Asia Pacific share market declined on Wednesday, 02 November 2016, on increased prospects of a US interest rate rise and jitters in the lead-up to next week's presidential election.
Global markets, which had priced in a much higher chance of a victory for Democratic candidate Hillary Clinton in the November 8 election, have been roiled by new polls that suggest the race with Republican Donald Trump may be growing too close to call.
Also adding to pressure was the Federal Reserve policy decision later in the day. The Federal Reserve is expected to keep interest rates unchanged on Wednesday at the conclusion of a two-day meeting, but the central bank is expected to set the stage for a December rise.
Among Asian bourses
Australia Market dives 1.2%
Australian share market closed steep down, with sentiments weighed down by growing uncertainty around the US presidential election and a Federal Reserve policy decision later in the day. Barring utilities and bullion sectors, all ASX sectors declined, with information technology, healthcare, consumer discretionary, financial, energy, materials, and industrial blue chip stocks being notable losers. At the closing bell, the benchmark S&P/ASX 200 index dropped 61.50 points, or 1.16%, to 5,229, while the broader All Ordinaries index was down 64.20 points, or 1.19%, to 5,311.
Financial and energy sectors took a beating, with Commonwealth erasing 0.8% to A$72.17 and Westpac declining 1.4% to A$30.03. Among oil and gas companies, Woodside Petroleum shed 1.1% to A$27.71, while Oil Search was down 1.4% to A$6.57 after oil prices fell for a fourth straight session.
Mining firms were also lower. Among the miners BHP Billiton lost 1.1% to close at A$22.56, Fortescue Metals 4.7% to A$5.22 and Rio Tinto 0.6% to A$53.90.
Virgin Australia Holdings slumped 2.1 per cent after Australia's second-biggest airline operator reported an underlying loss before tax of A$3.6 million for the first quarter, compared with an underlying profit before tax of A$8.5 million a year earlier.
Nikkei falls on uncertainty over the US presidential election
The Japan share market stumbled, with risk sentiments dragged down by tracking drops in Wall Street overnight and the yen's ascent against greenback. Meanwhile, the likelihood of a tight US presidential race and concerns over the outcome of the Federal Reserve meeting spooked sentiment. Total 31 out of 33 TSE sectoral issues declined, with Nonferrous Metals, Marine Transportation, Insurance, Glass & Ceramics Products, Real Estate, Banks, and Machinery issues being major losers. The 225-issue Nikkei average erased 307.72 points, or 1.76%, to close at 17134.68. The Topix index of all first-section issues finished 24.75 points, or 1.78%, lower at 1,368.44.
Financial and exporter stocks were particularly hard hit as investors digested what a win for Trump would mean for markets, given his stance on trade and economic policies. Sumitomo Mitsui shed 2.5% of its value, Mitsubishi UFJ Financial fell 2.4%, Suzuki Motor was down 1.8% and Honda Motor slipped 3.5%.
China Market falls on US election uncertainty, liquidity worries
Mainland China stock market ended down, as the level of uncertainty over the U.S. presidential election significantly rose with the race between Democratic candidate Hillary Clinton and Republican candidate Donald Trump tightening. Also adding to pressure was the upcoming initial public offering (IPO) of Bank of Shanghai, the largest IPO this year, which comes at a time when cash will be getting tighter as year-end draws near. The bank plans to rise up to 10.7 billion yuan. Every industry category on the main section except material issue lost ground, led by telecommunication services, industrials, utilities, and energy insurance issues. The CSI300 index of the largest listed companies in Shanghai and Shenzhen dropped 0.77% to 3,333.35 points, while the Shanghai Composite Index declined 0.63% to 3102.73 points.
Most sectors lost ground, with an extended correction in infrastructure and industrial stocks dragging on the market. Shares in major gold miners surged as investors flocked to safe haven assets. Zhongjin Gold shot up as much as 9.4 per cent, while Zijin Mining Group gained 5.2 per cent at one point.
Hong Kong Stocks spooked by Trump's resurgence in polls
The Hong Kong stock market finished the session lower amid increasing uncertainty over the US presidential election. Global markets, which had priced in a much higher chance of a victory for Democratic candidate Hillary Clinton in the November 8 election, have been roiled by new polls that suggest the race with Republican Donald Trump may be growing too close to call. The Hang Seng Index fell 1.45% or 336.57 points to 22810.50, while the Hang Seng China Enterprises Index shed 1.92% or 186.33 points to 9519.87. Turnover decreased to HK$54.7 billion from HK$65.6 billion on Tuesday.
Standard Chartered's (02888) 3Q earnings came in worse than market expectations, triggering a slew of research house downgrades. It ended down 7% to HK$62.65. HSBC (00005) also dipped 1.3% to HK$57.7 ahead of its earnings report next Monday (7 November).
Brent oil future price touched one-month low. PetroChina (00857) slipped 2.2% to HK$5.28. CNOOC (00883) fell 1.2 to HK$9.87.
Mainland lenders saw selling pressure. Bankcomm (03328) fell 1.8% to HK$5.88 after Macquarie rated the bank "underperform". ICBC (01398) and CCB (00939) also slipped 2% and 2.4% to HK$4.65 and HK$5.64. CCB became the worst performing blue chip today.
Sensex, Nifty hit almost four-month closing low
Indian benchmark indices suffered severe setback today, in sync with weak global stocks following uncertainty over the outcome of the upcoming US presidential election. The barometer index, the S&P BSE Sensex, lost 349.39 points or 1.25% to settle at 27,527.22. The Nifty 50 index lost 112.25 points or 1.3% to settle at 8,514.
Yes Bank fell 3.1%. The bank announced that it has generated $650 million worth of business outstanding (customer assets) at its IFSC Banking Unit (IBU) in Gujarat International Finance Tec City (GIFT). The announcement was made during market hours today, 2 November 2016. Yes Bank started operations in GIFT City in October 2015.
Global credit rating agency, Standard & Poor's affirmed India's sovereign ratings, welcoming the country's policy stability and improved monetary credibility, but ruled out any upgrade for this year or in 2017 because of weak public finances and low per capita income. The stance comes despite a push for a ratings upgrade by government officials, who have argued the country has kept its fiscal deficit in check and passed a slew of major economic reforms including a revamp of the goods and services tax (GST). But S&P today, 2 November 2016, stuck to its rating of "BBB-minus" with a "stable" outlook, saying it would need to see more efforts to lower the country's net general government debt level to below 60 percent of gross domestic product.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 lost 1.1% to 6853.75. Indonesia's Jakarta Composite index fell 0.2% to 5405.464. Taiwan's Taiex shed 1.4% to 9139.04. South Korea's KOSPI index fell 1.4% to 1978.94. Malaysia's KLCI was down 0.7% at 1659.60. Singapore's Straits Times index eased 0.23% to 2807.14.
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