The Asian stock markets opened on the front foot, taking its lead from the U.S., where stocks on Wall Street finished higher overnight after bustling merger activity boosted investor sentiment for riskier assets. But regional bourses trimmed gains late afternoon, as profit takers stepped in, on concern about Chinese growth amid falling currency and ahead of the release of U.S. economic indicators later in the week.
Spot yuan has entered a dramatic weakening cycle in recent weeks, guided by a series of moves by the central bank, with the unwinding of yuan positions by banks and funds adding downward momentum. The yuan move has some relation to the slowdown in the Chinese economy.
Investors focus is now on the release of U.S. economic figures, including gross domestic product growth on Friday. This week will also see the publication of February consumer confidence, durable goods orders and initial jobless claims.
Among Asian bourses, Japan's stock market finished the session sharp higher, on catching cues from positive session on Wall Street overnight and generally upbeat trend on the regional bourses. The benchmark Nikkei-225 index grew 1.44% to finish the session at 15051.60, while the broader Topix index of all first-section shares grew 1.2% to 1233.66.
The yen traded quietly in the currency market on Tuesday amid a lack of incentives for bold moves as market participants awaited a clearer picture of U.S. economic health, with the dollar was at 102.40 yen on Tuesday compared with 102.45 yen in New York and 102.28 yen in Tokyo at 5 p.m. Monday.
Shares of SoftBank jumped 4.1% on reports the company will buy a stake in unlisted Japan-based online messaging service Line Corp. Line sports some 300 million users globally, and has been rumoured to be preparing for an IPO later this year. Meanwhile, shares of Line-affiliated companies, mostly microcap firms, were also well-bid, with Adways, DDS, and MediaKobo rising 11% each, while Mediaseek surged 16%.
Bank of Japan Deputy Governor Hiroshi Nakaso told lawmakers on Tuesday that the BOJ board shares the view that downside risks to global economic growth has become smaller, rejecting the idea that he is more cautious about aggressive easing than some of his peers. He also told the House of Representatives (lower house) Financial Affairs Committee that Japan's economy is on track toward a modest recovery and stable 2% inflation, repeating the BOJ's latest assessment. "On monetary policy, I think it is important to steadily implement the quantitative and qualitative easing," Nakaso said, referring to the aggressive cash injections and asset purchases the BOJ launched last April.
In Australia, shares in Sydney market declined for the first time in eight sessions in row, as investors cashing in profit following strong gains recently. The benchmark S&P/ASX 200 Index closed 6.40 points, or 0.12%, down at 5433.80, while the broader All Ordinaries Index fell 6.10 points, or 0.11%, to 5444.
The Australian market opened firmer, hitting fresh five and a half year highs earlier today, following a positive session on Wall Street and generally upbeat company forecasts. But the market lost momentum in late afternoon, as profit takers stepped in, after earlier the benchmark indices rising to its highest since June 2008, with mining sector was the biggest drag on trade after base metal prices generally eased on Monday up to 1.1%.
Shares of materials and resources companies declined the most in the Sydney market, dragged down by profit taking pressure. Rio Tinto Rio Tinto was down 1.3% to A$68.62 and BHP Billiton fell 0.7% to A$39.10. Woodside Petroleum dropped 0.9% to A$37.66 and origin Energy sank 1.2% to A$14.38.
Ramsay Health Care shares jumped 6.7% to A$47.54 after the health care services provider reported 10% revenue growth in the first half, beating expectations, due to strong market conditions and facility expansions.
QBE Insurance (QBE) shares rose by 5.3% to A$12.27 in spite the Australia's largest general insurer posting A$254m loss over 2013. In December last year, QBE warned the market of the loss, which was largely driven by underperformance in its U.S. division. QBE shares slumped by 26 per cent in December following the update.
Agri-business, Graincorp (GNC) eased by 0.5% to A$7.77 after warning the market to expect an A$80-A$100m full year profit ($75m less than the previous year) at its Annual General Meeting. GNC chairman Don Taylor said tough conditions in NSW and QLD are partly to blame.
Taxi payment business Cabcharge Australia (CAB) rose by 6% after posting a A$36m half year profit, thanks to its 'tap-and-go' card technology and healthier economic conditions. A fully franked A$0.15 per share dividend was announced, payable to eligible investors on the 30th April.
In New Zealand, shares in Wellington market ended lower today, as weakness in blue chip shares weighed down the local market. Fletcher Building and Telecom dampened sentiments as investors took the opportunity to take some profit from yesterday's gain.
The NZX 50 Index fell 2.134 points, or about 0.04%, to 4967.511. Within the index 13 stocks fell, 27 rose and 10 were unchanged.
Among NZ blue chips, Fletcher, New Zealand's largest listed company, fell 1.5% to NZ$9.72, from a near three month high of NZ$9.87. Telecom, the nation's biggest telecommunications company, fell 2.5% to NZ$2.39, yesterday it traded as high as NZ$2.455, or a near nine month high.
Freightways, New Zealand's largest listed courier company, climbed 2.1% to NZ$4.80, a seven year high after touching an intraday record of NZ$5. Online auction site Trade Me Group rose 2.7% to NZ$4.14. The company revised its earnings outlook down 4% after disappointing first-half results.
In China, key benchmark indices of the Mainland China market tanked on mounting jitters over liquidity crunch after People's Bank of China drained more cash from the banking system on Tuesday. Meanwhile, risk aversion selloff intensified on concerns yuan weakening along with rumors of China's IPO relaunch in mid-March will crimp growth The benchmark Shanghai Composite Index retreated 2.04% from prior day to finish at 2034.22.
The China's central bank has drained 100 billion yuan via 14-day repos on Tuesday, following on from last week's net removal of 108 billion yuan and 450 billion yuan drain prior to that week.
Shares of Mainland realty companies declined further today after media reports over the weekend said that real estate developers in east China's Hangzhou City lowered house prices and the Industrial Bank halted its loans to some real estate business. The poor performance of the property sector also followed government data released on Monday that showed home prices dropped month on month in more Chinese cities in January, signaling a gradually cooling property sector. Poly Real Estate Group Co. declined 1.5%, deepening yesterday's 8.5% tumble. China Vanke's shares lost 1.8% to 6.57 yuan after sliding 8.6% in the previous three days.
The Conference Board said its Leading Economic Index for China rose 1.2% in January to 283.4 after a 0.8% increase in December and +1.3% in November. Five of the six of the index's components contributed positively in January. "Unexpectedly strong growth in bank lending, coupled with improvements in the export sector, helped to support an acceleration of the LEI in January. Consumer expectations was the only negative contributor to the index," said Andrew Polk, resident economist at The Conference Board China Center in Beijing, in an accompanying statement. The Conference Board Coincident Economic Index, which measures current economic activity, increased 0.2% to 257.0.
The National Bureau of Statistics said on Monday that average disposable income in China was 18,311 yuan (US$3,006) in 2013 up 8.1% year on year in real terms. Average urban disposable income was 26,955 yuan rising 7% in real terms and rural disposable incomes increased 9.3% to 8,896 yuan, the statistics bureau said. It is the first release of combined urban and rural figures since the government began a national income survey in the fourth quarter of 2012.
In Hong Kong, shares in the HK market extended losses for second consecutive day, on concern about Chinese growth. The benchmark Hang Seng index declined 0.32% to finish at 22317.20, after erasing 0.8% yesterday.
Among the HK 50 blue chips, 25 fell and 23 rose, with two stock remaining steady. Financials were mostly weaker, with HSBC down 2.7% to HK$81.65 as its earnings fell short of expectations. Hang Seng was up 0.5% to HK$125.6 after some investment banks tweaked up their target prices for the bank.
Macau gaming stocks advanced, with Galaxy Ent jump 3% to HK$74.5, while Sands China soared 4.5% to HK$62.05 on news that its parent plans to spend US$10bn in Japan's gaming industry.
CR Enterprise shares plunged 5.5% to HK$21.45 after research house BofA Merrill Lynch downgraded the stock and lowered its target price.
The values of Hong Kong's total exports and imports of goods both recorded year-on-year decreases in January, at 0.4% and 2.7% respectively, according to data from the Census and Statistics Department showed. In January, the value of total exports of goods (comprising re-exports and domestic exports) decreased slightly by 0.4% over a year earlier to HK$303.5 billion, after remained virtually unchanged from a year earlier in December 2013. Within this total, the value of re-exports edged down 0.4% to HK$299.2 billion in January, while the value of domestic exports fell 4.3% to HK$4.3 billion. Concurrently, the value of imports of goods dropped 2.7% over a year earlier to HK$323.4 billion in January, after a year-on-year increase of 1.8% in December 2013. A visible trade deficit of HK$20 billion, equivalent to6.2% of the value of imports of goods, was recorded last month.
In Singapore, mild selling pressure emerged in the Singapore stocks after the recent flurry of gains. However, supportive cues from Asian equities capped the losses. The stocks in Singapore have been in a buoyant mood over last few days and hit a five week high last week on a supportive GDP data, pushing the benchmark Singapore stock index; Strait Times above 3100 levels. The index edged lower right from the start today though, closing at 3103, down 0.07% on the day.
The ST index saw 2098 million shares change hands with the value of trades placed at 971 million. The losers beat gainers by 200 to 190. CapitaLand Ltd shares continued to drop after the property developer reported a slump in fourth-quarter profit. The stock eased off by 0.35%. In banks, DBS added 0.24%, UOB also gained 0.24% while OCBC shed 0.31%. Among other major STI component stocks, Singtel extended recent gains to close up by 0.28% on the day.
In India, Indian stocks closed slight higher, helping the both key benchmark -- the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty reach their highest closing level in 4-1/2 weeks.
The S&P BSE Sensex garnered 41.03 points or 0.2% to settle at 20,852.47, its highest closing level since 24 January 2014. The CNX Nifty garnered 13.95 points or 0.23% to settle at 6,200.05, its highest closing level since 24 January 2014.
Infosys rose 0.79%. Infosys on 22 February 2014 announced that it has commenced work on its new campus in Mohali, Punjab. The new campus at SAS Nagar, Mohali, will be spread over 50 acres of land allocated by the Government of Punjab and will see construction undertaken in phases. In the first phase of construction, the company will make an investment of Rs 425 crore to create a built-up area of 6.5 lakh sq. ft. to seat 5,000 software professionals. Phase I of this state-of-the-art facility is likely to be completed in the next 24 months.
Tech Mahindra rose 0.65%. Tech Mahindra during market hours today, 25 February 2014, announced that the company has signed a formal teaming agreement with Sierra Wireless to work collaboratively to develop and deploy end-to-end M2M solutions for customers worldwide.
Tata Power Company lost 2.06% on equity dilution worries. The company after market hours on Monday, 24 February 2014, said that a meeting of the board of directors of the company has been convened on Thursday, 27 February 2014, to consider various fund raising options including but not limited to equity issuances by way of a rights issue, preferential issue, qualified institutions placement or any combination thereof.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index rose 0.18%. South Korea's KOSPI index rose 0.81%. Indonesia's Jakarta Composite was down 1%. Malaysia's KLSE Composite rose 0.28%.
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