Asia Pacific share market ended marginally higher on Tuesday, 13 December 2016, as investors look ahead to a Federal Reserve policy meeting that is expected to see US borrowing costs increase.
The two-day Federal Open Market Committee meeting will kick off later in the global trading day, when U.S. central bankers will decide whether to raise interest rates. The US central bank is widely expected to raise interest rates on Wednesday for the first time this year and only the second time since the global financial crisis.
Rate rises by the Federal Reserve typically spook emerging markets, as investors tend to pull out their money and repatriate it to the U.S. in search of higher yields.
Among Asian bourses
Australia Stocks muted ahead of Fed meeting
Australian share market closed slight down, as investors elected to book recent profit on caution ahead of a two-day US Federal Reserve meeting, in which the central bank is expected to raise its reference interest rate and may also give markets a glimpse of its plans for the coming year. Investors will also be looking to for China's industrial output data for November due later in the day. Commodity firms and financials made up more than two-thirds of the losses on the index, offsetting gains from real estate and healthcare shares. At the closing bell, the benchmark S&P/ASX 200 index declined 17.80 points, or 0.32%, to 5545, while the broader All Ordinaries index dropped 18.40 points, or 0.33%, to close at 5600.70.
Mining stocks were down, pressured by falls in commodity prices. Rio Tinto lost 2.5% to A$61.25 and BHP Billiton 0.8% to A$26.12. Fortescue lost 6% to A$6.43.
Financial stocks slipped, with the "Big Four" banks leading losses on tracking their US peers and ending a five-session streak of gains. Among major banks, Westpac declined 1.2% to A$31.92, Commonwealth Bank of Australia 0.7% to A$80.38, National Australia Bank 0.3% to A$29.61, and Australia & New Zealand Banking Group 0.1% to A$29.78.
Defensive stocks including healthcare and consumers counters saw gains, with retail giants Wesfarmers and Woolworths adding 1.3% and 0.4%, respectively. Medical device marker ResMed Inc added 0.6%, while CSL climbed 2.3%.
Energy stocks also gained after oil prices hit an 18-month high after Opec and some non-members agreed to cut output. Woodside Petroleum rose 0.5% to A$31.65, Santos added 0.4% to A$4.54 and Oil Search jumped 0.8% to A$7.21.
Nikkei hits fresh one-year high
The Japan share market closed at fresh one-year high after erasing early losses, thanks to investors' strong buying appetite on bets that the Federal Reserve will raise rates this week and provide a steer on future monetary policy in the wake of Republican Donald Trump's election win last month. The 225-issue Nikkei average rose 95.49 points, or 0.50 percent, to end at 19,250.52, marking its highest closing level since Dec. 17, 2015. The Topix index of all first-section issues finished up 8.82 points, or 0.58 percent, at 1,540.25.
Higher oil prices helped lift oil distributors JX Holdings, Idemitsu and Showa Shell. Kao attracted buying as investors welcomed the daily goods maker's medium-term business plan released on Monday. NTT was also buoyant a day after announcing a plan to buy back own shares. Other major winners included drug maker Astellas, power firm Tepco Holdings and clothing store chain operator Fast Retailing.
Japanese electronics giants Sony, Panasonic and Sanyo were fined a total of 166 million euros ($176 million) by EU regulators on Monday for colluding on prices for rechargeable batteries. However, Sony and Panasonic ended up as they shrugged off the fine.
By contrast, financial issues that had led the market rally, such as mega-bank groups Mitsubishi UFJ, Mizuho and Sumitomo Mitsui, insurer Dai-ichi Life and brokerage firm Nomura, met with profit-taking after their U.S. peers fell in New York trading overnight. Brewer Asahi Group plunged following news reports that it agreed to pay nearly $8 billion for AB InBev's beer operations in five Eastern European countries. Major electronics parts maker Nidec fell after US-based research firm Muddy Waters said it was short-selling the firm.
China Market ekes out gain
Mainland China stock market closed marginally higher after recouping initial losses, thanks to better-than expected November retail sales and factory output data which encouraged bargain-hunting after the previous session's slump. Most sectors rallied, led by consumer and energy shares, while banks and infrastructure stocks lagged. The Shanghai Composite Index rose 0.07% to 3,155.04, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.33% to 1,975.88. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, jumped 0.03% to close at 1,985.04 points.
On Monday, China stocks suffered their biggest drop since June to hit a one-month low. Investors were rattled by fresh regulatory curbs on insurers' stock investments, and worries about incoming US president Donald Trump's China policy. The selloff continued early Tuesday morning, but sentiment improved after the release of stronger-than-expected factory output and retail sales figures.
China's retail sales growth picked up to 10.8 percent year-on-year in November, the highest since December 2015, the National Bureau of Statistics said on Tuesday. In the same month, industrial output rose by 6.2 percent year-on-year, up from 6.1 percent in October. Urban fixed-asset investment growth was 8.3 percent in the first 11 months, unchanged from the January-October period, while private investment growth increased by 3.1 percent in the first 11 months, up from 2.9 percent in the first 10 months.
Hong Kong Market closes marginally higher
The Hong Kong stock market finished firmer, after the Dow closed at record highs for six straight days overnight. But gains were limited on caution ahead of the Federal Reserve two-day policy board meeting which concludes on Wednesday, where interest rates will likely increase for the second time in a decade. The Hang Seng Index ended up 0.06%, or 13.68 points, to 22,446.70, while the Hang Seng China Enterprises index rose 0.21%, or 20.63 points, to 9,719.94.
Shares of energy companies continued upward rally after crude oil prices rose to 18-month high on Monday. PetroChina (00857) soared 5.3% to HK$5.76. Sinopec (00386) edged up 0.9% to HK$5.662. The company plans a 50% pipeline stake for RMB22.8bn. The buyers include China Life (02628), which inched up 0.5% to HK$21.5.
Property counters were softer ahead of the US FOMC's rate meetings. Link REIT (00823) slipped 1.8% to HK$52.65. Sino Land (00083) declined 1.2% to HK$11.92.
HSBC (00005) slipped 1% to HK$63.9. The global bank yesterday bought back GBP52.8 million worth of shares in London market. It was the largest repurchase deal since it announced the move. The bank also spent 90% of its repurchase fund.
Utilities players were mixed after reports two HK power companies reported their tariff adjustment proposals to the Legislative Council. Insiders said HK Electric (02638) plans to cut tariff by 1% while CLP (00002) may freeze its tariff. HK Electric inched up 0.2% to HK$6.75. CLP softened 0.4% to HK$73.45.
Malaysian Markets Ends Higher
Stock market in Malaysia finished higher, but gains were modest as investors were jittery and cautious in the lead-up to the two-day US Federal Open Market Committee (FOMC) meeting, beginning tomorrow, where US bankers will decide whether to raise interest rates. The market was closed on Monday for the Maulidur Rasul holiday. At the local close, the FTSE Bursa Malaysia KLCI (FBM KLCI) finished at 1,645.28, up 3.86 points, from 1,641.42 on Friday. After opening 10.03 points higher at 1,651.45, the index moved between 1,641.93 and 1,651.45 throughout the day. The market traded within a range of 9.52 points between an intra-day high of 1651.45 and a low of 1641.93 during the session.
The Malaysian ringgit closed easier against the US dollar today on lack of buying interest as investors braced for the outcome of the US Federal Reserve policy meeting on increasing interest rates. At the local close, the ringgit was traded at 4.4340/4390 against the US dollar from 4.4215/4255 on Friday.
Indian Market ends with decent gains
Key benchmark indices registered modest gains. The barometer index, the S&P BSE Sensex, rose 182.58 points or 0.69% to settle at 26,697.82. The Nifty 50 index rose 51 points or 0.62% to settle at 8,221.80. Both the Sensex and the Nifty almost hovered in positive terrain throughout the trading session after initial volatility. The two key indices extended intraday gains towards the later part of the trading session.
Axis Bank rose 1.74% after the bank announced that it proposes to raise funds by issuing non-convertible debentures aggregating to Rs 3500 crore. The board of directors of the bank will consider the proposal to issue and allot the above securities through circular resolution. The announcement was made after market hours yesterday, 12 December 2016.
Yes Bank rose 1.17%. The bank during market hours today, 13 December 2016 said it has partnered with Grofers, the on-demand e-commerce mobile and web application. With this partnership, Grofers customers will be able to get currency notes delivered to their doorstep along with their grocery order for up to Rs 2,000 through Yes Bank's PoS machines.
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