Headline equities of the Asia Pacific market closed mostly down on Friday, 07 November 2014, pressured by profit taking on caution before a report on U.S. employment later in the global day and China trade data for October on Saturday.
Regional benchmark indices started the day mostly higher, cheered by a record close on Wall Street overnight and talk of further stimulus from the European Central Bank.
While announcing no new measures, the ECB sounded more dovish in November and signaled that it is moving towards public QE. President Mario Draghi restated that the goal of asset purchases is to raise the ECB's balance sheet to its March 2012 level. The policy statement delivered a strong stance on the size of the balance sheet and signaled a move towards government bond purchases. The ECB also left the main refi rate unchanged at 0.05%.
But the index reversed in afternoon trade, and finishing the day in negative terrain, on caution ahead of nonfarm payrolls data from the U.S due later in the day.
Investors are looking for more evidence the world's largest economy can sustain growth after the Federal Reserve ended bond purchases last month. A strong report on U.S. hiring from payrolls processor ADP suggested Friday's official monthly figures will show robust employment growth. If the payroll data tonight shows significant improvement, there are possibilities that the Fed may raise rates earlier than expected
Among Asian bourses
Nikkei rises 0.52%
Japanese share market advanced for sixth times today in seven consecutive sessions, aided by positive lead from offshore market overnight and yen depreciation to mid-115 level against greenback. The benchmark Nikkei Stock Average advanced 87.90 points, or 0.52%, to 16880.38. The index added 2.8% for the week. Most of gains came on the back of a second round of quantitative easing from the Bank of Japan and a shift by the 1.2 trillion yen Government Pension Investment Fund into an equity-heavy asset portfolio--both of which were announced Friday.
The yen depreciated to the mid-115 level against the greenback, near a seven-year high. The yen's weakness against the dollar has been aided by massive buying of foreign stocks and bonds in recent months. Japanese investment in foreign stocks continued last week with net purchases of Y326.1 billion, according to the Ministry of Finance, extending the streak of net buying to a ninth week. The cumulative amount during the period totaled roughly Y2.1 trillion. Japanese investors also picked up Y806.6 billion of bonds in the last week, the largest amount in 13 weeks.
Shares of export-related stocks advanced the most in Tokyo, buoyed by yen weakness against the dollar. The yen traded at 115.35 per dollar. Mazda climbed up 1.4% to 2,737 yen. Sony Corp climbed 1.2% to 2,258 yen. Daikin gained 1.9% to 7,139 yen after the Nikkei newspaper reported the company's full-year operating profit will reach about 190 billion yen, beating its forecast. Mitsubishi climbed 2.2% to 2,236 yen after the trading company said its first-half profit increased 15% from a year earlier.
Komatsu shares advanced 2.1% to 2,757.5 yen after the rating of the maker of construction machinery was raised to neutral plus from neutral at Iwai Cosmo Securities Co.
Suzuki Motor Corp. slid 5.8% to 3,510.5 yen after reporting its operating profit fell for the first time in eight quarters in July-September, as sluggish demand in Japan following an April sales tax hike continued to fan fierce, profit-eroding competition. Operating profit at Japan's fourth-biggest automaker fell 14% to 39.6 billion yen in the second quarter. Suzuki kept its typically conservative operating profit guidance at 188 billion yen for the full business year ending March 31.
Aussie market rises 0.8% on materials rally
Australian share market closed higher, on the back of broad based gain across the sectors, with shares of mining and energy companies being major gainers. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each gained by 0.8% to 5547.10 and 5522.10, respectively.
Strong overseas leads and a rebound in the resources sector helped counter the negative impact on the market of the ANZ and National Australia Bank trading ex-dividend. Iron ore miners performed well after Thursday's pullback due to weaker iron ore prices.
Shares of materials and resources stocks advanced the most in Sydney market. Among the major miners, Rio Tinto shares grew 1.2% to A$60.70, while iron ore miner Fortescue Metals jumped 4% to A$3.15. BHP Billiton added 2.1% to A$34.49.
Financial stocks were mixed as two of the major banks (ANZ and National Australia Bank) going ex-dividend. Commonwealth Bank rose 1.9% to A$82.76. Westpac Banking Corp added 1.3% to A$34.41. Australia and New Zealand Banking Group dropped 0.6% to A$33.60, while National Australia Bank ended down 0.7% lower at A$34.84.
Broadcaster Ten surged 17%, to 27 cents on the back of continued speculation that it was a takeover target.
Shanghai Composite falls 0.32% ahead of trade data
Mainland China share market closed down after erasing intraday gain late afternoon, amid caution before the release of trade data tomorrow that will likely show slowing growth in exports and imports. The benchmark Shanghai Composite Index, which tracks both A and B shares, closed 7.69 points, or 0.32%, down at 24218.17.
Over the weekend, China trade balance for October is schedule to release on Saturday. China's trade surplus was $30.9 billion in September.
Shares of railway companies declined on reports Mexico canceled China's bullet train tender. Mexico President Enrique Pena Nieto asked the communications and transport secretary, or SCT, to start a new bidding process for a high-speed train project. China Railway Group lost 4.7% and China Railway Construction slid 4.9%.
Shares of financial companies advanced, with brokerage shares being major gainers amid the prospect of an end to China's three-year halt in approvals for initial public offerings in the industry, after the securities regulator pledged to review Guosen Securities Co.'s application to sell shares. Everbright Securities Co. surged 7% and Huatai Securities Co. advanced 4.1%.
Hang Seng falls 0.42%
Hong Kong share market closed down in volatile trade, extending loses for fifth consecutive day, pressured by profit taking and lingering concerns over the status of a cross border stock trading scheme. The Hang Seng Index fell 0.42%, or 99.07 points, to 23550.24. Turnover increased to HK$73.44 billion from HK$58.33 billion on Thursday.
The benchmark index opened slightly weaker but recovered all its losses by midday on hopes of an imminent start of the Shanghai-HK Stock Connect as brokers received payment notices of RMB200,000 from the Shanghai bourse. But the index reversed in afternoon trade, and has fallen for five consecutive trading days.
Shares of bourse operator HKEx (00388) soared 2% to HK$175.6 after hitting a high of HK$180, ahead of news over the Shanghai-Hong Kong stock connector scheme. Other brokerages were also higher. Cinda Int'l (00111) soared 10.4% to HK$1.7. First Shanghai (00227) and Guotai Junan (01788) shot up 6.4% and 4.5% to HK$1.67 and HK$5.63. Chinese brokerages also rose across the board. CC Securities (01375) put on 5.5% to HK$4.01. CITIC Sec (06030) and Haitong Sec (06837) jumped 2%.
Lenovo (00992) dipped 4.8% to HK$10.26 after Barclays lowered its target price post earnings results. The company reported a 19% jump in net income in the second fiscal quarter, but revenue fell short of analyst expectations.
Rail-related stocks declined after the Mexican government scrapped the contract previously awarded to consortium led by China Rail Cons (01186), which plunged 5.8% to HK$8.02. China Railway (00390) also declined 5.5% to HK$4.85.
Sensex slides amid divergent trend among index constituents
Amid a divergent trend in various constituents of the index, key benchmark indices edged lower on the last trading session of the week. The barometer index, the S&P BSE Sensex, was down 47.25 points or 0.17% to settle at 27,868.63. As per media reports, at least a dozen new ministers are set to be inducted by Narendra Modi government as part of the cabinet expansion that is likely to take place on Sunday, 9 November 2014. Meanwhile, the Indian government is reportedly considering dropping a provision in the tax treaty between India and Cyprus that exempts capital gains made in India by investors from Cyprus from tax.
Index heavyweight and cigarette major ITC edged lower in volatile trade. Telecom stocks were in demand. Bharti Airtel rose in volatile trade after the company said it has decided to terminate the discussions with regard to the transaction for acquiring subscribers of Loop Mobile. Hero MotoCorp dropped on buzz private equity firm Bain Capital Partners sold nearly 4% stake in the company via bulk deal on NSE today, 7 November 2014. Power generation stocks edged lower. Metal and mining stocks declined.
Shares of public sector oil marketing companies rose on fall in crude oil prices. Pharma stocks gained on weak rupee, with Dr Reddy's Laboratories hitting record high. Private sector bank stocks were mixed. Shares of ICICI Bank and IndusInd Bank scaled record high. Axis Bank edged higher after the bank said it has allotted Senior Notes aggregating to $20,000,000 under the MTN Programme through its Dubai International Financial Centre (DIFC) branch. PSU bank stocks declined. IT major Infosys edged higher after the company today, 7 November 2014, announced a strategic partnership with Tableau Software, a global leader in rapid-fire, easy-to-use business analytics software. Realty major DLF gained on reports the Securities Appellate Tribunal has allowed the company to redeem Rs 1806-crore in mutual fund holdings in order to service outstanding loans.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.24% to 8912.62. South Korea KOSPI rose 0.18% to 1939.87. New Zealand's NZX50 rose 0.28% to 5418.99. Singapore's Straits Times index fell 0.14% at 3286.39. Indonesia's Jakarta Composite index dropped 0.93% to 4987.42. Malaysia's KLCI fell 0.43% to 1824.19.
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