Asia Pacific share market declined on Wednesday, 08 October 2014, amid worries about pace of global economic growth after the International Monetary Fund revised down its global growth forecasts. The MSCI Asia Pacific Index lost 1.1% to 138.24.
The International Monetary Fund cut its global economic growth forecasts for the third time this year on Tuesday, citing persistent weakness in the eurozone and a broad slowdown in several major emerging markets. In its flagship World Economic Outlook report, the Washington-based lender cut its global growth expectations to 3.3% for this year and 3.8% for next year. In July it had expected growth of 3.4% in 2014 and 4% in 2015.
The IMF marked down prospects in the eurozone's three largest economies, Germany, France and Italy, which the fund says is headed into its third consecutive year of recession. The fund warned that the probability of the eurozone re-entering a recession in the next six months has roughly doubled since the IMF's April outlook to 38%. It also sees disappointing output in Japan and a lower growth trajectory for several major developing economies, including Brazil and Russia.
The IMF said potential growth in emerging markets is now 1.5 percentage points lower than what it foresaw in 2011. China's economic growth is expected to slow to around 6.5% sometime in 2016 from 7.4% this year.
The International Monetary Fund has raised the India's growth forecast to 5.6% for 2014 from its earlier estimate of 5.4% on the back of effective policies and a renewal of confidence following the elections. It has forecast 6.4% growth for India for FY 2016.
Among Asian bourses
Aussie market falls to 8-month low on growth woes
Australian share market declined to a fresh eight-month low, as downward revision of the International Monetary Fund (IMF) global growth outlook led to broad selling, with financials and materials stocks being major losers. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both slid by 0.8% to 5241.30 and 5241.60, respectively. Turnover was relatively healthy with 1.79 billion shares worth of A$4.11 billion traded today.
Shares of banks and financial companies continued to falter, with top four lenders leading losses. Commonwealth Bank of Australia fell 1% to A$75.02, National Australia Bank 0.7% to A$32.15, ANZ Banking Group 0.7% to A$31.30 and Westpac Banking Corp 0.4% to A$32.28.
Shares of material and energy companies retreated, amid softer base metal and crude oil prices. Resources giant BHP Billiton fell 1.2% to A$32.84. Main rival Rio Tinto erased 1.6% to A$59.09. Iron ore miner Fortescue Metals Group shed 1.2% to A$3.40. Australia's biggest gold producer, Newcrest Mining, fell 3.9% to A$9.61. Woodside Petroleum lost 1.7% to A$39.88, Oil Search 2.1% to A$8.57 and Santos 1.6% to A$13.
Nikkei drops on global growth concerns, stronger yen
Japanese share market finished the session sharply lower, as risk aversion selloff across the board, hit by a yen appreciation against major currencies and the International Monetary Fund's decision to cut its economic growth forecast for the country and the global economy. The Nikkei 225 index lost 1.2%, or 187.85 points, to finish at 15595.98, while the broader Topix index of all first-section shares fell 1.24%, or 16.04 points, to 1274.85.
Shares of Exporters and other currency-sensitive companies declined the most in Tokyo market after yen appreciated against the greenback. A stronger yen is generally bad for Japanese exporters, as it gives them less room to cut prices on goods they sell overseas and reduces the yen value of any profits they send back home.
Toyota Motor Corp, the world's biggest automaker, slid 1.8% to 6252 yen. Honda Motor Co, a carmaker that gets 84% of sales abroad, dropped 1.4% to 3541 yen. Industrial robot maker Fanuc Corp slipped 2.1% to 18830 yen, while chip testing equipment maker Advantest Corp fell 2% to 1341 yen. Air-conditioner maker Daikin Industries fell 1% to 6408 yen. Canon Inc, the world's biggest camera maker, lost 0.7% to 3479 yen.
Shanghai Composite rises 0.8% in post-holiday trade
Mainland China market closed at highest level in 19 months today, the first trading session after a week-long holiday closure, with shares of property developers being major gainers. The benchmark Shanghai Composite index advanced 18.92 points, or 0.8%, to finish at 2382.79, the highest close since 20 February 2013, when it finished at 2397.18. Mainland markets were shut from Oct. 1 to Oct. 7 for the National Day holidays.
Over the Golden Week holidays there was an important change in housing policy, with a major relaxation of mortgage policies. Last week, China announced fresh steps to boost the sagging property sector, including granting second-home buyers that have paid off their first mortgage access to lower mortgage rates and lower down-payment requirements.
Shares of property developers advanced the most in Shanghai after policy makers eased real-estate curbs for the first time since the global financial crisis. The People's Bank of China said in a statement on Sept. 30 that it was allowing a broader range of home buyers' access to lower down payments and mortgage rates. The central bank also eased a ban on mortgages for people buying a third home. China Vanke Co rose 2.8% to 9.44 yuan and Poly Real Estate Group Co 2.9% to 5.71 yuan. China Merchants Property Development Co added 2% to 12.54 yuan.
Military equipment makers and pharmaceutical firms were also ended higher. The former was boosted by hopes of supportive measures from the government amid growing uncertainty over the political situation in North Korea, while the latter played catch-up amid growing concerns over the potential outbreak of epidemics such as dengue fever in China's Guangdong province and the spread of Ebola overseas. Yunnan Baiyao Group rose by its 10% daily upper limit to 56.40 yuan while China Avic Electronics surged 9.2% to 29.23 yuan.
Hang Seng falls 0.68% on IMF outlook cuts
Hong Kong equity market finished the session lower, as a downgrade to the global economic growth outlook led to broad selling, with casino shares and energy producers stocks being major decliners. The benchmark Hang Seng Index declined 0.68% to close at 23263.33.
Macau gaming players turned lower after several research houses estimated the gross gaming revenues in October to fall 13%-19%. Wells Fargo said Macau gaming revenue growth may drop 20% to 23% in October, more than its previous estimate for a 19% decline. Sands China (01928) and Galaxy Ent (00027) dipped 3% to HK$42.15 and HK$47.15. MGM China (02282) dropped 3.2% to HK$22.5. Melco Crown (06883) dipped 3% to HK$65. SJM (00880) and Wynn Macau (01128) declined 2% to HK$15.28 and HK$25.45.
Energy producers stocks also fell in tracking fall in crude oil prices. Cnooc dropped 1.3% to HK$13.34, while PetroChina Co. retreated 2% to HK$9.88.
HKT-SS (06823) plunged 5% to HK$9.35 after its chairman disposed of his stake via his personally owned insurance arm.
Sensex falls for third day in a row
Indian stock market fell for a third straight session on Wednesday to its lowest closing level in nearly two months as exporters slumped after weak macroeconomic data stoked worries about global economic growth. The S&P BSE Sensex dropped 25.18 points or 0.1% to settle at 26,246.79, its lowest closing level since 14 August 2014. The CNX Nifty fell 9.70 points or 0.12% to settle at 7,842.70.
Software stocks declined after a foreign brokerage reportedly downgraded its rating on Infosys, Tech Mahindra and MindTree. IT services major, Infosys plunged 4.70% amidst reports that global financial services major Citigroup has downgraded the stock to 'neutral' from 'buy'. Tech Mahindra fell 4.7% after Citigroup cut its rating to "sell" from "neutral", while MindTree lost 4% after a downgrade to "sell" from "buy".
Elsewhere in the Asia Pacific region-- Taiwan's Taiex index slid 0.95% to 8955.18. South Korea's KOSPI index eased 0.39% to 1965.25. Indonesia's Jakarta Composite index sank 1.5% to 4958.52. Singapore's Straits Times index fell 0.53% at 3226.71. Malaysia's KLCI rose 0.17% to 1840.82. New Zealand's NZX50 gained 0.2% to 5245.90.
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