Headline shares in the Asia Pacific market closed mostly lower after rollercoaster ride on Friday, May 24, 2013, with the MSCI Asia Pacific Index slid 0.3% to 138.22, after erasing a 0.9% initial gain. Investors risk sentiments remain subdued after big selloff previous day on fresh jitters about economic health of China and fears over US Fed's scaling back monetary stimulus program.
Risk aversion selling was continuing for second day in row as investors unsettled by a report that showing manufacturing in China, the world's No.2 economy, unexpectedly shrank in May 2013. A preliminary reading of a HSBC and Markit's Purchasing Managers Index fell to 49.6 in May, compared with a final reading of 50.4 in April. The latest reading is in contractionary territory, as marked by a figure below 50. Anything above 50 indicates growth. China's booming economy has been a major driver of global growth in recent years and investors worry when they see signs that it's slowing down.
Meanwhile, concern that the Federal Reserve might ease back on its economic stimulus program sooner than expected had also riled investors. Minutes from the latest Fed meeting, released Wednesday, indicated that several policymakers are leaning toward slowing the central bank's bond-buying program as early as June, sooner than many anticipated, if the economy continues to recover. The US central bank is spending $85 billion a month buying bonds. That program has been keeping interest rates low in an effort to encourage borrowing, spending and investing.
In the Asia Pacific region, Japan's Nikkei 225 index, which plummeted 7.3% on Thursday, ended rollercoaster session 0.89% higher at 14,612.45, while South Korea's Kospi gained 0.22% to 1,973.45 and China's Shanghai Composite settled 0.57% higher at 2288.53. India's Sensex settled 0.15% higher at 19,704.33.
New Zealand's NZX50 Index dropped 1.36% to 4,526.24. Australia's All Ordinaries tumbled 1.5% to 4,964.30, hit by losses in banking and mining shares. Hong Kong's Hang Seng ended 0.23% lower at 22,618.67 after bobbing between slight gains and losses. Taiwan's Taiex Index fell 0.34% to 8,209.78. Markets in Singapore, Thailand, Malaysia and Sri Lanka are shut today for holidays.
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Back to country wise, Japanese shares ended rollercoaster drive modest higher, with the Nikkei Stock Average up by 0.9% at 14,612.45, after yesterday's 7.3% plunge, thanks to dollar's rebound and limited falls on Wall Street overnight following sound US economic gauges. The benchmark index was briefly shedding as much as 3.5% earlier in the afternoon as remarks from the Bank of Japan governor failed to ease concerns about a rise in government-bond yields. Bank of Japan Gov. Haruhiko Kuroda said stability in the country's debt markets was extremely desirable, and that the central bank would strengthen communication with the markets to head off volatility in bond yields.
In Australia, the Australian market declined for second straight day after disappointing factory activity data from China, Australia's largest export market. Today's drop wiped another A$23 billion off the market's value, adding to yesterday's A$30 billion drop. The benchmark ASX200 index closed 1.56% lower at 4983.50, while the broader All Ordinaries index shed 1.52% to 4964.30. The ASX and All Ordinaries both shed 3.8% over the week, its biggest weekly loss in 18 months.
In China, the Chinese market closed volatile session modest higher on the back sharp gains in healthcare and technology stocks. The Shanghai Composite Index rose 0.57% to 2288.53. However, gains on the upside was limited on cautions ahead of the release of key economic data next week after gauge of factory activity showed further signs of losing steam in May. The statistics bureau is scheduled to release data on industrial companies' profits on May 27.
In Hong Kong, HK shares closed lower in volatile trading, weighing the benchmark Hang Seng Index 51.01 points, or 0.23%, lower at 22,618.67. Three of the four sub-indices lost ground, with the Properties sub-index declined the most by 1.06%, followed by Finance by 0.3%, the Commerce & Industry by 0.01%, while the Utilities moved up 0.73%. Banking giant HSBC, which accounts for the largest weighting of the Hang Seng Index, fell 1.09% to HK$86.15.
In India, Indian share market closed higher today, registering first gain in five consecutive sessions. The barometer index, the S&P BSE Sensex, was up 30 points or 0.15%, off close to 130 points from the day's high and up about 135 points from the day's low. Index heavyweight and cigarette major ITC edged lower. Another index heavyweight Reliance Industries (RIL) edged higher. The market breadth, indicating the overall health of the market, was positive.
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