion from a month earlier, and a reading below that indicates contraction. China's official nonmanufacturing PMI, a competing index issued by the government, rose to 54.8 in April from 54.5 in March, according to a statement from the China Federation of Logistics and Purchasing on Saturday.
Shares of consumer companies and property developers sank after a private services index declined and concern mounted that home sales are slowing. BYD Co tumbled 5.6%. Suning Commerce Group Co., an operator of retail chain stores, slid 4.2%. China State Construction Engineering Corp. paced losses by property companies after the central bank said it will toughen monitoring of the real-estate industry.
In Hong Kong, headline indices of the Hong Kong share market declined in tandem with losses on Wall Street and Mainland China, with financials and property developers stocks led retreat. The benchmark Hang Seng index was down 1.05% to 21746.26, while Hang Seng China Enterprises Index lost 0.9% to 9655.56. The local stock market closed on Tuesday on a public holiday.
Among the HK 50 blue chips, 35 fell and 13 rose while remaining two stocks closed steady. China Resources Land declined 4.7% to HK$14.86, contributing 5-points losses to the benchmark Index and becoming the worst-performing blue chip in percentage term. China Unicom advanced 2.8% to HK$12.34, contributing 6-points gains to the benchmark Index and becoming the best-performing blue chip in percentage term.
Chinese developers listed in Hong Kong dropped after the China Securities Journal said some medium and small property companies are facing liquidity problem. CR Land slid 4.7% to HK$14.86. COLI (00688) also sank 4.5% to HK$17.74. Evergrande (03333) dipped 3.6% to HK$3.24 after Deutsche Bank chopped its target price for the developer.
Retailers were also weaker, with Giordano (00709) wiping off 16.6% to hK$4.31 after the company issued profit warning. Other retail players were weaker. Sa Sa (00178), Bonjour (00653), I.T. (00999) and Prada (01913) fell between 2.2%-3.4%. Wharf (00004) slipped 2.5% to HK$51.35.
In India, key benchmark indices edged lower on weak global cues. The 50-unit CNX Nifty hit its lowest level in almost six weeks. The barometer index, the S&P BSE Sensex, hit one-week low. The Sensex was provisionally down 207.36 points or 0.92%, off close to 230 points from the day's high and up about 15 points from the day's low.
Infosys edged lower after a foreign brokerage downgraded the stock to sell from buy and cut its target price to Rs 2,750 from Rs 4,050, saying a turnaround at the IT outsourcer could take longer than expected. The stock shed 3.2% to Rs 3,062. The brokerage has cited Infosys' high staff attrition and its focus on boosting margins at the expense of stabilising revenue and market share as other risk factors.
Most bank stocks edged lower after the Reserve Bank of India barred banks from levying foreclosure charges on individual borrowers for all floating rate loans with immediate effect. The Reserve Bank of India (RBI) today, 7 May 2014, said that commercial banks will not be permitted to charge foreclosure charges/pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect. In a separate notification, the RBI also said that henceforth commercial banks are not permitted to levy penal charges for non-maintenance of minimum balances in any inoperative savings bank account. Among private sector banks, ICICI Bank (down 0.2%), HDFC Bank (down 0.58%), Yes Bank (down 2.35%), Federal Bank (down 1.35%), and Axis Bank (down 0.52%), declined. Kotak Mahindra Bank rose 0.47%.
Among PSU bank stocks, Canara Bank (down 1.41%), Union Bank of India (down 4.07%), Bank of India (down 1.15%), and Punjab National Bank (down 0.76%) declined. State Bank of India (SBI) (up 1.22%) and Bank of Baroda (up 0.1%) gained.
Lupin fell 1.19% to Rs 990.20 after announcing Q4 results. The stock was volatile. The stock hit high of Rs 1,022 and low of Rs 985.65. The company's consolidated net profit jumped 35.5% to Rs 553 crore on 20.3% increase in net sales to Rs 3051.50 crore in Q4 March 2014 over Q4 March 2013. Lupin's operating profit jumped 33.2% to Rs 876.90 crore in Q4 March 2014 over Q4 March 2013. The operating profit margin (OPM) edged up to 28.7% in Q4 March 2014, from 26% in Q4 March 2013. The result hit the market during trading hours today, 7 May 2014.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index declined 0.22%. South Korea's KOSPI index was down 1%. New Zealand's NZX50 rose 0.27%. Singapore's Straits Times index fell 0.28%. Indonesia's Jakarta Composite Index added 0.57%. Malaysia's KLSE Composite closed flat at 1860.43.
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