Headline shares of the Asian Pacific market closed mixed in choppy trade on Tuesday, June 18, 2013, as investors' pondered sideline amid uncertainty whether the U.S. Federal Reserve will maintain its monthly bond purchases.
Risk sentiments across the region remain subdued despite a triple digit gain for the Dow Jones Industrial Average overnight. Traders were cautious amid uncertainty over Fed's massive quantitative easing scheme after the Financial Times reported that Federal Reserve Chairman Ben Bernanke plans to say he is close to tapering the central bank's $85-billion-a-month in asset purchases.
The Fed will start its two-day FOMC policy meeting later today, with Bernanke scheduled to speak after the central bank's decision on Wednesday, July 19. Investors are closely waiting for the Federal Open Market Committee policy outcome which will provide clues on how long the Fed will maintain its $85-billion-a-month in bond purchases.
Financial markets have been gyrating in the 3 1/2 weeks since Bernanke told Congress the Fed might scale back its effort to keep long-term rates at record lows within "the next few meetings" earlier than many had assumed. Bernanke cautioned that the Fed would slow its support only if it felt confident the job market would show sustained improvement.
In the Asia Pacific market, Tokyo shares closed mixed after moving zigzag in tight range throughout the day. The Nikkei Stock Average was down 0.2%, to 13,007.28, registering first fall in three days. The Topix index of all first-section shares rose 0.15% to 1,086.40. Export related stocks burnt the most in Tokyo, as the dollar was trading in the 94-yen range, lower than the 95 yen per dollar that some exporting companies assume for the current fiscal year. However, gains in developers, brokerages and marine shipper issues helped to limit overall market losses.
Toyota Motor rose 1.8% to 5,800 yen after the company raised its fiscal year domestic sales target to 1.5 million vehicles, about 50,000 more than previously forecast, on expectations for stronger demand for hybrids and new models.
Sony was up 4.4% at 2,036 yen on reports that one of its largest shareholders, hedge-fund investor Daniel Loeb's Third Point, sent a second letter to the company reiterating that Sony should sell 15% to 20% in its entertainment business. It also indicated the fund had increased its Sony stake to 6.9% from 6.3% in May.
Sharp Corp added 1.2% at 429 yen on reports it is considering making photocopiers for Samsung Electronics. The arrangement would be part of strengthening of ties between the two companies that could also lead to a further investment in Sharp by the South Korean electronics giant.
Japan's industrial production rose 0.9% month-on-month in April, revised from a 1.7% growth reported in the preliminary report. The industrial production grew less than previously estimated in April, final data from the Ministry of Trade and Industry showed Tuesday. In March too, production recorded a monthly growth of 0.9%. On yearly basis, production fell 3.4% in April. The preliminary report showed an annual decline of 2.3%.
In the Australia, share market finished slight lower after trimming initial losses. The benchmark S&P/ASX200 index fell 0.2% to finish at 4814.40, while the broader All Ordinaries shed 0.2% to 4794.60. The Australian market had fallen over 1% early today as investors chose to book profit after the minutes of latest RBA meets indicated board members is prepared to cut further cash rate even though the Australian dollar is falling. However the market recovered most of losses late afternoon as offshore funds returned to bet on a weaker currency
The Australian dollar declined against the greenback, presently at 95.17 U.S. cents, down from 95.63 cents late Monday after minutes of RBA meeting revealed prospects of further cut in the country's interest rate.
Minutes from the Reserve Bank of Australia's meeting earlier this month indicated the bank was prepared to cut interest rates further if the move is determined to be necessary. The bank's policy board judged that the inflation outlook as currently assessed might provide some scope for further easing, should that be required to support demand, according to the minutes. The RBA on June 4 held the cash rate at 2.75%, a record low, following an unexpected quarter-point cut in May aimed in part at bolstering the non-mining and energy sectors of the economy.
In china, Headline indices on the Chinese market closed tad above the neutral line as gains in lenders, developers, consumer goods, retailers, and tech stocks mostly offset by falls in materials and resources and energy shares. The Shanghai Composite Index added 0.14% to 2,159.29 while the smaller Shenzhen Composite Index gained 0.2% to 979.43.
Chinese lenders stocks surged after the Central Huijin Investment Ltd, a unit of China's sovereign wealth fund, increased its holdings in the country's four biggest banks. Ping An Bank led gains for lenders, advancing 2.6% to 19.73 yuan. China Construction Bank Corp advanced 0.4% to 4.65 yuan, Industrial Bank Co 1.9% to 16.64 yuan and ICBC 1% to 4.16 yuan.
Chinese developers stocks climbed up after the National Bureau of Statistics said in a statement on Tuesday that new home prices in China's climbed up in almost all cities in May. Prices climbed from a year earlier in 69 of the 70 cities tracked by the government, as the government's latest property measures failed to deter buyers. China Vanke paced gains for developers, rising 1.1% to 10.44 yuan. Poly Real Estate, the second-biggest developer, climbed 1.4% to 11.12 yuan.
In Hong Kong, City share market closed virtually flat after recouping losses on Tuesday, June 18, 2013. The Hang Seng Index ended down 0.02 points to 21,225. The benchmark index was down more than 200 points at one stage. Appetite for risk were subdued after as data showed foreign direct investment in China slowed in May and ahead of the start of two-day US central bank meeting later today.
In India, key benchmark indices declined today, snapping two-day winning spree due to selling pressure in rate-sensitive counters mainly in banking, consumer durable and auto amidst capital outflows from foreign funds. The Sensex closed provisionally at 19228.29, down by 97.58 points or 0.5% from prior day closure.
Elsewhere in the region, New Zealand's NZX50 added 0.3%. Taiwan's Taiex Index rose 0.2%. South Korea's KOSPI rose 0.9%. Indonesia's JKSE added 1.4%. Singapore's Straits Times Index gained 1.5%. Malaysia's KLSE added 0.1%.
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