Asia Pacific share market ended deeper into the sea of red after erasing initial gains on Thursday, 21 January 2016, as sliding oil prices highlight fears over the prospects for global economic growth. MSCI's broadest index of Asia-Pacific shares outside Japan erased early solid gains and teetered in and out of negative territory in afternoon trade. It was last down 0.5%.
Oil prices remain an important driver of sentiment. Oil prices remained under pressure on worries about an oversupplied market, further aggravated by news that Iran will lift production after sanctions were lifted. After hitting fresh 13-year lows on Wednesday, oil prices fell further. Brent crude was down 1.3% at $27.52 a barrel while US crude shed 1.4% to $27.95, after crashing 6.6% on Wednesday.
The plunge in energy prices alongside the retreat by many base metals to multi-year lows is encapsulating traders' fears about faltering growth in China. Investors are also worried that the commodity sector's travails including the slashing of investment budgets, jobs and dividends are causing stresses in some exposed parts of the banking system. In addition there is talk that energy exporting nations have to sell financial assets to plug fiscal gaps caused by reduced oil revenues.
The ongoing pain of falling oil prices and heightened anxieties over slowing global growth have renewed a fresh wave of risk aversion and this has consequently punished the global stock markets
Among Asian bourses
Nikkei tanks deeper into bear terrain
Japan share market ended deeper into bear market territory amid risk aversion selloff as sliding oil prices highlight fears over the prospects for global economic growth. Meanwhile, appreciation of yen against the basket of major currencies also weighed down investors sentiments. All 33 TOPIX sectors fell into negative terrain, with shares of Financial Business, Real Estate, Real Estate, Foods, Electric Power & Gas, and Banks issues being major losers. The 225-issue Nikkei Stock Average ended 398.93 points, or 2.43%, down at 16017.26. The benchmark Nikkei 225 index has tumbled 23.2% from the cycle peak touched in 24 June 2015. A decline of 20% or more is considered a bear market in technical terms. The Nikkei 225 last entered a bear market in June 2013. The Topix index of all Tokyo Stock Exchange First Section issues slumped 37.48 points, or 2.8%, to 1301.49, taking its loss since a high on 10 August 2015 to ~24%.
Nippon Electric Glass Co. jumped 3.8% to 554 after JPMorgan Chase & Co. raised its rating on the stock. Yaskawa Electric Corp. dropped 8% to 1267 yen after cutting its profit forecasts. Maeda Road Construction Co. sank 7.2% after the infrastructure company was probed by Japanese authorities over possible antitrust violations.
Sharp Corp. shares ended 5.8% higher at 128 yen after spiking as much as 25% after a report Taiwan's Foxconn Technology Co. will offer $5.3 billion to take over the struggling Japanese electronics maker.
Australia Market posts third gain for the year
Australian share market has posted just its third gain for the year amid broad-based buying, with materials and energy stocks leading the gains. At the close, the benchmark S&P/ASX 200 index added 22.50 points, or 0.46%, to 4864 points, while the broader All Ordinaries index dropped 20.70 points, or 0.42%, to 4917.60 points.
Shares of materials and resources were stronger amid bottom fishing, despite further falls in commodity prices, with Rio Tinto gaining 1.6% to A$38.36. Iluka gained 1.7% to A$5.52, while Oz Minerals was up 6.6% to A$3.73. Iron ore miner Fortescue Metals fell 1% to A$1.445 on tracking dip in the iron ore price.
Shares of energy players were mixed amid falls in the oil price overnight. Global oil benchmark Brent crude was down 2.54% to $28.03. Among oil explorer and refiners, Woodside Petroleum fell 1.5% to A$25 after flagging massive write-down due to weaker oil prices. Oil Search sank 0.5% to A$5.64, but Santos grew 3.2% to A$2.56 and Origin Energy jumped 6.7% to A$3.69.
China Market drops after IPO announcement
Mainland China stock market ended session at its lowest close in more than a year, amid risk aversion selloff across the board, with shares of industrial, developers and consumer-discretionary companies being major losers. The selloff pressure intensified on deepening concern that the nation's economic slowdown and worries about market liquidity after a gauge of interbank funding availability in the mainland jumped the most in 13 months. The Shanghai Composite Index tumbled 3.23%, or 96.21 points, to close at 2880.48. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, fell 71.07 points, or 2.41%, to 2873.62.
Among SSE sectors, all 10 sectors of the SSE index declined, with telecommunication sector was top loser among the SSE sectoral group, down by 5.3%. Meanwhile, industrial sector declined 3.9%, materials down 3.9%, information technology down 3.7%, consumer discretionary down 3.4%, healthcare down 3.3%, utilities down 3.2%, energy down 2.6%, consumer staples down 2.2%, and financials down 2.1%.
Mainland brokerages and banks slipped in late-afternoon trade, with Citic Securities sliding by 4.17%, Bank of China falling 1.15% and China Construction Bank closing down 1.18%.
Hong Kong Market tumbles
The Hong Kong stock market ended down in volatile trading, as selloff pressure intensified on tracking weakness in Mainland China market and other regional bourses amid global economic growth and commodity price fears. All major sectors dived deeper, with oil producers and property developers led declines. The benchmark Hang Seng Index has lost 344.15 points, or 1.82%, to 18542.15 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, sank 179.80 points, or 2.24%, to 7835.64 points. Turnover increased slightly to HK$96.5 billion from HK$92.3 billion on Wednesday.
HSBC (00005) slipped 2% to HK$51.9 ahead of its earnings report on next month. The global bank said it has yet to make the final decision regarding its headquarters move. StanChart (02888) also weakened by 3% to HK$51.5. The bank has applied to the regulator in Zimbabwe to cut jobs in the country.
Shares of Sinopec jumped 0.8% to HK$3.91 after reports that Saudi Arabia's state-owned oil company Saudi Aramco said it was in advanced talks to invest in refineries in China and was in talks with CNPC and Sinopec for investments in refining, marketing and petrochemicals.
CNOOC shares declined 2.4% to HK$6.42 after Chinese energy giant has cut its targeted output for 2016, the first in over a decade, as fears grow over the health of the Chinese economy and plunging oil prices. CNOOC, China's largest offshore oil and gas producer, said it targeted production of 470 million to 485 million barrels of oil equivalent, a drop from 495 million barrels in 2015. It would be the first decline since 1999.
Sensex falls below 24,000 mark
Losses for index heavyweight Reliance Industries (RIL) and oil sector stocks outweighed gains for bank stocks and index heavyweight Infosys, with key benchmark indices registering modest losses. The barometer index, the S&P BSE Sensex, fell 99.83 points or 0.41% to settle at 23,962.21. The 50-unit Nifty 50 index shed 32.50 points or 0.44% to settle at 7,276.80. The Sensex fell below the psychological 24,000 mark and hit its lowest closing level in more than 20 months. The Nifty hit its lowest closing level in more than 19 months.
Idea Cellular dropped ahead of the announcement of its third quarter results. Shares of oil exploration and production firms declined as crude oil prices edged lower. Shares of PSU OMCs edged lower on media reports that the government is proposing to levy a 0.5% Swachh Bharat cess on petrol and diesel. Axis Bank surged after reporting good third quarter numbers. Tata Motors edged lower, with the stock extending its recent losses triggered by concerns about China's economic slowdown. Car maker Maruti Suzuki India dropped, with the stock extending its recent losses triggered by a foreign brokerage raising concerns about the company's profit margins.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.46% to 7664. South Korea's KOPSI slipped 0.3% to 1840.53. New Zealand's NZX50 dropped 0.5% to 6080.90. Malaysia's KLCI sank 1.1% to 1600.92. Singapore's Straits Times index sank 1.1% at 2532.70. Indonesia's Jakarta Composite index dropped 0.3% to 4414.
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