Asia Pacific share market closed mostly down on Tuesday, 17 January 2017, as investors caution ahead of a speech by UK Prime Minister Theresa May, who is expected to outline her government's Brexit strategy nd Friday's inauguration of Donald Trump as U.S. president.
Sell orders overwhelmed regional stocks ahead of a speech by British Prime Minister Theresa May later in the day on her government's plan for negotiations over its exit from the European Union, which some traders fear will see Britain lose access to the bloc's single market.
May is expected to deliver a speech on her negotiation plan with the European Union (EU) once Britain triggers Article 50 of the Lisbon Treaty, which establishes a two-year negotiation period on the departure of an EU country. Her speech will reveal what London is looking for in its future relationship with the EU, although it is not expected to reveal too many details in order not to prejudice the negotiations. Still, wary investors are waiting for clues about the process and its impact on the global economy.
Overall, market activity was light due to the lack of cues from US markets, which were closed on Monday for the Martin Luther King Day holiday, and investors globally were cautious over what the new US presidency might bring once Donald Trump is inaugurated on Friday.
Among Asian bourses
Australia Market falls on caution ahead of global political events
Australian share market closed down, as investors showed caution ahead of political uncertainty in Europe and the US. All ASX sectors declined, exception being bullion sector, with financial, realty, and consumer-exposed stocks being major losers. At the closing bell, the benchmark S&P/ASX 200 index declined 49 points, or 0.85%, to 5699.40, while the broader All Ordinaries index dropped 48.30 points, or 0.83%, to close at 5754.70.
Shares of financial sector were hard hit, with the four big banks leading losses. Among major banks, Australia & New Zealand Banking Group declined 1.3% to A$30.40, Westpac 0.9% to A$32.77, National Australia Bank 1.1% to A$30.80, and Commonwealth Bank of Australia 0.9% to A$83.35.
Materials and resources shares closed lower as profit booking after iron ore pulled back from a 3-year high. Rio Tinto shed 0.8% to A$62.70 and Fortescue Metals 3.3% to A$6.13. BHP Billiton erased 0.2% to A$26.71.
Bucking the trend, higher gold prices drove the ASX gold index up, with Newcrest Mining and Northern Star Resources adding 1.6% and 2%, respectively.
Nikki falls on yen strength, British uncertainty
The Japan share market closed down for second straight session after see-sawing between gains and losses throughout the session, hurt by yen ascent against major currencies amid caution ahead of British Prime Minister Theresa May's speech on Brexit plans due later in the global day, as well as President-elect Donald Trump's inauguration stateside at the end of the week. Every industry category on the main section lost ground, led by fishery, agriculture and forestry, real estate and construction issues. The 225-issue Nikkei Stock Average ended down 281.71 points, or 1.48%, at 18,813.53, its lowest closing level since Dec. 8. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 21.54 points, or 1.41%, lower at 1,509.10.
Stocks of Japanese exporters were hardest hit, pressure by a surge in the yen. The greenback sank to 113.40 yen from 114.04 yen on Monday. Takata extended its losses, diving 4.63% to 905 yen, after a 10% fall Monday, as the firm on Friday agreed to plead guilty to fraud and pay $1 billion to settle a deadly airbag scandal that sparked the auto industry's biggest-ever safety recall. Nintendo rose 1.65% to 23,585 yen, while Toyota fell 1.58% to 6,719 yen and Hitachi fell 1.21% to 644.4 yen. Uniqlo operator Fast Retailing, a market heavyweight, slipped 1.89% to close at 36,700 yen.
China Stocks gain on bargain hunting, PBOC liquidity injection
Mainland China stock market ended higher, powered by bottom hunting in heavily battered stocks following five-day losing streaks and the central bank liquidity injection into the banking system. The blue-chip CSI300 index, which tracks large companies in Shanghai or Shenzhen, was up 0.21% to close at 3,326.36. The Shanghai Composite Index added 0.17% to close at 3,108.77. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.17% to 1873.02. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, jumped 2.02% to 1,867.87 points.
The People's Bank of China stepped up its injections as the Chinese New Year holiday approaches, when cash demand usually rises substantially. The week-long Chinese New Year holiday starts 27 January 2017 till 2 February 2017. The central bank injected CNY100 billion via seven-day reverse repos and CNY230 billion via 28-day reverse repos at its open-market operations on Tuesday. The moves resulted in a net injection of CNY270 billion at the OMO for the day, after a net addition of CNY165 billion on Monday.
The PBOC's liquidity injections indicate that the government wants to stabilize equities ahead of Lunar New Year, helping calm markets today.
Leshi Internet Information & Technology Corp surged by the 10% daily limit. Company Chairman Jia Yueting's LeEco technology empire has secured strategic investments, according to a statement released Friday.
Beijing Sinnet Technology Co. surged by its daily limit in Shenzhen after the company said in a preliminary earnings statement that its 2016 profit jumped by as much as 208% from the previous year
Hong Kong Stocks rise amid caution before May's speech
The Hong Kong stock market ended higher in light trading, on tracking gains in Mainland China bourses. However, market upside momentum capped on caution over the likelihood of Britain pulling out of the European Union's single market and Friday's inauguration of Donald Trump as U.S. president. The move came ahead of Ms May's speech tonight, in which she is likely to say that Britain is seeking a clean break from the EU, in remarks that are expected to provide the most significant indication yet about her government's plans. Nearly all sectors gained ground, led by industrial stocks. The Hang Seng Index added 0.54% or 122.82 points to close at 22,840.82. The Hang Seng China Enterprises index, or the H-share index, rose 0.37% or 36.10 points to 9,702.19. Turnover decreased to HK$50.7 billion from HK$56.9 billion on Monday.
HSBC (00005) and Standard Chartered (02888) rose 1.6% and 7% to HK$64.2 and HK$71.35 after Goldman Sachs raised its target prices for the banks to HK$74 and HK$66 (from HK$70 and HK$61) respectively. The research house saw lower-than-expected volatility for both banks since the Brexit outcome.
CK Property (01113) yesterday spent HK$210 million to buy back its own shares. It gained 2.2% to HK$50.7. CKH Holdings (00001) inched down 0.2% to HK$90.4. CKI Holdings (01038) fell 1% to HK$60.95. Power Assets (00006) added 0.4% to HK$72.8.
Mengniu Dairy (02319) dipped 2% to HK$14.36 after Credit Suisse downgraded its rating and target price. It was the worst blue-chip loser.
Sensex, Nifty settle with small losses
Indian benchmark indices settled with small losses after a range-bound and lackluster session of trade as lower European stocks dampened sentiment. The barometer index, the S&P BSE Sensex, declined 52.51 points or 0.19% to settle at 27,235.66. The Nifty 50 index shed 14.80 points or 0.18% to settle at 8,398. Profit booking emerged after last week's solid surge in indices as investors maintained caution ahead of British Prime Minister Theresa May's speech on Brexit later today, 17 January 2017.
Bank stocks were mixed. Metal & mining stocks declined. Index heavyweight Reliance Industries (RIL) dropped after the company reported small growth in profitability and drop in gross refining margin in Q3.
IT major TCS advanced after the company announced a partnership with Aurus, Inc., a global leader in innovative payments technology, to deliver payment solutions for retailers using TCS OmniStore, a first of its kind unified store commerce platform. Another software pivotal HCL Technologies edged higher after the company issued a clarification to the stock exchanges on a law suit filed against its wholly owned subsidiary HCL America Inc.
Cigarette major ITC rose on reports a foreign brokerage reiterated 'buy' call on the stock with a target price of Rs 290 after cigarette price hike.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 was up 0.45% to 7069.59. South Korea's KOSPI index added 0.4% to 2071.87. Taiwan's Taiex index added 0.7% to 9354.53. Malaysia's KLCI jumped 0.3% to 1663. Indonesia's Jakarta Composite index fell 0.1% to 5266.94. Singapore's Straits Times index shed 0.35 point to 3012.77.
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