Asia Pacific share market declined on Tuesday, 16 September 2014, as risk aversion selloff on caution before of the start of a United States Federal Reserve Open Market Committee policy meeting later in the global day. The MSCI Asia Pacific Index fell 0.5% to 144.34.
The U.S. Federal Reserve is ending its asset-purchase program in October as the economy continued to improve. Investors around the world are attempting to gauge how soon the U.S. central bank will start raising interest rates. An ultra-loose monetary policy has helped stocks globally.
The Fed will begin its two-day policy meeting later on Tuesday, and investors will be scanning the outcome for clues on the timing of the first rate hike in more than eight years. The Fed would also release economic and interest rate projections, extending their forecast horizon through 2017.
It has said it does not expect to raise rates until 2015, but recent strong data has led Fed officials to acknowledge they may need to act sooner than they thought just a few months ago. An earlier-than-anticipated rate hike by Fed could lead to outflows, hurting emerging markets as the incentive for investors to seek higher yields stands reduced.
Among Asian bourses
Aussie shares fall to six-week low
Australian share market ended lower, as risk aversion selloff continued on caution ahead of the start of US Federal Reserve Open Market Committee policy meeting later in the global day. Investors risk sentiments also drifted down after minutes from the Reserve Bank of Australia issued a warning on house prices and reiterated the central bank's concern about the relative strength of the Australian dollar. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each declined by 0.5% to 5445.40 points and 5446.20 points, respectively. Turnover was relatively healthy with 1.93 billion shares worth of A$4.43 billion traded today.
The financial stocks declined the most in Sydney, with top four big banks leading losses in anticipation that the U.S. Federal Reserve would signal a sooner-than-expected increase in interest rates at its meeting this week. Commonwealth Bank of Australia lost 0.9% to A$78.19, Westpac Banking Corp fell 0.8% to A$33.50, ANZ Banking Group shed 0.8% to A$32.12 and National Australia Bank fell 0.5% to A$33.64.
Materials and resources stocks rebounded as Chinese iron ore prices rebounded from five-year lows overnight to push back above $US85 a tonne. Resources giant BHP Billiton bounced 0.3% to A$35.74, while main rival Rio Tinto was up 0.2% to A$61.81 amid reports Swiss mining giant Glencore had it in its sights as a takeover target. Iron ore miner Fortescue Metals Group added 1% to A$4. Iron ore juniors BC Iron and Atlas Iron were up 4.9% and 2.6% to A$2.15 and A$0.59, respectively.
Nikkei ends 0.23% down from 8-month high
Japanese share market finished the session down on Tuesday, 16 September 2014, as investors booked profit made in recent sessions after weaker-than-expected U.S. and Chinese factory output data and on expectation that the U.S. Federal Reserve would signal a sooner-than-expected increase in interest rates at its meeting this week. The Nikkei 225 index at the Tokyo Stock Exchange, which hit a fresh eight-month high on Friday, ended down 0.23%, or 36.76 points, at 15,911.53, while the Topix index of all first-section shares fell 0.22%, or 2.86 points, to 1,310.86. Japanese markets were closed Monday for a national holiday.
Share of banks, insurance firms, and brokerages that tend to benefit from low-interest rate policy fell. These sectors also have benefited from increased speculation for additional easing by the Bank of Japan. Mitsubishi UFJ Financial Group fell 1.2% to 614.6 yen. Casualty insurer NKSJ Holdings declined 1% to 2621 yen. Sumitomo Realty & Development dropped 1.9% to 3950 yen.
Biotechnology shares jumped after Japanese researcher's transplanted retina derived from induced pluripotent stem cells, or iPS cells. Shin Nippon Biomedical Laboratories jumped 17% to 1,008 yen and Cellseed Inc. soared 5.7% to 1,182 yen.
Fuso Chemical Co. soared 19% to 6,210 yen after saying it will conduct a five-for-one stock split on Oct. 1.
Shanghai Composite falls 1.82% from 18-month high
Mainland China share market closed sharply lower, as profit booking pressure across the board after report showing foreign direct investment sank to a four-year low in August and amidst speculation new share sales will divert funds. All 10 SSE sectors declined, with shares of consumer companies reliant on economic growth being major losers. The benchmark Shanghai Composite declined 42.58 points to finish at 2296.56 after ending at fresh 18-month highs in the previous two sessions. The CSI 300 index declined 48.43 points to 2388.76.
The Ministry of Commerce said on Tuesday, 16 September 2014, that foreign investors channelled US$7.2 billion of funds into China in August, down 14% from a year earlier. It compared with the decrease of 16.9% in July. In the first eight months, foreign direct investment edged down 1.8% to US$78.3 billion.
China's securities regulator is allowing 11 more companies to float shares, bringing to 44 the number of firms approved to go public since China resumed approvals for initial public offerings in June. Of the 11, 10 companies have registered their IPO prospectuses with the exchanges and are seeking to raise a total of 3.2 billion yuan ($521 million). The 10 firms are scheduled to take orders for share sales between Sept. 23 and Sept. 25.
Shares of consumer companies reliant on economic growth were major drag on the Shanghai market today amid profit booking. SAIC Motor, China's biggest listed automaker, fell 4.5%, while Hisense Electric fell 3.2%.
Defense stocks were down on profit taking after gaining more than 40% so far this year amid hopes of supportive measures from Beijing as well as the injection of assets from their state-owned shareholders. Zhonghang Electronic Measuring Instrument slumped 8.3% to 25.30 yuan, Avic Aircraft eased 7.8% to 14.90 yuan and China Avic Electronics lost 6.9% to 25.20 yuan.
Shares of media companies also succumbed to profit-taking. People.cn dropped 7.2% to 47.02 yuan, Chinese Universe Publishing & Media slid 7.7% to 15.22 yuan and Time Publishing & Media fell 7% to 18.12 yuan.
Hang Seng falls for eighth consecutive day
Headline shares of the Hong Kong market declined for eighth consecutive session, on tracking negative cues from jittery global markets and on caution before the US Federal Reserve's much awaited monetary policy meeting that starts later on global day. The Hang Seng Index ended 220.98 points, or 0.91%, down at 24136.01. The benchmark index has fallen for eight consecutive trading days, losing a total of 1182 points during the period. Market half-day turnover was HK$57.7 billion, compared to the whole day value of HK$66.6 billion on Monday. The Hong Kong stock exchange was closed in the morning session due to a typhoon.
Shares of Macau gaming players fell, dragged by SJM's (00880) staffs taking to the street again. The staffs sought to improve their wage and benefits. Galaxy Ent (00027) dipped 3% to HK$52.3. Sands China (01928) slipped 1.4% to HK$46. SJM declined 2% to HK$17.68.
Shares of China's three major telecom carriers were pressured on news that iPhone's network permit in China has yet to be approved. China Unicom (00762) plunged 4.5% to HK$13.08. China Mobile (00941) slid 4% to HK$94.95. China Telecom (00728) dived 4.8% to HK$4.71.
Macau gaming players were down on a recent labour disputes. Sands China (01928) declined 4% to HK$44.2. Galaxy Ent (00027) fell 3% to HK$50.6. Wynn Macau (01128) dropped 3% to HK$25.35.
PAX Global sank 12% to HK$7.30 after its controlling shareholder sold a stake in the company. Controlling shareholder Hi Sun Technology (China) has sold 80 million shares of the company at HK$7.5 each, a 9.7% discount to yesterday's closing price.
Sensex, Nifty hit three-week closing low
Indian stock market ended lower as investors turned wary ahead of the Federal Reserve two-day policy meeting. The S&P BSE Sensex lost 324.05 points or 1.21% to settle at 26,492.51, its lowest closing level since 26 August 2014. The CNX Nifty declined 109.10 points or 1.36% to settle at 7,932.90, its lowest closing level since 26 August 2014.
Metal and mining stocks extended Monday's losses as a recent batch of weak data out of China raised concern of a sharp slowdown in the world's second-biggest economy. China is the world's largest consumer of steel, copper and aluminum. Jindal Steel & Power (down 2.55%), Sesa Sterlite (down 0.4%), JSW Steel (down 4.65%), NMDC (down 0.57%), Tata Steel (down 3.79%), National Aluminum Company (down 8.05%), Hindustan Zinc (down 5.65%), Steel Authority of India (Sail) (down 3.45%) and Hindustan Copper (down 3.11%) declined.
Hindalco Industries dropped 1.77% on reports the Jharkhand government has ordered closure of five bauxite mines of aluminium major in the state as these mines have been operating under second deemed renewal. The state government had issued similar closure notice to 12 iron ore mines of Tata Steel and Steel Authority of India along with Hindalco on September 8. The central government had ordered in July demanding closure of all mineral mine leases which fall under second deemed renewal.
Power generation stocks fell across the board. Reliance Infrastructure (down 5.82%), Tata Power Company (down 5.23%), CESC (down 5.51%), NTPC (down 2.65%), Reliance Power (down 4.72%), NHPC (down 4.28%), Jaiprakash Power Ventures (down 3.51%), Adani Power (down 3.76%), JSW Energy (down 6.26%) edged lower.
Elsewhere in the Asia Pacific region-- Taiwan's Taiex index declined 0.91% to 9133.40. South Korea's KOSPI index rose 0.35% to 2042.92. Singapore's Straits Times index was down 1.2% to 3272.62. New Zealand's NZX50 dropped 0.4% to 5189.79. Indonesia's Jakarta Composite index sank 0.28% to 5130.50. Malaysia market closed for holiday.
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