Asia Pacific share market advanced on Tuesday, 17 May 2016, on tracking positive lead from Wall Street overnight and rally in the crude oil prices. However, gains on the regional bourses were limited as many investors were taking a wait-and-see approach to see the gross domestic product announcement and the Federal Reserve minutes released tomorrow. Investors are keen to see details of the US central bank's last meeting for clues about whether a June interest rate hike is on the cards.
Wall Street rallied sharply on Monday, juiced by a jump in Apple shares and gains from energy stocks that were backed by stronger oil prices. The S&P 500 rose 20.05 points, or 1%, to 2,066.66. The Dow Jones industrial average rose 175.39 points, or 1%, to 17,710.71. The Nasdaq composite index gained 57.78 points, or 1.2%, to 4,775.46
Oil prices hit six-month highs on Monday on global supply outages and long-time bear Goldman Sachs taking a more positive view on the market, although a stockpile build at the U.S. storage hub for crude futures limited gains. Brent crude futures ttraded flat at $48.96 per barrel in early Asia, after having risen 2.4% on Monday, when it rallied to $49.47 earlier, its highest since early November, in a test towards $50. U.S. crude's West Texas Intermediate (WTI) futures changed hands at $47.77, maintaining their 3.3% gains on Monday.
U.S. interest rate policy likely be key focus this week. In addition to planned remarks from several Federal Reserve officials, the Fed is scheduled on Wednesday to release minutes of its last meeting. Investors will be looking for clues as to whether the central bank is likely to raise rates from low levels that have helped push up stocks and other assets since the financial crisis. A report on Friday showed retail sales rose a solid 3% last month compared with the previous year, suggesting the Fed may be more likely to raise rates.
Among Asian bourses
Australia Market rises on resources rally
Australian share market closed higher, as risk appetite improved with positive finish of Wall Street overnight and the rise in crude oil prices. Almost all ASX sectors advanced, with shares of Energy, Resources and Metals & Mining companies being major gainers. At close of trade, the benchmark S&P/ASX 200 index advanced 37 points, or 0.69%, to 5395.90. The broader All Ordinaries grew 38.20 points, or 0.7%, to 5458.50. Rising stocks outnumbered declining ones on the Australia Stock Exchange by 609 to 446 and 340 ended unchanged.
Shares of materials and resources companies advanced the most in the Sydney market, on tracking gain in crude oil and base metal prices. BHP Billiton rose 3.5% to A$19.21, Rio Tinto 1.5% to A$45.87, and Fortescue Metals 7.9% to A$3.14. Woodside Petroleum added 2.9% to A$27.55, Origin Energy 3.9% to A$5.63, and Santos 6.3% to A$4.39.
The Australian currency (AUD) traded higher against the US dollar and basket of other major currencies, after minutes from the 3 May 2016 Reserve Bank of Australia board meeting revealed some reluctance by members to cut the cash rate. Around late afternoon, the Australian dollar was last traded at 0.7324 against US dollar, while hovered around 0.6469 against the euro.
Nikkei rises 1.13%
The Japan share market ended higher, thanks to overnight Wall Street gains and a weaker yen. However, market gains were limited as many investors were taking a wait-and-see approach before Japan releases first-quarter economic growth data on Wednesday. The 225-issue Nikkei Stock Average ended up 186.40 points, or 1.13%, to 16652.80. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 14.20 points, or 1.07%, higher at 1335.85.
Exporters were mostly higher as the yen stabilized, with top automakers leading rally. Toyota Motor was up 1.2% to close at 5,533 yen while Nissan tacked on 1.54% to 1,050 yen. Uniqlo operator Fast Retailing, a market heavyweight, advanced 1.81% to 28,660 yen, while mobile giant SoftBank gained 1.83% to 5,928 yen. Kikkoman Corp., a soy-sauce maker that gets about 40% of revenue from North America, added 1.6%.
Energy explorers were up on tracking gain in crude oil prices. Oil rallied as Goldman Sachs Group Inc. said the global glut is easing amid supply disruptions and higher demand. Inpex surged 3.16% to 838.3 yen and JX Holdings was 0.56% higher at 427.4 yen. JGC Corp., which provides services to oil firms, also climbed 3.2%.
Mobile carriers plunged after reports the government may step up pressure for them to offer cheaper plans. Surging profits show they have room to reduce costs for customers, an official at the communications ministry told. KDDI Corp. sank 3.5%, reversing a gain of 1.3%, while NTT Docomo Inc. dropped 2.8%.
Japanese yen was little changed against the greenback and most of its major counterparts as traders refrained from taking bold moves ahead of the release of Japan's growth data and the Group of Seven finance chiefs' meeting later this week. Among major currencies, the US dollar traded at Y109.51 and the euro stood at 123.93.
China Stocks fall on stimulus worries
Mainland China stock market finished down amid worries that Beijing might taper monetary stimulus after Chinese President Xi Jinping pledged to push ahead with the structural reforms and reduce the country's debt levels. But losses were limited amid further signs capital outflows are easing. Most sectors fell, with transportation shares leading the decline. The benchmark Shanghai Composite Index declined 7.18 points, or 0.25%, to 2843.68. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, fell 9.29 points, or 0.3%, to 3086.02.
State television quoted President Xi Jinping as saying on Monday that China would push forward supply-side reforms and increase the number of middle-income earners. Xi's remarks, which came after shoddy economic data for April, reinforced expectations that Beijing is reluctant to use further monetary stimulus to stoke growth even as China's nascent economic recovery peters out.
China's commercial banks sold a net $23.7 billion of foreign exchange in April, compared with a net sale of $36.4 billion in March, data from the State Administration of Foreign Exchange (SAFE) showed on Monday, indicating that enterprises were less willing to hold dollars as they did in March.
Airline shares traded mixed amid concerns higher fuel costs would weigh on profits. China Southern Airlines fell 3.9% while Air China tumbled 2.5% to 7.48 yuan.
Brokerages advanced on hopes that the central government will soon launch the much-anticipated Shenzhen-Hong Kong stock connect programme to boost cross-border trading, with Shenzhen Securities jumping 3.6% to 12.85 yuan, Everbright Securities was up 1.3% to 16.5 yuan, and Huatai Securities ended higher by 0.9% to 15.93 yuan.
Hong Kong Market rises 1.18%
The Hong Kong stock market finished sharply higher, as risk appetite buying buoyed by tracking positive lead from Wall Street overnight and rally in the other Asian bourses. Meanwhile, buying momentum spirited on hopes of the upcoming launch of the "Shenzhen-HK Connect after Chairman of the National People's Congress Zhang Dejiang visited HK. Most of the sectoral indices advanced, with energy-related shares leading sectoral rally on gains in crude oil prices. The benchmark Hang Seng Index surged 234.85 points, or 1.18%, to 20118.80 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 113.17 points, or 1.36%, to 8425.78. Turnover rose to HK$59.4 billion from HK$56.4 billion on Monday.
Shares of companies affiliated with Apple rallied in Hong Kong after Warren Buffett's Berkshire Hathaway revealed it was holding US$1.1 billion worth of shares in the US tech giant. Cowell e Holdings soared 9.2% to end at HK$2.72. Sunny Optical Technology Company surged 4.4% to HK$25. AAC Technologies Holdings improved by 1.1% to HK$60.60.
Major oil producers were higher, tracking gains in crude oil prices. Oil prices hit fresh 6-month highs on worries of global supply disruption. Long-time oil bear Goldman Sachs also turned positive. Kunlun Energy (00135) surged 4% to HK$6.15. CNOOC (00883) shot up 3% to HK$9.23. Both PetroChina (00857) and Sinopec (00386) rose 2% to HK$5.42 and HK$5.21.
Chinese insurers were also higher after reporting strong 4-month premium income. China Life (02628) added 2% to HK$16.8. Ping An (02318) gained 1% to HK$34. CPIC (02601) also rose 1% to HK$25.8.
Sensex gains for second day in row
Indian stock market clocked modest gains amid a divergent trend among various index constituents. The barometer index, the S&P BSE Sensex, rose 120.38 points or 0.47% to settle at 25,773.61. The Nifty rose 30 points or 0.38% to settle at 7,890.75. The market witnessed intraday volatility during the second half of the trading session. After extending gains in mid-afternoon trade, the Sensex and the Nifty pared gains later. The volatility on the domestic bourses during the second half of the trading session materialized as European stocks pared gains. On the political front, various exit polls predicted a maiden win for the BJP led National Democratic Alliance (NDA) in assembly election in Assam.
Shares of oil exploration and production (E&P) companies rose as Brent crude oil futures hit a near seven month high yesterday, 16 May 2016. Shares of public sector oil marketing companies rose after announcing increase in the price of petrol and diesel. Car major Maruti Suzuki India edged higher as the Japanese yen weakened against the dollar.
Tata Metaliks surged by the maximum permissible 20% level for the day after Tata Steel said it has decided withdraw the proposal for the merger of Tata Metaliks with the company.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 was up 0.88% to 6974.87. South Korea's KOSPI index added 0.01% to 1968.06. Taiwan's Taiex index rose 0.9% to 8140.48. Malaysia's KLCI added 0.75% to 1633.39. Indonesia's Jakarta Composite index sank 0.05% to 4729.16. Singapore's Straits Times index added 1.65% to 2781.11.
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