Headline shares on the Asia Pacific market closed higher on Wednesday, June 26, 2013, with the MSCI's broadest index of Asia-Pacific shares outside Japan were 1.1% higher, on tracking strong led from Wall Street overnight and string of positive US data. Meanwhile risk appetite strengthened further after the consumer sentiment in Europe's largest economy Germany hit a six-year high.
Investors chased for bargain buying across the Asian region after the US consumer confidence, durable goods orders and housing market data released on Tuesday came above the analyst forecasts reinforcing strength in the US economy. Yesterday's data able to enliven markets to some degree, so those whose outlook is glass half full will be hoping that a surprise boost to GDP can put Wall Street in the mood for further gains.
The US Commerce Department said on Tuesday that Sales of new homes rose 2.1% to 476,000 in May, the highest level in nearly five years. The Standard & Poor's Case-Shiller index showed that existing-home prices in 20 U.S. metropolitan areas were 12.1% higher in April than a year earlier. Home prices posted their largest monthly gains since the Case-Shiller data began, rising 2.5% in April from March in the 20-city index.
U.S. consumer confidence jumped in June to five-year high thanks to a better view on job prospects, according to a report released Tuesday. The Conference Board, a private research group, said its index of consumer confidence rose to 81.4 this month from a revise d 74.3 in May, originally reported as 76.2. The board said the June index is the highest since January 2008.
Investors risk sentiments gained further support as a gauge of German consumer confidence predicted sentiment will improve in July. GfK market research group said on Wednesday its forward-looking consumer sentiment indicator, based on a survey of around 2,000 Germans, climbed to 6.8 going into July - its highest level since September 2007 - from 6.5 in June.
Adding to risk appetite, equities received additional support on calming jitters over China's credit crunch after the People's Bank of China (PBoC) said liquidity risks in its financial markets are controllable and the unprecedented spike in interbank lending rates would gradually fade.
In the Asia Pacific region, Australian stock market has closed sharply higher, registering the first win in five sessions in a broad-based rally that added about A$23 billion to the market's capitalization. The benchmark S&P/ASX200 jumped 75.7 points to 4731.7. The broader All Ordinaries rose 74.3 points to 4707.8. Investors moved in the market, chased for bargain buying after a strong rally on US markets overnight and an easing of China's credit crunch.
Australian materials stocks rebounded today, with BHP Billiton up by 2.6% to A$31.62 and Rio Tinto 3.3% to A$51.90. Iron ore miner Fortescue rose 2.4% to A$3.03. but gold miners continued downturn, as the spot price continued its march south, falling a further 2.1% to $1250.51 an ounce to trade at its lowest point since September 2010. Gold has plunged 25.4% this year. Perseus Mining was down 7.8% to A$0.475 and Kingsgate shed 3.6% to A$1.34.
Paladin Energy (PDN) shares dropped 6.8% to A$0.82 after announcing it has delayed a deal to sell a stake in its African uranium mine until August 213.
Billabong (BBG) shares fell 5.3% to A$0.18 after a strong gain yesterday. BBG shares were up 46% on Tuesday's trade after announcing refinancing and asset sale talks with suitors Altamont Capital Partners and Paul Naude led Sycamore Partners are well advanced. BBG is looking to sell some of its assets or secure capital injections in a bid to refinance A$286M in debt.
In New Zealand, Auckland share market rallied back from a three-month low, as equity markets recovered from Tuesday's selloff after better US economic figures. The NZX 50 Index rose 76.613 points, or 1.8%, to 4393.606. Within the index, 39 stocks rose, seven fell and four were unchanged.
Vital Healthcare raised 9.3% to NZ$1.35. The medical and healthcare property investor to announced details of a one-for-10 renounceable rights offer at $1.275 a share to raise $39.2 million. It flagged the equity rising yesterday without giving details and some investors had speculated it could be twice as large.
In Japan, Japan's share market closed lower after wiping out initial gain, with the Nikkei Stock Average fell 1% to 12834.01, while the Topix index fell 0.9% to 1069.28, extending losing streak for third day in row.
The Japanese share market benchmark Nikkei average briefly topped 13,000 in morning on the back of better than expected US economic data which boosted Wall Street overnight and as the dollar's raise versus the yen. However, sellers began to dominate after the Shanghai market opened lower despite comments by China's central bank. Chinas central bank said it would guide rates to reasonable levels and expected seasonal factors that cause a recent spike in interbank market rates would gradually fade. Investor sentiment worsened further as the Shanghai Composite Index extended losses during the day. Tumbling China shares heightened a sense of risk over Chinese banking liquidity and investors began selling China-related shares, while bargain-hunters began losing appetite to buy back exporters.
Japanese exporters shares closed mixed. Auto stocks such as Toyota Motor up 0.5% at 5,700 yen and Hino Motors up 5.1% at 1,365 yen, while techs heavyweights Tokyo Electron lost 4.3% to 4,700 yen and Canon shed 2% to 3,185 yen.
In China, China's shares declined in subdued trade, with the benchmark Shanghai Composite index down by 0.4% to finish at 1951.50, taking its losses so far this month to 15%. The market registered decline for straight sixth session amid lingering worries about the economic impact from high borrowing costs in the interbank money markets.
The 21st Century Business Herald reported on Wednesday that China's top four state-owned banks issued 290 billion yuan ($47.2 billion) of new loans in the first three weeks of June, higher than the 208 billion yuan they extended in the full month of May. The Big Four banks issued a total 220 billion yuan of new loans in the first week of June, prompting regulators to warn them to curb the rapid lending growth, according to the report. The report also cited a transcript from a regulatory meeting as saying that all Chinese commercial banks extended nearly 1 trillion yuan in loans in the first 10 days of June, the fastest growth on record. New yuan loans issued by the big four banks -Industrial & Commercial Bank of China , Bank of China , China Construction Bank Corp and Agricultural Bank of China- typically account for about 30% of all loans in the banking system. The People's Bank of China is expected to release June lending data around July 10.
In Hong Kong, HK stocks staged a sharp rebound as calming statements from policymakers in China and overnight rally on the United States underpinned bottom hunting. The Hang Seng Index ended up 482 points to 20,338.
Among the 50 HK blue chips, 49 stocks rose and 1 fell. ICBC soared 6.8% to HK$4.7, while Cathay Pacific inched down 0.5% to HK$13.06, making themselves the biggest blue-chip winner and loser. China Mobile added 2% to HK$77.26, while HSBC gained 1% to HK$80.5. Chinese banks were higher, with CCB rose 6.5% to HK$5.41. Minsheng Bank jumped 6.3% to HK$7.9. CM Bank and ABC shot up 4.5% and 4.3% to HK$12.98 and HK$3.14. Macau gaming players rebounded with Sands China and Wynn Macau rose 3.7% and 5% to HK$36.5 and HK$20.95.
In Singapore, share market advanced for the second day in a row, with Straits Times Index was up 0.5%, led by property and shopping mall stocks after a few brokers issued positive reports on the companies.
Shares of shopping mall operator CapitaMall Trust and CapitaMalls Asia rose as much as 3.1% and 2.6%, respectively. CapitaLand and Hongkong Land rose about 2% each.
Maybank Kim Eng said shopper traffic at CapitaMall Trust's malls in Singapore's western area of Jurong remains healthy despite the recent opening of a potential competitor, Lend Lease's Jem mall. The broker maintained its buy rating and $2.45 target price on the stock.
Citigroup said it continues to prefer developers to real estate investment trusts. It favors developers with a more diversified sector or geographical exposure, picking CapitaLand, CapitaMalls Asia and Hongkong Land Holdings.
In India, shares in the Indian market closed lower after reversing intraday gains in late trade with the market sentiment hit adversely after the rupee hit record low below 60 against the dollar. The S&P BSE Sensex was provisionally down 109.33 points or 0.59%, off 170.68 points from the day's high and up 5.47 points from the day's low. Also hitting market sentiment was data showing that foreign institutional investors (FIIs) remained net sellers of Indian stocks on Tuesday, 25 June 2013.
Indian index heavyweight and cigarette major ITC pared gains in late trade. Reliance Industries (RIL) reversed intraday gains and slipped into the red in late trade. Bharti Airtel dropped on reports the Department of Telecom (DoT) has decided to slap Rs 650-crore penalty on the company for violating roaming norms in 13 circles between 2003-2005. Auto stocks were mostly lower. IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms.
The Indian rupee breached the 60-mark against dollar and touched all-time low in the mid-session trading on higher demand from banks and importers and heavy outflows by foreign institutional investors. The rupee was hovering at 60.53 against the dollar, weaker than Tuesday's close of 59.66/67. A weak rupee makes the cost of oil and other imported goods higher in rupee terms, adding to inflationary pressure.
Elsewhere in the region, South Korea's KOSPI jumped 0.2%, Taiwan's TAIEX added 1.6%, Indonesia's JKSE rose 3.8% and Malaysia's KLSE added 0.7%
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