JPMorgan strategist has recommended a trading buy of China equities in its report released on Monday, based on seasonality and all-time low valuations. The JPMorgan strategist expected a 15-20% market rebound in the coming weeks, once growth stabilizes due to seasonality and the market's focus switches to structural reforms. JPMorgan said Chinese banks will get a boost from low valuations, large dividends and high return on equity.
Also, Goldman Sachs Group Inc. Chairman and Chief Executive Officer Lloyd C. Blankfein said China's economic growth will have huge consequences for global expansion prospects.
The gains across the regional markets were, however, limited amidst some underlying caution before Fed chief Janet Yellen's Congressional testimony to lawmakers later in the global day today, 11 February 2014. Yellen will speak on monetary policy and the outlook for the economy later in the global day today for the first time since being sworn in as the central bank's head. Investors are hoping the report will shed light on the pace at which the central bank will taper its bond purchases.
Among Asian market, Australia's stock market finished higher for fourth session in row, with banks and financial blue chips leading the rally, thanks to positive trading update from the ANZ. The benchmark S&P/ASX 200 index advanced 32.40 points to 5254.50, while broader All Ordinaries grew by 30.80 points to 5267.30.
Australian stocks shimmied lower in early trade, with earnings news moving the share prices of some major names. However, market managed to overcome losses after Australia & New Zealand Banking Group reporting a quarterly profit gain of more than 20% with fewer non-performing loans. Meanwhile, further gains were supported by bullion miners which rose on tracking positive finish of gold prices in the international market.
Shares of Australian financials companies were sharp higher, with Australia & New Zealand Banking Group leading rally, up 2.2% to A$30.56 after reporting a quarterly profit gain of more than 20% with fewer non-performing loans. National Australia Bank rose 1.4% to A$33.89, Commonwealth Bank 1.4% to $75.92 and Westpac Banking Corp 1.5% to A$32.23. Insurer QBE leaped 3.6% to A$11.59 after brokerage house UBS increased its 12-month price target for the company to A$13 on the stock.
Shares of Australian gold miners went higher on tracking gains in precious metal prices in the international market. The gold price rose on Monday with the Comex gold futures up by US$11.80 or 0.9% to US$1274.70 per ounce. Gold miners Newcrest Mining surged 3.1% to A$11.45, Perseus Mining 6.6% to A$0.485 and Evolution Mining 3.2% to A$0.85.
Materials and resources stocks were mixed on profit booking following sharp gain on Monday. Rio Tinto Rio Tinto was down 0.6% to A$66.64 while BHP Billiton rose 0.1% to A$36.55. Oil Search dropped 2% to A$8.20 and Santos shed 1.1% to A$13.71, while origin Energy grew 2% to A$14.67.
Cochlear shares sank 8.9% to $53.68 after its interim net profit plunged 73% to A$21.0 million due to cash put aside for a patent dispute.
Engineering group Bradken plummeted 9.4% to A$4.72 after its half-year net profit fell 18.5% to $38.1 million.
Australian business confidence rose in January, the first improvement in four months, while business conditions edged closer to a three-year high, a monthly business survey by National Australia Bank showed on Tuesday. NAB's business conditions index rose to +4 in January from +3 in December, while its business confidence index climbed to +8 from +6.
The Bureau of Statistics said on Tuesday that average price of houses across Australia's capital cities rose 3.4% in the fourth quarter from the previous quarter. House prices rose 9.3% compared with the same quarter a year earlier.
Separately, the Bureau of Statistics said on Tuesday that number of Australian home-loan approvals fell a seasonally adjusted 1.9% in December from November. The value of loans for investment housing rose 2.9% from November, the ABS said. Finance approvals to build new houses raised 0.4% on-month in December. Approvals to buy new homes fell 1.9%, while lending for already built houses fell 2.2% in the month.
In New Zealand, shares in the NZ market finished higher, as earnings growth from Australia & New Zealand Banking Group and signs of an improving Australian economy lifted sentiment on companies doing business across the Tasman, such as Fletcher Building and Ebos Group. By the provisional closing, the NZX 50 Index gained 15.825 points, 0.3% to 4848.883. Within the index, 23 stocks rose, 22 fell, five unchanged.
ANZ jumped 3% to NZ$33.22. Australia & New Zealand Banking Group posted a 13% gain in first-quarter cash profit after recording a lower charge for impaired loans and boosting lending. Unaudited cash profit was A$1.73 billion in the three months ended Dec. 31, from A$1.53 billion a year earlier, the Melbourne-based lender said in a statement. Cash profit excludes one-time items. Statutory profit increased to A$1.64 billion from A$1.36 billion.
In South Korea, shares in Seoul market rose, sending the benchmark KOSPI index 0.46% up at 1932.06, thanks to a strong performance from retailers. Hyundai Department Store rose 1% after data showed sales at department store chains rose an annual 7.2% in January.
In China, Mainland China stocks were mostly higher, with the benchmark Shanghai Composite Index provisionally finish 0.84% higher at 2103.67
The market registered second day of winning streak on JPMorgan Chase & Co prediction that Chinese stocks will probably rally 15- 20% within weeks as gauges of economic growth stabilize due to seasonality and valuations rise from historic lows.
JPMorgan recommended a trading buy of China equities in its report released on Monday, based on seasonality and all-time low valuations. The JPMorgan strategist expected a 15-20% market rebound in the coming weeks, once growth stabilizes due to seasonality and the market's focus switches to structural reforms. The JPMorgan recommended stocks related to health-care, clean energy and environmental protection that may benefit from economic reforms. JPMorgan said Chinese banks will get a boost from low valuations, large dividends and high return on equity.
Among SSE sectors, 8/10 sectors of the SSE index inclined, with energy sector outperformed amongst the SSE sectoral peers, adding 2.4%, followed by financials up 1.8%, healthcare up 0.9%, utilities up 0.8%, telecommunication services up 3.4%, healthcare up 0.7%, materials up 0.5%, consumer staples up 0.5%, and industrials up 0.4%. Consumer discretionary sector declined 0.4% and information technology dropped 0.8%.
China's gold consumption jumped 41% to 1,176.40 tons in 2013, with jewellery demand climbing 43% to 716.50 tons and bullion demand soaring 57% to 375.73 tons, the China Gold Association said on Monday. Chinese demand hit a record as gold prices fell for the first time in 13 years amid an improving global economy and a rally in equities. Prices tumbled 28% in 2013.
In Hong Kong, stocks of the city's market skyrocketed, with the benchmark Hang Seng Index provisionally finish 383.72 points higher at 21962.98, with Chinese financial plays leading the rally after JPMorgan Chase & Co. predicted a sharp market rally within weeks.
Among the HK 50 blue chips, 46 stocks rose and 3 stocks down, while remaining one closed steady. Ping An Insurance (Group) Co advanced 5.12% to HK$63.65, while Lenovo Group fell 0.8% to HK$8.55, making themselves the biggest blue-chip gainer and loser.
Shares of Chinese financial companies listed in HK advanced, with Chinese insurers leading the rally. Both Ping An (02318) and China Life (02628) rose 5.1% to HK$63.65 and HK$21.6. Mainland lenders were also chased by buyers. CCB (00939) rose 3.1% to HK$5.34, while ICBC (01398) added 2.4% to HK$4.75. Citic Bank (00998) put on 4.3% to HK$3.92.
Macau gaming players also closed higher. Galaxy Ent (00027) and Sands China (01928) rose 3.7% and 1.8% to HK$72.15 and HK$57.6.
In India, key benchmark indices settled with small gains in what was a lackluster trading session. The S&P BSE Sensex rose 29.10 points or 0.14% to 20,363.37, its highest closing level since 7 February 2014. Among the 30-share Sensex pack, 15 stocks rose and rest fell.
Indian index heavyweight Reliance Industries declined after Delhi's chief minister Arvind Kejriwal said on Tuesday he has asked for an investigation to be launched into Reliance Industries Chairman Mukesh Ambani and policymakers over pricing of gas produced from the D6 block in the east coast. The stock was off 2.14% to Rs 804. "Today we have instructed the anti-corruption branch to file a criminal case against Murli Deora, FIRs against Veerappa Moily, V.K. Sibal, the (then) director general of hydrocarbons, Reliance Industries Chairman Mukesh Ambani and others," Kejriwal told a press conference. RIL had initially agreed to supply gas to utility NTPC at about $2.3 per million British thermal units (mBtu) for about 17 years, Kejriwal said. But price of gas from the D6 block was fixed at $4.2 per mBtu when Deora was oil minister. Last year, after Moily took over as oil minister, the central government agreed to link prices with global indexes, which could double the local gas prices from 1 April 2014. Kejriwal said he would ask the central government to suspend the latest order on gas pricing pending an inquiry.
The Delhi chief minister said state anti-corruption officials would look into whether Reliance Industries had violated contractual obligations and hurt industries that rely on gas. "If gas prices are hiked to $8 this April, there will be chaos among the people of this country. It will become impossible for the common people to live", he said.
Dr Reddy's Laboratories fell 0.66% to Rs 2,659 on profit booking after strong Q3 results. The stock hit high Rs 2,700 so far during the day, which is a record high for the counter. The stock hit a low of Rs 2,626.20 so far during the day. The company's consolidated net profit surged 70.21% to Rs 618.42 crore on 22.95% growth in total income to Rs 3551.49 crore in Q3 December 2013 over Q3 December 2012. The result was announced during market hours.
Astrazeneca Pharma India surged 15.63% to Rs 854.55 after the company reported a net profit of Rs 1.52 crore in Q3 December 2013 as against net loss of Rs 17.70 crore in Q3 December 2012. The Q3 result was announced after market hours on Monday, 10 February 2014. Astrazeneca Pharma India's net sales rose 13.3% to Rs 118.88 crore in Q3 December 2013 over Q3 December 2012.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index grew 0.46%. Singapore's Straits Times Index was up 0.4%, building on rises over the past three sessions. Malaysia's KLSE Composite rose 0.44%. Indonesia's Jakarta Composite grew 0.44%, recovering more than a fall in the previous session. The Philippine index climbed 0.9% after the statistics office released strong data on December exports. Japan stock market closed on Tuesday for National Foundation Day
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