Risk aversion selloff triggered across the regional bourses after a top-level Communist Party meeting disappointed investors looking for details on policy shifts to combat a slowdown in the world's second-largest economy. The communique that followed the meeting called for fewer investment restrictions and greater rights for farmers, but was lacking in specific details.
The Communist Party of China said Tuesday that reform of the economic system is the priority in its "decisive" reform push, but failed to provide any indications on how far the country's new leadership is willing or able to go in liberalizing the economy. State media quoted a party communique as saying that decisive results are to be achieved by 2020 -a deadline outlined by China's previous administration- but made only vague reference to reform areas, including fiscal and judicial reform as well as to "improving the financial market system." The communique, which was predictably short on detail, outlined agreements reached during the secretive, four-day third plenum of the Communist Party's 18th Central Committee, which ended here Tuesday.
Meanwhile, selling pressure also mounted on growing ideas the Federal Open Market Committee might start tapering its quantitative easing program (bond-buying program) as soon as next month. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
Confirmation hearings for Janet Yellen as the new Federal Reserve chief on Thursday could provide a fresh cue for financial markets. Investors will look to her testimony for clues about when the Fed will begin reducing its massive monetary stimulus that has propped up the world's largest economy. Yellen has been tapped to replace Ben Bernanke as Fed chairman at the end of January.
Among Asian bourses, Australian shares drifted lower, weighing the benchmark S&P/ASX 200 index down 1.1% to 5333.10.
Shares of Australian precious metal producers tanked as Gold fell again on Tuesday after comments by Federal Reserve officials showed the US central bank was getting closer to winding back stimulus. December futures gold price was down by US$9.90 or 0.8pct to US$1,271.20 per ounce. Among gold miners, Newcrest Mining fell 3.3% to A$9.52, Perseus Mining 2.1% to A$0.372 and Kingsgate Consolidated 2.4% to A$1.342.
Shares of industrial rail operator Aurizon Holdings dropped 3.3% at A$4.65, as shareholders delivered a first strike on executive pay at the AGM.
Leighton Holdings fell 3.2% at A$17.05, as it reiterated full-year profit guidance and reported a 65 per cent rise in underlying profits for the nine months to September.
Linc Energy dropped 7.9% to A$1.05, ahead of its exclusion from the S&P/ASX 200 at the end of this week.
Australian wages, excluding bonuses, rose a seasonally adjusted 0.5% in the September-ended quarter from the one immediately prior. Wages rose 2.7% from a year earlier, government data showed. In the private sector, wages rose 0.5% on quarter and rose 2.7% from a year earlier, while public-sector wages rose 0.5% on quarter and increased 2.6% on year.
In Japan, the Japanese share market settled tad below the neutral line on Wednesday, 13 November 2013, as investors booked some gains following sharp rally in previous two sessions, in response to weaker than expected Japanese core machinery orders data. The benchmark Nikei225 index sank 21.52 points to 14567.16, while broader Topix index lost 1.22 points to 1204.19.
Japanese core machinery orders fell an unexpectedly sharp 2.1% on month in September, in an about turn from strong growth the previous month. It also came after a 5.4% rise in August. The total amount of core orders was still above Y800 billion for the second month in a row for the first time since 2008. Core orders were also up 4.3% in July-September from the previous quarter. Unadjusted core orders rose 11.4% from the year-earlier month. Core orders exclude those from electric power companies and those for ships, which are often a source of volatility in the overall data due to their large sizes.
Shares of Pioneer Corp spurted 22% to 202 yen after announcing stronger than expected first half results. Electronic maker posted sales revenue of 236.3 billion yen, operating profit of 600 million yen and narrowed net loss of 5.0 billion yen all came in better-than-expected.
Sumitomo Mitsui Financial Group's shares rose 1.6% to 4,945 yen after the lender announced first half net profit of 505.71 billion yen, up rose 53% from 331.04 billion yen a year ago. It also raised its full-year net profit guidance to 750 billion yen from 580 billion yen.
In China, Chinese shares tanked, dragging the benchmark Shanghai Composite index down by 1.83% to 2087.94 on Wednesday, November 13, 2013, on disappointment after China's leaders failed to provide a clear direction on policy over the coming decade. The entire 10 industry group declined with energy, financial and industrial shares were the biggest drags in the Shanghai Composite.
Energy companies went down in Shanghai, with China Petroleum & Chemical, known as Sinopec, lost 1.7% to 4.68 yuan. PetroChina Co. decreased 1.5% to 7.65 yuan. China Shenhua Energy, the largest coal producer, retreated 1.1% to 15.97 yuan.
Chinese banks and financials were weak after data from the People's Bank of China (PBOC) showed that banks made new yuan loans of 506.1 billion yuan (US$83.10 billion) in October, lower than previous month's 787 billion yuan. Ping An Bank retreated 5.1% to 13.33 yuan. Minsheng Banking dropped 4.4% to 8.55 yuan. China Merchants Bank Co. fell 3.3% to 10.33 yuan.
In Hong Kong, HK shares drifted lower, dragging the benchmark Hang Seng Index down by 1.91% to 22463.83 while the Hang Seng China Enterprises Index tanked 2.7% to 10276.61, as the third Plenum's communique lacks details for reforms, falling short of market expectations.
Among the HK 50 blue chips, 1 stock rose and 48 fell, with another one stock remaining steady. Bank of China HK bucked the trend, rising 1% to HK$25.15, while Belle slid 4.7% to HK$9.48, making themselves the top blue-chip winner and loser.
Financial issues were hit in Hong Kong, with Industrial & Commercial Bank of China shed 3.55% to HK$5.16 and China Construction Bank Corp 2.85% to HK$5.80. Property and insurance shares were also lower, with Ping An Insurance Group Co down 2.1% to HK$60.95 and Sun Hung Kai Properties 1.1% to HK$100.20.
IT-related stocks continued their slide. Tencent dipped 4% to HK$392.6 ahead of its earnings report today. Netdragon fell 3.3% to HK$16.66. Forgame (00484) retreated 3.2% to HK$54.25.
In India, Indian benchmark indices finished lower fell for a seventh consecutive session after higher-than-expected retail inflation data raised fears Reserve Bank of India (RBI) may further hike policy rates in its next policy meet. Weakness in European and Asian stocks dampened sentiment. As per provisional figures, the S&P BSE Sensex was down 66.74 points or 0.33% to 20,215.17, its lowest close since October 8.
The annual consumer price inflation quickened more than expected to 10.09% in October from 9.84% in September, driven by food prices, government data showed on Tuesday. Food prices for consumers last month rose 12.56% from a year earlier, faster than September's 11.44% rise. The data was announced after market hours on Tuesday.
Elsewhere in the region, New Zealand's NZX 50 index rose 0.06%. Indonesia's Jakarta Composite index fell 1.8%. South Korea's KOSPI fell 1.6%. Taiwan's Taiex index lost 1.1%. Malaysia's KLSE Composite shed 0.7%. Singapore's Straits Times index rose 0.42%.
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