Asia Pacific share market closed mixed on first trading day of the week, 10 August 2015, as a solid US jobs report for July raised prospects for an increase in interest rates by the Federal Reserve as soon as September.
The US Department of Labor said on Friday, 7 August 2015, employers added 215,000 jobs in July, slightly above market expectations. The unemployment rate held at a seven-year low of 5.3% and there were signs that wages were beginning to pick up.
Among Asian bourses
Australia stocks bounce from one-month low
The Australian share market rebounded 0.6% from one-month low today, as investors chased for bargain buying across the board. Most ASX sectors were higher at the close, with shares of banks and financials leading the Monday's gains after sparking last week's sell-off. Consumer discretionary stocks improved following a strong result from JB Hi-Fi (JBH), while the healthcare sector was weighed down by a sharp decline in Ansell (ANN). The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both advanced by 0.6% to 509.20 points and 5504.90 points, respectively. Market interest was around average levels with 1.6 billion transactions valued a little over $5 billion. 458 shares ended higher, compared to 486 names which ended lower and 356 which were unchanged.
Shares of banks and financials posted a strong recovery on bargain buying, led by the National Australia Bank, up 1.5% to A$33.32, after reporting a 9% increase in third-quarter profit, citing solid revenue growth and a drop in bad debts. The NAB unaudited cash profit came in at A$1.75 billion for the three months to the end of June. Among other lenders, Australia and New Zealand Banking Group rose 1.5% to A$30.60, Commonwealth Bank 1% to A$82.14, and Westpac Bank 1% to A$32.68. Bendigo Bank fell 4.1% to A$12.44, as the lender lifted its full-year cash profit but saw its margins come under pressure from increased competition and low interest rates.
Shares of consumer discretionary sector also improved following a strong result from JB Hi-Fi (JBH). Its shares soared by 10.6% to close at A$21.69 after the electronics retailer lifted its full-year profit and forecast even further sales growth in the year ahead. The retailer reported 6.4% jump in net profit to A$136.5 million on the back of 2.9% rise in sales to A$3.65 billion. JBH has increased its dividend and confirmed it will continue to expand into the home appliances market. JB Hi-Fi aiming for total sales in the 2016 financial year to be approximately A$3.85 billion, with six new stores opening and 16 existing stores converting to JB Hi-Fi HOME, the retailer's home and kitchen appliances arm.
Healthcare stocks were the biggest losers after the rubber and latex products maker Ansell warned of weaker earnings ahead. Ansell reported a strong 20% rise in net profit for 2015 and the full-year dividend is up 10%. But the company warned the stronger US dollar was set to hit earnings this financial year. Ansell shares closed down 15.8% at A$20.84.
Nikkei extends gain on sign of next round of stimulus
Japanese share market ended higher for fourth straight session, thanks to statement from the Bank of Japan Governor Haruhiko Kuroda that government would implement another round of stimulus if inflation remains low. Risk sentiments received further boost from official data indicating the nation's current account surplus in June was 558.6 billion yen compared with a 363.9 billion yen deficit last year. Total of 25 out of 33 TSE sectors advanced, with Textiles & Apparels, Pulp & Paper, Information & Communication, Land Transportation, Air Transportation, and Pharmaceutical stocks being top gainers. The Nikkei Stock Average advanced 84.13 points, or 0.41%, to end at 207808.69 points. The broader Topix index ended 12.10 points, or 0.72%, higher at 1691.29 points.
Japanese corporate earnings are booming. As per media reports, nearly 63% companies has exceeded profit expectations out of the total companies that have posted quarterly results this season, an improvement from the 48% that beat forecasts in the previous quarter.
KDDI rose 4.3% after the company reported a 29% on-year increase in net profits in the April-June quarter thanks to increases in user contracts and data services.
Electrical engineering company Yokogawa Electric Corp. advanced 6.3% after the company expects its net profits to increase 34% in the fiscal year ending in March 2016, citing robust sales of plant control system and the weaker yen.
Japan Display Inc jumped 15% after its April-June results showed improvement of its earnings trend. Its revenues nearly doubled from the previous year to Y246 billion, buoyed by higher sales of smartphone displays, while it logged a Y461 million net loss, a sharp improvement from the Y17 billion loss a year earlier.
Olympus advanced 2.4% after the Tokyo Stock Exchange announced the endoscope-maker would join the JPX Nikkei 400 Index at the end of the month. Lixil Group Corp. slumped 5.1% after being removed from the gauge.
China market surges on SOE reforms hope
Mainland China's stock rallied sharply on sector restructuring hopes, sending the benchmark Shanghai Composite Index 4.9%, or 184.21 points, higher to end at 3,928.42 points, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 4.5%, or 97.69 points, to 2274.84 points. Total volume of A shares traded in Shanghai was 49.73 billion shares, while Shenzhen volume was 32.30 billion shares. All 10 SSE sectors climbed up, with shares of telecommunication, industrial, material, energy, technology, and consumer discretionary sectors being top gainer.
Weak economic data over the weekend also boosted shares, as it raised expectations of further monetary and fiscal easing. CHINESE exports tumbled 8.3% in July after a 2.8% uptick in June, while Imports fell 8.1% after a 6.1% decline in June, according to the data from the General Administration of Customs. China recorded a trade surplus of US$43.03 billion for the month.
The producer price index fell 5.4% from a year earlier, the National Statistics Bureau said yesterday, compared with an expected 5% drop. It was the worst reading since October 2009 and the 40th straight month of price decline. Falling producer prices are worrying because they eat into the profits of miners and manufacturers and raise the burden of their debts. China's corporate debt stands at 160% of gross domestic product, twice that of the United States, according to a Thomson Reuters study of over 1,400 firms. In line with the sluggish economy, annual consumer inflation remained muted at 1.6% despite surging pork prices, slightly higher than June's 1.4%.
Shares of phone, railway, energy, cement and property companies attracted the most buy orders. China Railway Group and China Railway Construction surged by the daily maximum allowable of 10% each, while Baoshan Iron and Steel led gains within the building material sector with a rise of 10%. China CSSC Holdings and China First Heavy Industries both jumped 10% daily limit. China Coal Energy Co. and China United Network Communications also surged by the 10% daily limit. In the real estate sector, heavyweights Poly Real Estate and China Vanke closed up 5 and 3.2%, respectively.
Hong Kong market ends down
The Hong Kong stock market ended slightly lower after trimming early losses of around 1.7%, thanks to strong gains in mainland markets which were fuelled by hopes that Beijing will soon announce restructuring in key industries. The HSI opened 118 points lower and immediately plunged to an intra-day low of 24,135 (down 416 points). But A-share market rallied, along with reports that SOE reform plan was approved by the State Council. The benchmark index recovered all of its earlier losses and saw an intra-day high of 24,602 in afternoon trade. The Hang Seng Index ended 31.35 points, or 0.13%, higher at 24521.12 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, jumped 63.72 points, or 0.57%, to 11291.66 points. Turnover increased to HK$80.3 billion from HK$71.4 billion on Friday.
Casino stocks were mostly higher, with Sands China (01928) leading rally, up 4% to HK$36.55, after Nomura upgraded the stock to "neutral" from "reduce", with a new target price of HK$35. Galaxy Ent (00027) edged up 0.4% to HK$37.1.
China Merchants (00144) jumped 3.4% to HK$29.1 after its property unit has announced restructuring plan and applied for a listing on the Shenzhen bourse.
CSCL (02866), China Ship Dev (01138) China Cosco (01919) and Cosco Shipping were rumoured to merge their businesses. Trading of the shares were thus suspended pending important announcements.
China telecom rose on the SOE consolidation theme. China Unicom (00762) rose 3.2% to HK$11.02. China Mobile (00941) gained 1.2% to HK$102.1. China Telecom (00728) put on 1.4% to HK$4.33.
Sensex, Nifty hit almost one-week closing low
Indian benchmark indices dropped sharply on first trading day of the week. A bout of volatility was witnessed in late trade on reports suggesting Land Bill has been deferred till next Parliament session as no consensus has been reached on controversial clauses impacted market sentiment. The S&P BSE Sensex lost 134.67 points or 0.48% to settle at 28,101.72, its lowest closing level since 4 August 2015. The CNX Nifty fell 39 points or 0.46% to settle at 8,525.60.
Metal & mining stocks declined on weak economic data in China. Tata Motors declined after announcing weak Q1 results. Telecom stocks declined. Realty stocks gained
According to reports, Land Bill has been deferred till next Parliament session as no consensus has been reached on controversial clauses. According to reports, the contentious Land Acquisition Bill will not come to Parliament before the winter session, with the Joint Committee of Parliament (JPC) examining the measure today, 10 August 2015, deciding to seek more time to finalise its report after Congress and Trinamool Congress (TMC) sought more time to study certain clauses. The ongoing monsoon session of Parliament is in its final week of proceedings and most part of it has been washed out due to standoff between the NDA government and opposition led by the Congress.
Foreign portfolio investors (FPIs) sold Indian shares worth a net Rs 7.22 crore from the secondary equity market on Friday, 7 August 2015, as per data from National Securities Depository (NSDL). Domestic institutional investors (DIIs) bought shares worth a net Rs 34.08 crore on Friday, 7 August 2015, as per provisional data.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.3% to 8466.84. South Korea's KOSPI dropped 0.4% to 2003.17. New Zealand's NZX50 declined 0.1% to 5865.02. Indonesia's Jakarta Composite index dropped 0.5% to 4748.95. Malaysia's KLCI sank 1.7% to 1654.37.
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