Asia Pacific share market mostly advanced on Wednesday, 15 July 2015, as risk sentiments boosted up on tracking rally on the Wall Street overnight. Sentiment received a further boost from better-than-expected Chinese gross domestic product data. But gains were modest on caution ahead of Greek parliament vote on the reforms required to secure the new bailout and ahead of testimony of Fed chair Janet Yellen due later in the global day.
The National Bureau of Statistics reported that GDP of the world's second largest economy grew 7% over the year in quarter ended June 2015, same pace as a quarter ago but exceeded consensus of 6.8%. Activities in June also performed better than the market had anticipated. Retail sales rose 10.6% yoy in June, up from 10.1% in May and expectations of 10.2%. Industrial production expanded 6.8% in June, accelerating from 6.1% in May and exceeded the 6% growth anticipated by the market.
Greece is back in focus as Greek parliament is expected to vote today, 15 July 2015, on the reforms required to secure the new bailout for the country. The measures call for more severe spending cuts, market reforms and tax increases than those rejected by Greek voters in a referendum on 5 July 2015. Approval from the parliament is a prerequisite for other Eurozone leaders to start negotiation over the three year bailout that is worth up to EUR 86 billion.
Prime Minister Alexis Tsipras went on national television on Tuesday, saying the country has no choice but to accept what he called a "one-way street" European bailout deal. Faced with opposition from his own Syriza party, Tsipras urged passage of the deal in a parliament vote later today, adding that banks would not be able to open until the agreement was ratified.
The International Monetary Fund (IMF) criticized Greece's bail out deal in a report published yesterday, 14 July 2015, questioning Greece's ability to implement the tough fiscal measures involved. It warned the eurozone must commit to debt restructuring in order for the bailout program to work. If the currency union fails to assure the IMF it will reduce Greece's debt burden to sustainable levels, the fund signaled it may consider withdrawing from the program.
Among Asian bourses
Japan stocks rally continues
Japanese share market advanced for third straight session, on tracking gains on the Wall Street overnight, China's slightly-better-than-expected economic growth, and the Bank of Japan's decision to stand pat at its monetary policy meeting. However, gains on the upside capped on caution ahead of the US Federal Reserve Chairwoman Janet Yellen's semi-annual monetary-policy testimony. The Nikkei Stock Average advanced 78 points, or 0.38%, to end at 20463.33 points. The broader Topix index rose 0.47%, or 7.70 points, to close at 1646.41 points.
Following a two-day policy meeting on Wednesday, the Bank of Japan (BOJ) said it will continue to expand the monetary base at an annual pace of 80 trillion yen. The BOJ has trimmed its growth and inflation forecasts for the world's third-largest economy, but said a recovery is still underway as it held fire on more easing measures. The BoJ said Japan's economy would expand 1.7% (from 2% earlier this year) in the fiscal year to March 2016 while inflation would come in at 0.7% (from 0.8%). The Bank of Japan also cut its core CPI forecasts for fiscal 2016 and 2017, but kept its growth estimates for those years unchanged.
Total of 24 out of 33 TSE sectors advanced, with shares of drug makers, precision-instrument makers and warehouse operators were top gainers in the Tokyo market. Astellas Pharma climbed 1.8%. Electro-optics products maker Hoya Corp. rose 3.1%. Takashimaya added 4.2%
Export-related stocks ended mixed amid profit booking after halt in yen depreciation against greenback and euro. Sony Corp fell 0.9%, Panasonic Corp lost 1.4%, and Sharp Corp eased 2.3%, but Honda Motor Co rose 1.6%, Toyota Motor Corp climbed 0.9%, and Canon Inc added 1.8%.
Financials were likewise mixed, with Mizuho Financial Group Inc up marginally 0.04% and Sumitomo Mitsui Financial Group Inc up 0.2% but Nomura Holdings Inc fell 0.9% and Credit Saison Co sank 2.1%.
Shares of Capcom Co climbed up 7.2% after the company announced details on its upcoming videogame releases, including its "Street Fighter 5" title.
Australia market surges 1.1%
The Australian share market advanced for second straight day, on tracking gain on Wall Street overnight. Sentiment received a further boost from a slew of positive economic data out of China. The benchmark S&P/ASX 200 Index added 58.80 points, or 1.05%, to 5636.20, while the broader All Ordinaries Index surged 57.10 points, or 1.03%, to 5619.
All ASX sectoral indices advanced, with shares of energy and consumer staples industry being top gainers. Among blue-chip consumer staples stocks, Wesfarmers rose 2.5% to A$41.58 and Woolworths added 2.1% to A$28.30. Among energy stocks, Woodside Petroleum ascended 2.8% to A$34.89 and Santos added 3% to A$7.84.
Shares of financial companies also helped to support the market as well, with Australia & New Zealand Banking Group rising 0.6% to A$32.39 and Westpac Banking Corp adding 1% to A$33.96, meanwhile National Australia Bank added 1% to A$33.79 and Commonwealth Bank of Australia rose 1.1% to A$87.17.
Shares of mining companies closed mixed, with Rio Tinto up marginal 0.1% to A$53.12, while BHP Billiton closed 0.7% down at A$26.90 after the miner flagged another write-down of its US shale assets. Fortescue Metals Group declined 0.8% to A$1.77 after iron ore slipped overnight to US$49.40 a tonne. Mt. Gibson Iron advanced 10.5% to A$0.21 after the company reported a sharp drop in cash reserves and lower June output but also detailed its cost-cutting efforts.
China stocks extend retreat
Mainland China's stock market declined for second straight day, as profit booking continued amid dimming hopes of further stimulus after better-than-expected Chinese gross domestic product data. The benchmark Shanghai Composite Index retreated 118.78 points, or 3.03%, to finish at 3805.70 points, trimming gains from a three-day rally that lifted the benchmark roughly 13%. The Shanghai index was over 26% down from its peak on 12 June 2015. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 4.22%, or 90.67 points, to 2058.84 points. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, plummeted 5% to end at 2,590.03 points.
Shares of industrial, utilities and drugmakers were biggest drag on the market decline, with China Eastern Airlines Corp. plunge 10% daily limit and Huaneng Power International Inc., the biggest power producer, down 9.9%. Beijing Tongrentang Co. dropped 10%. Leshi Internet Information & Technology (Beijing) Co locked 10% lower limit. Juneyao Airlines slid by 10% daily limit after saying it plans to sell up to 58 million shares to raise 3.57 billion yuan ($574 million).
Chinese banks lent the most in six months in June and the country's money supply accelerated after the government boosted measures to spur the economy. The banks extended 1.28 trillion yuan (US$206 billion) in new loans last month, higher than the 1.08 trillion yuan in June last year and was the highest monthly lending since January, the People's Bank of China said yesterday. M2, the broad measure of money supply, grew 11.8% year on year by the end of June, 1 percentage point faster than the growth last month, the central bank said. New yuan loans in the first half were 6.56 trillion yuan, up 537.1 billion yuan from the same period of last year.
Hong Kong market falls 0.26%
The Hong Kong stock market ended softer in quiet trading, as profit booking continued on tracking losses in Mainland China markets. The Hang Seng Index dropped 65.15 points or 0.26% to finish at 25055.76 points, off an intra-day high of 25219.45. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, lost 154.97 points, or 1.31%, to 11681.20 points. Turnover reduced to HK$104.6 billion from HK$126 billion on Tuesday.
Sensex soars 265 points
Indian stock market closed higher on optimism about rate cut and hopes of cheaper crude oil import from Iran after it signed a nuclear deal with the major powers. The Sensex provisionally ended the day 0.95% or 265.39 points higher at 28,198.29. The Nifty gained 70 points or 0.82% to 8,523.80.
Maruti Suzuki's shares gained after Credit Suisse increased its target price on the stock and maintained its outperform rating.
Sun TV shares fell on media reports that the company may not be able to participate in the FM radio auctions.
Foreign portfolio investors (FPIs) bought Indian shares worth a net Rs 269.90 crore yesterday, 14 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 130.90 crore yesterday, 14 July 2015, as per provisional data released by the stock exchanges.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index added 0.1% to 9054.20. South Korea's KOSPI rose 0.7% to 2072.91. New Zealand's NZX50 added 1% to 5805.95. Singapore's Straits Times index advanced 0.7% at 3338.86. Indonesia's Jakarta Composite index fell 0.7% to 4869.85. Malaysia's KLCI rallied 0.4% to 1727.26.
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