Headline indices of the Asia Pacific market ended the Tuesday's trading session modest higher amid expectations for a fresh dose of global economic stimulus, with anticipation that the U.S. Federal Reserve is expected to say it will continue its bond-buying program and the European Central Bank will cut interest rates on Thursday. Meanwhile record high finish of the US market and hopes of political stability in Italy after the formation of a new government also lifted sentiments.
Fed will kick off its two-day meeting today and is widely expected to keep policies unchanged. A focus is on whether recent weaker than expected data would prompt FOMC to have a more cautious tone in the statement. There have been increasing expectations for ECB to cut rates from the current historical low of 0.75% to 0.50% after recent PMIs posted risk of extending recessions, and Germany would slide into recession.
Appetite for risk assets underpinned further on tracking record finish for the S&P 500 Index overnight. The Standard & Poor500 index closed at another all-time high on Monday after better-than-expected pending homes sales for March. The National Association of Realtors on Monday said its seasonally adjusted index for pending sales of existing homes rose to a reading of 105.7 in March, up 1.5% from the previous month and a gain of 7.0% from a year earlier. The last time the reading was higher was in April 2010 when homebuyers were rushing to qualify for a tax credit.
Risk sentiments also supported by news that Italy's new Prime Minister Letta won his first confidence vote in lower house, by 453 to 153 votes. The new government is being backed by Letta's own center-left Democratic Party, Berlusconi's center-right People of Freedom as well as former prime minister Monti. Letta said that Italy will "die of fiscal consolidation alone, growth policies cannot wait any longer." He pledged to move quickly on measures to stimulate growth and create jobs and would ease some of the austerity measures. Letta is expected to win a second vote on Tuesday in the Senate.
In the Asia Pacific region, Australian share market advanced, with lenders led rally after stronger than expected profit report and dividend from Australia & New Zealand Banking Group. Meanwhile positive finish of the European and US markets also lifted sentiments. The benchmark S&P/ASX200 index advanced 65.40 points to 5,191.20, while broader All Ordinaries jumped 60.30 points to 5168.60.
ANZ today announced a statutory profit after tax of A$2.9 billion up 7% compared to the previous half (HOH). Cash profit of $3.2 billion increased 8% HOH and 10% against the prior comparable period (PCP). ANZ also lifted its dividend payout higher than expected ANZ will now pay an interim dividend of 73 cents per share, 11% higher than interim 2012.
Tokyo stocks fell Tuesday as a hardening yen, release of a flurry of economic data, and poor business results from heavily weighted companies such as Honda Motor, Fanuc, and Ricoh kept sell pressure on the market. The Nikkei Stock Average slipped 23.27 points, or 0.2%, at 13,860.86
Japan's Ministry of Economy, Trade and Industry said industrial production rose weaker than expected 0.2% in March after a 0.6% increase in the prior month. In another report, the Ministry of Economy Trade and Industry said retail sales fell 0.3% in March from a year earlier. Meanwhile, Japan's Statistics Bureau also said early Tuesday that the Japan's unemployment rate fell to 4.1% in March from 4.3% in February. In a separate report, the Statistics Bureau said Japanese household spending climbed 5.2% in March following a 0.8% gain in February.
Honda lost 3.4% to 3,875 yen after the firm said its current fiscal year net profit would miss forecasts, despite posting a likely rise of 58% to 580 billion yen. Factory automation technology maker Fanuc tumbled 5.6% to 14,700 yen after the company reported that its operating profit for the just-ended fiscal year fell 17% on year to 184.8 billion yen, hurt by a steep fall in orders. Ricoh also fell 8.4% to 1,086 yen after posting fourth-quarter operating profit of 23 billion yen, substantially below guidance, due to a slump in sales of the domestic office equipment and a larger-than-expected rise in costs.
Hong Kong shares moved higher, with the benchmark Hang Seng Index up by 0.7% to finish at 22,737.01, registering seventh higher close in eight sessions, as a record finish for the S&P 500 Index overnight boosted sentiments.
Among the 50 HK blue chips, 38 rose, while 7 fell and remaining 5 stocks steady. Esprit advanced 3.4% to HK$10.88, while Sands China fell 3.8% to HK$40.70, making themselves the largest blue-chip gainer and loser. Market heavyweights were firmer. China Mobile rose 1% to HK$84.95, while HSBC inched up 0.5% to HK$84.5. China oil-field service providers were higher. Anton Oilfield soared 6% to HK$6.19. Honghua gained 2% to HK$3.78. Jutal added 3% to HK$1.87. Some casino stocks retreated after Reuters reported China is sending an official with a tough cop reputation to be its top man in Macau. Shares of Sands China lost 3.78% to HK$40.70, while Galaxy Entertainment Group erased 0.57% to HK$34.75.
India's benchmark indices closed at highest in 1-1/2 months, led by FMCG, metal and healthcare stocks amid firm global cues. The 30-share BSE index Sensex was up 116.68 points (0.6%) at 19,504.18 and the 50-share NSE index Nifty was up 26.1 points (0.44%) at 5,930.20. FMCG stocks were the star-performers, up by 4.65%, with Hindustan Unilever led rally after its parent made a $5.4 billion open offer, while the realty stocks fell the most by 1.07%.
Elsewhere, Indonesia's Jakarta Composite index rose 0.7%, Malaysia's KLSE Composite rose 0.6%, new Zealand's NZX50 added 0.7%, Singapore's Strait Times rose 0.2%, South Korea's KOSPI Composite added 1.2%, and Taiwan's Taiex rose 0.8%.
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