Asia Pacific share market closed mostly down on Friday, 07 August 2015, as investors reduced risk assets and cautiously awaiting for the non-farm payroll report from US today.
Investors are eyeing official US payroll data later Friday for an indication on whether the economy is strong enough for the Federal Reserve to tighten interest rates at its September or December meeting. Investors have been analysing economic data, from inflation to wages, for clues about when the Federal Reserve might raise rates.
Fed officials have said that continued improvement in the employment picture is a necessary precursor to tightening monetary policy. Strong July manufacturing data from the Institute of Supply Management on Wednesday bolstered the argument that the U.S. economy continues to rebound, raising the likelihood of a September increase.
Investors are worried that weaning off decade-long zero interest rates on the dollar could prove tough for some emerging economies and companies that have taken cheap dollar funding for granted. The Brazilian real hit a 12-year low and the South African rand hit a 14-year low on Wednesday. In Asia, the Indonesian rupiah and the Malaysian ringgit flirted with the lowest levels since the Asian economic crisis in the late 1990s.
Among Asian bourses
Australia stocks hit one-month low
The Australian share market ended the session at one-month low lower, as risk aversion selloff triggered across the board, after the RBA's quarterly Statement on Monetary Policy (SoMP) reinforced the central bank's neutral bias. All ASX sectors remained moored in the red, with Financials stocks leading declined on expectations that big banks will announce further capital rising. The benchmark S&P/ASX 200 Index tumbled 135.30 points, or 2.41%, to 5474.80 points, a lowest level since 13th July 2015, while the broader All Ordinaries Index declined by 127.80 points, or 2.28%, to 5472.30 points. There were 1.69 million transactions today valued at $6.2 billion. 295 shares ended higher, 651 closed lower and 346 were unchanged. For the week, the benchmark index declined 3.9%.
Financials sector was top loser in the ASX sector group, on anticipated on capital rising by other lenders after Australia and New Zealand announced was raising A$3 billion by selling shares at a 5% discount to comply with new rules forcing lenders to have more cash relative to their mortgage books. Australia's banking regulator last month raised the average capital that the country's four main lenders need to hold against potential home-loan losses. Shares of Australia and New Zealand Banking Group stumbled 7.5% to A$30.14 after the firm announced a $3 billion capital raising. Among other lenders stocks, Commonwealth Bank dropped 3.8% to A$81.30, National Australia Bank 2.3% to A$32.82, and Westpac Bank 3.3% to A$32.35.
Energy explorers and oil refiners were also ended lower after an overnight drop in oil prices. Woodside Petroleum sank 1.4% to A$33.97, Origin Energy 3% to A$10.02, Oil Search 1.7% to A$6.85, and Santos 2% to A$6.76.
The Australian currency (AUD) gained against basket of major currencies on Friday, after the RBA's quarterly Statement on Monetary Policy (SoMP) reinforced the central bank's neutral bias.
Japan stocks extend gain for third day
Japanese share market enjoyed a positive drive for third straight session, as risk sentiments boosted up by yen floating of upper-124 level against greenback, better than expected domestic earnings, and Bank of Japan bullish view to achieve 2% inflation without extra action. However, market gain was limited as investors awaiting the release of US jobs data later Friday for clues on the timing of an expected Fed interest rate rise. 24 out of 33 TSE sectors advanced, with Insurance, Metal Products, Construction, Textiles & Apparels, Glass & Ceramics Products, and Machinery stocks being top gainers. The Nikkei Stock Average advanced 60.12 points, or 0.29%, to end at 20724.56 points. The broader Topix index ended 5.61 points, or 0.34%, higher at 1679.19 points. For the week, the Nikkei index has gained 0.7%.
In the monetary policy meeting today, the Bank of Japan has maintained its upbeat assessment of the economy, signalling its conviction that inflation will hit its 2% target without additional monetary stimulus. As expected, the central bank maintained its monetary base at an annual pace of 80 trillion yen.
More than 250 firms on the Topix index scheduled to release earnings report on Friday. As per media reports, nearly 64% companies has exceeded profit expectations out of the total companies that have posted quarterly results this season, an improvement from the 48% that beat forecasts in the previous quarter.
SoftBank added 3.6% after the carrier posted better than expected quarterly results and announced plan to buy back about 1.7% of shares. The carrier net income almost tripled to 213.4 billion yen in the quarter ended June 2015.
Nikon gained 4.7%, after the camera maker reported 3.9 billion yen in operating profit in the quarter ended June 2015 and raising its profit forecast.
Konica Minolta slumped 8.5% after profit missed expectation. The camera maker net income fell 29% to 6.6 billion yen.
Shimadzu Corp jumped 14% after maker of measuring instruments upgraded its sales and earnings forecasts, citing its health-care business in the U.S., where biotechnology companies are seeing a flood of new investment.
China market rebounds 2.3% on govt. support hopes
Mainland China's stock ended sharply higher, snapping two days of falling streak, on prospects of consistent government support for the market and reports that trillions of yuan funds likely re-enter the equity market. All 10 SSE sectors climbed up, with telecommunication, technology, consumer discretionary, industrials and material sectors being top losers. The benchmark Shanghai Composite Index ended 82.67 points, or 2.26%, higher at 3744.20 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 3%, or 63.51 points, to 2177.15 points. Total volume of A shares traded in Shanghai was 44.55 billion shares, while Shenzhen volume was 25.19 billion shares. For the week, the Shanghai index rose 2.2%.
As per reports, the Chinese government agency tasked with buying stocks to prop up the country's wobbling markets is seeking an additional 2 trillion yuan in funds. Meanwhile, close to 300 China funds that oversee more than 1 trillion yuan are sitting on the sidelines with "ammunition" to enter the stock markets at any time.
Shares of technology and industrial companies advanced the most in SSE sectors after the Economic Information Daily reported that China may introduce a five-year Internet development plan in the fourth quarter that's focused on speeding up infrastructure construction of high-speed broadband, fourth-generation networks and cloud computing. East Money Information Co. jumped 6.7%. China Shipping Container Lines Co. surged by the 10% daily limit. China Shipbuilding Industry climbed 3%. China Eastern Airlines Corp. added 5.3%.
Hong Kong market gains 0.73%
The Hong Kong stock market ended higher, as risk sentiments recharged on tracking sharp rebound in the Mainland A-share market after reports that trillions of yuan funds will likely re-enter the equity market from a Chinese government agency and a bunch of China funds. The Hang Seng Index ended 177.19 points, or 0.73%, higher at 24552.47 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, jumped 134.67 points, or 1.21%, to 11227.94 points. Turnover increased to HK$71.4 billion from HK$67.3 billion on Thursday.
Financial stocks were top gainers in Hong Kong city bourse, led by Mainland Chinese banks. Bank of Communications rose 2.5% to HK$6.97, Bank of China 1.4% to HK$4.25, China Construction Bank 1.4% to 6.41, and Industrial & Commercial Bank of China 0.9% to HK$5.39. Ping An Insurance gained 1.7% to HK$44.05 as investors see a buying opportunity after the stock's prolonged correction despite strong business performance.
HKEx (00388) rose 3.4% to HK$212.2 even though its CEO today said he has no idea of when the Shenzhen-HK Connect plan will be launched. Credit Suisse has reduced a target price for bourse operator to HK$180 from HK$188, citing the exchange operator's earnings are likely to be hit by the slowdown in trading on its bourses.
Shipping counters soared across the board as the Baltic Dry Index doubled its gains since June. CSCL (02866) surged 24% to HK$3.11. China Ship Dev (01138) gained 12.5% to HK$5.49. China Cosco (01919) jumped 14% to HK$4.94.
CK Hutchison (00001) gained 1% to HK$115.3 after it announced a merger plan of its Italian telecom business.
China Railway Signal & Communication (CRSC) closed its first day of Hong Kong trading at HK$6.32, 0.32 per cent up from the HK$6.30 IPO price.
Nifty ends lower
Indian stock market ended the session marginally in the red as weak results of industrial goods makers raised fresh concerns over a much-anticipated recovery in the country's investment cycle and earnings growth, while caution also prevailed ahead of US jobs data due later in the day. The 30-share BSE index Sensex ended the session down by 61.74 points or 0.22 per cent at 28,236.39 and the 50-share NSE index Nifty ended down by 24.05 points or 0.28 per cent at 8,564.60.
Power equipment major Bharat Heavy Electricals (Bhel) tumbled 5.67% after net profit dropped 82.48% to Rs 33.89 crore on 15.38% rise in total income from operations to Rs 4361.68 crore in Q1 June 2015 over Q1 June 2014.
PSU OMCs edged higher on renewed buying. HPCL (up 7.48%), BPCL (up 2.17%), and Indian Oil Corporation (up 2.37%) gained. Shares of oil exploration and production (E&P) companies also edged higher. ONGC (up 4.31%), Reliance Industries (up 0.56%), Cairn India (up 0.63%) and Oil India (up 0.01%) edged higher.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index slipped 0.1% to 8442.29. South Korea's KOSPI dropped 0.2% to 2010.23. New Zealand's NZX50 declined 1% to 5868.66. Indonesia's Jakarta Composite index dropped 0.8% to 4770.30. Malaysia's KLCI sank 0.7% to 1682.65.
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