Headline shares of the Asia Pacific market mostly declined on Tuesday, 14 October 2014, amid continued concerns over the health of global economies in the wake of last week's weak German economic data and the International Monetary Fund's cut to its global growth forecast. The MSCI Asia Pacific Index fell 0.7% to 135.43.
The International Monetary Fund on 7 October 2014, cut its outlook for global growth in 2015 and warned about the risks of rising geopolitical tensions and a financial-market correction as stocks reach frothy levels. The world economy will grow 3.8% next year, compared with a July forecast for 4%, after a 3.3% expansion this year, the Washington-based IMF said. Some financial markets may be overheating after a sustained period of near-zero rates, according to the report.
Among Asian bourses
Nikkei falls 2.38% on stronger yen
Japanese share market finished lower for fifth straight session, as risk aversion selloff across the board, following falls in both Wall Street shares and the dollar on Friday and Monday. Most of the blue chips declined with shares of exporters and currency sensitive stocks being major losers amid renewed fears about global economic growth coupled with a stronger Japanese yen. The Nikkei 225 index stumbled 2.38%, or 364.04 points, to 14936.51, and the Topix index of all first-section shares lost 2.32%, or 28.82 points, to end at 1214.27. Japanese markets were closed Monday for national holiday.
Shares of exporters and other currency-sensitive companies extended losses after yen appreciated to lower-107 level against the greenback amid renewed fears about global economic growth. As of the close of Tokyo trading, the dollar was trading at Y107.17 after dipping to the Y106 level Monday. A weaker dollar is generally bad for exporter shares, as they have less room to cut prices on goods they sell overseas and can't buy as much yen with the profits they send back home.
Industrial robot maker Fanuc Corp slipped 0.9% to 18005 yen, while chip testing equipment maker Advantest Corp fell 3.7% to 1235 yen. Air-conditioner maker Daikin Industries fell 4% to 6049 yen. Canon Inc, the world's biggest camera maker, lost 2.2% to 3304.50 yen. Sony Corp., which gets 72% of its sales abroad, dropped 3.2% to 1822 yen. Panasonic Corp., which gets about half its sales outside of Japan, dropped 3.1% to 1175 yen. Toyota Motor Corp, the world's biggest automaker, slid 2.9% to 5978 yen. Honda Motor Co, a carmaker that gets 84% of sales abroad, dropped 2% to 3404 yen. Nissan Motor Co., which gets more than 70% of its revenue abroad, declined 2% to 962.70 yen.
Shares of shippers also fell sharply, as investors considered the deeper implications of a global economic slowdown. Nippon Yusen fell 3.7% to 262 yen, and Kawasaki Kisen lost 2.3% to 217 yen.
Air carriers' shares declined on increasing alarm over the spread of the Ebola virus, following news that passengers will have their temperatures tested for suspected virus infection at Heathrow Airport from Tuesday. UK health secretary Jeremy Hunt reportedly said in a press interview that checking all the 1,000 people a month arriving from the worst Ebola-affected countries would be a daunting task. Japan Airlines dropped 5.5% to 2652 yen and ANA Holdings fell 5.3% to 230 yen.
Aussie shares surge on strong China trade data
Australian share market rebounded sharply from eight-month low, on the back strong gains across the sectors, led by metal and mining stocks, thanks to better-than-expected Chinese September trade figures and jump in the spot price of the steel-making commodity. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each rallied by 1% to 5207.4 points and 5204 points, respectively. Turnover was relatively healthy with 1.77 billion shares worth of A$4.76 billion traded today.
Market participants largely disregarded a speech by Reserve Bank of Australia assistant governor Guy Debelle in which he issued a dramatic warning about dangerous levels of complacency towards the risks of a violent market crash. Investors also shrugged off a closely-watched monthly National Australia Bank survey showing business confidence at its lowest level in over a year.
Shares of material sector extended gain for second consecutive day as the spot price for iron ore, rebounded after China September trade data beats consensus. The General Administration of Customs announced on Monday that exports from the world's second-biggest economy rose 15.3% year-on-year to $213.7 billion, while imports climbed 7% to $US182.7 billion, resulting a trade surplus of $31 billion in September.
Iron ore miner Fortescue Metals Group climbed up 5.5% to A$3.65. Resources giant BHP Billiton added 2.6% to A$33.45, and main rival Rio Tinto jumped 4.1% to A$60.74. Mount Gibson Iron surged 18% to A$0.525 and Atlas Iron lifted 14.9% to A$0.425. Oz Minerals surged 7.6% to A$3.95 as the company said it is on track to meet its production guidance after lifting quarterly copper and gold output.
Telstra picked up five cents at A$5.29 after the telco's chief executive David Thodey reaffirmed the telco's financial guidance for the year ahead at its annual general meeting.
Shanghai Composite falls 0.28%
Mainland China market declined for third consecutive session, amid continued profit booking after the market's considerable gains in the previous week and on gloomy views about the global economy. Almost all sectors dived in red, with shares of energy, materials and financial companies being major losers. The benchmark Shanghai Composite index declined 6.53 points, or 0.28%, to finish at 2359.47.
China's September auto sales rose 2.5% from a year earlier, its slowest pace in 19 months, dragged down by sluggish sales of commercial vehicles such as trucks, an industry association said on Monday. Vehicles sales totaled 1.98 million units last month, the China Association of Automobile Manufacturers (CAAM) told a press conference in Beijing. Passenger vehicle sales rose 6.4% while commercial vehicle sales slumped 16%. During the first nine months of 2014, China's vehicle sales rose 7% from a year earlier. The CAAM has forecast that the market will expand 8.3% this year, slowing from last year's 13.9% pace.
Hang Seng falls 0.41%
Hong Kong equity market closed down after washing out intraday gain late afternoon, following weak lead from offshore market overnight and drop in the mainland A-shares. The benchmark Hang Seng Index dropped 95.41 points, or 0.41%, to close at 23047.97, after rising to intraday peak of 23409.96.
HK shares started the session on a sour note, after taking a weak lead from offshore. In the United States on Monday night the S&P 500 capped it's worst three-day run since 2011. But, the city's bourse reversed its trend by midday as investors reassured by strong Chinese trade data for September. However, the major shares headed south again in afternoon amid worries that slowing growth in Europe and Asia could hobble the global recovery.
Tingyi (00322) plunged 4.7% to HK$18.96, making itself the worst loser. The company was dragged by its parent's involvement on gutter oil scandal.
Oil stocks were lower as crude prices hit four-year low. CNOOC (00883) and PetroChina (00857) fell 3% and 0.7% to HK$12.52 and HK$9.5.
COLI (00688) edged up 0.3% to HK$21.1 after the company's September sales soared 47%. CR Land (01109) put on 2.4% to HK$17.82.
HKEx (00388) nudged down 0.7% to HK$170.9. The bourse operator disclosed that brokers will start a trial run of new central settlement system next week. Tianhe Chem (01619) plunged 11.5% to HK$1.38 even though its CEO yesterday increased his stake by 24 million shares.
Agile (03383) rebounded 5% to HK$4.15 after its major shareholder promised a US$200 million injection.
Sensex ends marginally in the red
Indian stock market ended the session marginally in the red amid weak global cues. The Sensex closed 0.13%, or 34.74 points, lower at 26,349.33, while the National Stock Exchange's broader barometer 50-share CNX Nifty fell 0.26%, or 20.25 points, to end at 7,864.
Index heavyweight Reliance Industries (RIL) edged higher in volatile trade after reporting record quarterly profit. Sesa Sterlite edged lower in volatile trade on reports that the Supreme Court has reiterated a prior ruling that all iron ore mined in Goa before 2007 belonged to the state. Realty major DLF tumbled to record low after Securities and Exchange Board of India barred the company and its chairman K.P. Singh along with five other company executives from accessing India's capital markets for three years. Bajaj Finserv reversed gains after declaring Q2 earnings. Some FMCG stocks advanced in a weak market.
The annual rate of inflation based on the Wholesale Price Index (WPI) eased to 2.38% in September 2014, from 3.74% in August 2014, data released by the government today, 14 October 2014, showed. Core WPI inflation which excludes volatile food and fuel prices eased to 2.8% in September 2014, from 3.5% in August 2014. Meanwhile, July WPI inflation rate was revised upwards to 5.41% from 5.19% reported earlier.
The WPI data comes after another data released by the government after trading hours yesterday, 13 October 2014, showed easing of consumer price inflation last month. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 6.46% in September 2014, from 7.73% in August 2014. The rate of inflation based on the combined consumer food price indices (CFPI) for urban and rural India eased to 7.67% in September 2014, from 9.35% in August 2014, the data showed. Core CPI inflation which excludes food and energy prices, eased to 5.9% in September 2014, from 6.82% in August 2014.
Elsewhere in the Asia Pacific region-- Indonesia's Jakarta Composite index grew 0.19% to 4922.58. Malaysia's KLCI fell marginally 0.05% to 1796.38. New Zealand's NZX50 shed 0.47% to 5145.89. South Korea KOSPI jumped 0.1% to 1929.25. Taiwan's Taiex index added 0.65% to 8768.39. Singapore's Straits Times index declined 0.24% at 3194.40, after data showed Singapore's gross domestic product in the third quarter rose a weaker-than-expected 1.2% from the previous quarter.
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