Risk sentiment dented across the region on continued concerns how stricter sanctions on major energy supplier Russia would impact European economies and the situation surrounding a crisis-hit Portugese bank.
The situation surrounding troubled Portuguese lender Banco Esprito Santo was making investors' cautious. Portugal's central bank unveiled a plan late Sunday to rescue the country's second-largest lender by breaking up the bank and pumping in billions of euros of state money.
Portugal's central bank has taken control of Espirito Santo in a 4.9 billion-euro ($6.6 billion) bailout that will move most of the lender's assets to a new company called Novo Banco, according to a statement yesterday.
Concerns over European economies are emerging at a sensitive time for the global markets. U.S. businesses added jobs at a sturdy pace last month, but many scars from the financial crisis remain in the economy, even as the Federal Reserve is set to wrap up its crisis-response stimulus measures in the coming months.
Among Asian bourses
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Nikkei falls 0.63%
Japanese share market closed down, registering third consecutive drop, as risk sentiments dented on tracking a big selloff on Wall Street Friday, concerns over economic uncertainty in Europe, and the yen's rise against major rivals. The benchmark Nikkei 225 index dropped 48.61 points to close at 15474.50, while the Topix index fell 5.11 points to 1276.19.
Japanese exporters declined after yen appreciated against the greenback. The US dollar slipped as the solid July payrolls data was not enough to boost inflation pressure. The greenback was at 102.55 yen in Asian trade on Monday compared with 102.60 yen in New York late Friday. The euro bought at 137.66 yen against 137.78 yen in US trade.
Honda dropped 1.5% to 3,547 yen. Nintendo Co., the maker of Wii game consoles, slid 1.1% to 11,225 yen. Panasonic Corp, the supplier of batteries for electric-car maker Tesla Motors Inc., fell 1% to 1,243.5 yen.
Financials and realty stocks dropped. Mitsubishi Estate Co., the biggest developer, sank 1.9% to 2,486 yen. Sumitomo Mitsui Financial Group Inc. slipped 1.3% to 4,187.5 yen. Nomura Holdings Inc., Japan's biggest brokerage, declined 1.3% to 652.7 yen.
Astellas Pharma Inc. rose 2.7% to 1435.5 yen after the company logged an 81% increase in April-June net profits to 36 billion yen from a year earlier.
Teijin jumped 4.7% to 265 yen, after the company said operating profit was 4.8 billion yen ($47 million) in the three months ended June 30.
SoftBank Corp. dropped 3.7% to 7197 yen, extending Friday's 1.3% slump, amid concern its Sprint Corp. unit faces competition to acquire T-Mobile US Inc after news that France's Iliad SA made a buyout offer for T-Mobile US. The fourth-largest U.S. cellphone company has been in talks for more than six months to be acquired by Sprint, the No. 3 player, majority-owned by SoftBank.
Australia Stocks fall on weak offshore cues
Australian stock market extended falling streak for second consecutive session, as profit taking in blue chip stocks emerged on tracking drop in offshore bourses on Friday. Though, better-than-expected retail sales data capped broader losses. The benchmark S&P/ASX 200 Index dropped 15.50 points, or 0.28% to 5540.90, while the broader All Ordinaries Index sank 14.30 points, or 0.26%, to 5533.30.
Australian Bureau of Statistics data showed retail sales rose 0.6%, seasonally adjusted, in June. The result reversed two months of declining sales. A survey by ANZ Bank showed total job advertisements rose 0.3% in July on the top of June's 4.4% increase.
Healthcare sector led the Australian market retreat, with Ramsay Health Care lower by 1% to A$47.02, while Sonic Healthcare dropped 1% to A$17.87 and CSL Group fell 0.6% to A$64.94.
The financial stocks declined, with big 4 lenders being the biggest loser. Commonwealth Bank of Australia fell 0.3% to A$82.58, Westpac Banking Corp 0.6% to A$33.85, ANZ Banking Group 0.7% to A$33.34 and National Australia Bank 0.5% to A$34.77.
The property sector gained the most, as the newly created Scentre Group appeared to benefit from institutional re-weighting into its shares. The potential for further deals and possible acquisitions has investors cautious about selling in the sector. Scentre closed up 1.8% to A$3.39.
Consumer staples stocks also traded firmly, as traders mulled speculative reports of possible expansion into the financial sector by Wesfarmers via its Coles holdings. Wesfarmers closed up 0.1% at A$43.35. Woolworths rose 0.1% to A$36.49.
Explorer and producer Roc Oil Co surged 7.1% to A$0.675 on news that it spurned Horizon's attempted merger of equals in favour of an all cash bid at 69 cents per share from China's Fosun International.
Shanghai Composite zooms 1.74%
Mainland China stock market finished the session at highest level in 8-months, on speculation the government is accelerating state-owned enterprise reform and relaxing rules to help brokerages free up capital for expansion. The benchmark Shanghai Composite gained 1.74%, or 38.03 points, to close at 2223.33, the highest level since 10 December 2013, when it was closed at 2237.49. Turnover declined to 140.08 billion yuan from yesterday's 151.19 billion yuan.
Risk sentiments improved on positive market comments from the country's top securities regulator. A China Securities Regulatory Commission (CSRC) spokesman on Friday described the recent rally in China's stock market as a "rebound" due to improving performance in the economy, more liquidity, and market reforms, including the planned Shanghai-Hong Kong stock market connector pilot programme.
Brokerage shares jumped the most in Shanghai after the China Securities Journal reported that China Securities Regulatory Commission plans to lower some risk management requirements on brokerages. The net capital-net assets ratio requirement may be cut to 20% from 40%, it said. Haitong Securities Co rose 4.3% to 10.23 yuan and Founder Securities Co. surged 4.7% to 6.28 yuan. Citic Securities jumped 6.1% to3.61 yuan and Sinolink Securities Co added 3.4% to 22.53 yuan.
China Everbright Bank Co. gained 4.5% to 2.78 yuan and Everbright Securities Co. climbed 3.3% to 9.48 yuan on plans for their parent company to become a joint stock company.
Material and energy stocks advanced, boosted by tracking gains in manufacturing industries. China's official manufacturing PMI rose to 51.7 in July the strongest since April 2012 and up from 51 in June, the NBS said on Friday. A private survey also showed Friday that the HSBC/Markit China manufacturing PMI climbed to 51.7 last month, up from June's 50.7 but slightly below a preliminary reading of 52.
Aluminum Corp of China, the biggest aluminum producer, surged 5.6% to 3.75 yuan, while Baoshan Iron & Steel Co., the largest-listed steelmaker, added 4.5% to 4.61 yuan. Shenhua Energy, the biggest coal producer, added 2.6% to 16.10 yuan.
The National Bureau of Statistics said on Sunday that China's official non-manufacturing purchasing managers index fell to a six-month low of 54.2 points in July. That compares with a reading of 55 in June. A reading above 50 in PMI surveys indicates an expansion in activity while one below the threshold points to a contraction.
Hang Seng jumps 0.28%
Hong Kong share market advanced, on tracking sharp gain in Mainland A-share market, with brokerage and infrastructure related companies being the biggest gainers. The benchmark Hang Seng Index added 67.65 points to close at 24600.08. Turnover decreased to HK$67.42 billion from yesterday's HK$79.9 billion.
Brokerages jumped amid speculation the government is relaxing rules to help brokerages free up capital for expansion and ahead of the Shanghai-HK stock connect, rumored to start at mid-October. First Shanghai increased 18% to HK$1.76, while Citic Securities Co. rose 6.9% to HK$20.25. Cinda Int'l (00111) ascended 24% to HK$1.14. Shenyin Wanguo (00218) soared 6.8% to HK$5.17. HKEx (00388) put on 1.8% to HK$174.1
Infrastructure counters were higher on the back of news that Thailand's ruling junta approved China rail links worth US$23bn. The transport project will see two high-speed railways link up directly with China. China CNR (06199) gained 4.4% to HK$6.68. CSR (01766) put on 2.7% to HK$7.11. China Rail Cons (01186) jumped 5% to HK$7.66. China Comm Con (01800) and China Railway (00390) also added 3% and 3.9% respectively.
China Everbright surged 15% to HK$13.54 after saying its parent, China Everbright Group, will become a joint stock company instead of a state-wholly-owned enterprise.
Biostime International Holdings fell 4.1% to HK$37.20 after supplier of baby products declined market rumour of talks with Danone SA or any other foreign dairy company. Shares surged on Aug. 1 by the most in a year after Bocom International Holdings Co. said in a report the company might be an attractive takeover target for Danone.
Indian market snaps two-day losing streak
Indian stock market closed higher on value-buying by funds and retail investors amid firm European cues. The 30-share BSE index Sensex surged 242.32 points, or 0.95%, to end at 25723.16 and the 50-share NSE index Nifty jumped 81.05 points, or 1.07%, to end at 7,683.65.
Except Health Care index which was down 0.1%, all the other sectoral indices closed in green with gains of atleast 0.7%.Consumer Durables, IT, Capital Goods and Power indices were the top gainers, up 1.5-3.2%.
IT shares firmed up on the back of upbeat US economic data as they earn most of their revenues from exports to the US. Infosys was up nearly 3.6%, Wipro gained 2.5% and TCS was up 0.4%. Larsen & Toubro which had corrected last week post its June quarter earnings also witnessed buying at lower levels and were up 1.4%. Auto shares rallied on the back of upbeat sales growth in the month of July. Tata Motors was up 1.5%, M&M gained 1% while Maruti Suzuki and Bajaj Auto gained 2-3%.
Sudarshan Chemical Industries zoomed 20% to Rs 1,012 after the company announced that the board will consider maiden bonus issue and stock split of face value of equity shares from Rs 10 to lower denominations.
La Opala RG rallied 9% to Rs 1,348, extending its 10% gain in past three trading sessions on BSE, after the company said its board approved to issue 0.5 million shares representing 4.74% stake to private equity (PE) firm WestBridge Capital for about Rs 55 crore.
Elsewhere in the Asia Pacific region-- South Korea's KOSPI index rose 0.35% to 2080.42. Taiwan's Taiex index added 0.69% to 9330.19. Indonesia's Jakarta Composite index rose 0.6% to 5119.25. New Zealand's NZX50 fell 0.38% to 5090.69. Singapore's Straits Times index fell 0.78% to 3318.40. Malaysia market closed for holiday.
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