Profit taking pressure dominated across the regional markets after better than expected private-sector job growth data refuelling concern an improved U.S. economy might prompt the Federal Reserve to accelerate the process of winding down bond buying. Market participants are eyeing on official jobs data due Friday. The figures are seen as a key gauge for any further reductions in the stimulus.
On Wednesday, payrolls firm ADP issued its closely watched report that showed U.S. private-sector job growth surged in December, topping November for the strongest pace of the year with a net new 238,000 jobs.
Also, U.S. Federal Reserve meeting minutes showed most Fed policymakers thought the U.S. economy could withstand reduced monetary stimulus. The Fed has been buying $85 billion of bonds a month in a strategy dubbed quantitative easing, or QE, but said in December it will trim that by $10 billion to $75 billion beginning this month.
Selling pressure in the regional market also fuelled by China's annual consumer inflation data that hit a seven-month low in December. Chinese consumer inflation slowed to 2.5% in December from November's 3% figure, while producer prices fell 1.4% from a year earlier. The inflation figures came after some disappointing economic numbers from China earlier in the month that pointed to decelerating activity in both the services and manufacturing sectors.
Among Asian bourses, shares of the Japan's share market declined, weighing the benchmark Nikkei Stock Average down 1.5% to 15880.33, as the yen rose and Wall Street ended mixed. The slump added to losses earlier this week as profit-taking set in among investors who watched the Nikkei surge 57% last yearits best performance since 1972.
Export related shares were weaker, with Canon Inc. down 2% to 3265 yen on a report operating profit at the world's biggest camera maker probably missed its own forecast. Nissan Motor Co fell 0.3% to 932 yen, Honda Motor Co 0.5% to 4260 yen and Toyota Motor Corp 0.5% to 6270 yen
Japanese consumer confidence worsened in December from three months earlier for the second consecutive quarterly drop as more people reported their income had fallen from a year earlier, according to the results of the Bank of Japan's quarterly survey released Thursday. The data also showed that fewer people said prices had risen from a year earlier despite higher food and energy prices, which had been pushed up by the weaker yen. The BOJ's consumer sentiment diffusion index for the current climate fell 0.9 points to -9.2 in December after falling 3.5 points to -8.3 in September.
A member of the Bank of Japan's (BOJ) policy board said the central bank should move quickly to step up its monetary easing if the country's economy or prices diverge from their predicted paths. "I believe that we should take additional easing measures without hesitation to avoid jeopardizing the Bank of Japan's credibility if it becomes clear that economic and price conditions have sharply diverged downward from our baseline scenario," Sayuri Shirai said in the text of speeches released Thursday by the BOJ. Ms. Shirai indicated she had doubts about the likelihood the BOJ will achieve its inflation goal in two years, saying "there may be high uncertainty regarding the duration in which to achieve the target." That is because it could take "some time" before the full impact of the BOJ's current easing program is felt, considering consumer worries about a rapid decline in real disposable income as well as firms' caution over raising sales prices.
In Australia, Australian stock market reversed early losses to finish edge higher, as news of an uptick in retail sales helped offset a fall in miners and banking stocks. The S&P/ASX 200 index added 8.4 points to finish at 5,324.4, snapping four sessions of losses.
Shares of consumer goods and retailers went higher after data from the Australian Bureau of Statistics showed an uptick of 0.5% in retail turnover for November. Consumer retail staples Woolworths and Wesfarmers added 1% and 0.3% to A$34.21 and A$44.06, respectively.
Metals and mining shares finished weaker, with BHP Billiton down 0.2% to A$36.97 and Rio Tinto down 0.1% to A$65.30. Fortescue Metals lost 0.6% to A$5.36.
The financial stocks were mixed, with Commonwealth Bank up 0.1% to $77.98 and National Australia Bank up 0.2% to A$34.45, while Australia & New Zealand Banking Group was down 0.4% to A$31.59 and Westpac Banking Corp 0.3% to A$31.94. Among insurers, QBE Insurance Group rose 2.5% to A$12.07.
HFA Holdings Ltd soared 22.6% to A$0.95 after the holding company for global funds management said it expects improved earnings results for the first half of the 2014 financial year.
Qantas Airways ended 1.8% higher at A$1.12, despite credit ratings agency Moody's downgraded its rating to Ba2 from Baa3.
The latest ABS Retail Trade figures show that Australian retail turnover rose 0.7% in November 2013, seasonally adjusted, following a rise of 0.5% in October 2013. Through the year, Australian retail turnover rose 4.6% in November 2013, seasonally adjusted, compared to November 2012.
Separately, ABS Building Approvals show that the number of dwellings approved rose 2.4% in November 2013, in trend terms, and has risen for 13 months.
In South Korea, shares in Seoul market declined, with the benchmark KOSPI index down by 0.66% to finish at 1946.11.
South Korea's won declined 0.28% to 1062.70 against the US dollar from its last closing of 1,064.90 won after the Bank of Korea decided to keep the benchmark lending rate unchanged at 2.5%, in line with expectations.
South Korea's central bank has kept its 2014 growth forecast for Asia's fourth-largest economy at 3.8%. Kim Choong-soo, the Bank of Korea governor, says Thursday that South Korea's economy will expand at the fastest clip in four years as a global recovery continues. The central banker also says the U.S. Federal Reserve's decision to reduce stimulus is favorable for South Korea because it shows the U.S. economy is recovering. His remarks come after the central bank held its key interest rate steady for an eighth month. The unanimous decision comes amid concerns that Japan's weak yen and the rise of the Korean won could undermine growth.
In China, China's stock market finished weaker, hit by steep selling in last trading hour on renewed concern over market liquidity. Material producers and automakers led declines. The benchmark Shanghai Composite index dropped 16.72 points to finish at 2027.62, while the CSI 300 Index shed 19.69 points to close at 2222.22.
Risk sentiments across the Shanghai market remain weak on concern over market liquidity after the resumption of initial public offerings and as People's Bank of China declined to add fresh short-term funding again to the interbank market today.
The China Securities Regulatory Commission approved seven IPOs as on 7 January 2014, bringing the total number of those approved to 38. Shaanxi Coal Industry Co. plans to raise 9.83 billion yuan ($1.6 billion) by selling one billion shares in Shanghai on Jan. 17, making it China's biggest IPO in more than two years.
Selling bias intensified further after China's cabinet drafted a framework to tighten the oversight of rapidly increasing shadow-banking industry. The move suggests that Beijing is looking to control rapid buildup of debt in recent years. The State Council said on Monday, 6 January 2013, that it had temporarily suspended laws to allow international shipping joint ventures and foreign-owned international shipping management firms in the zone. It also temporarily halted a ban on sales of game consoles by foreign-invested companies and delegated the task of drafting new rules to departments overseeing cultural matters. Consoles such as Microsoft's Xbox 360 and Sony Corp.'s PlayStation were banned by China in June 2000.
Among blue-chips, Great Wall Motor Co., the biggest Chinese maker of sport-utility vehicles, lost more than 5% after forecasting slowing sales growth for this year. Yunnan Copper Industry Co. slid to the lowest level in more than five years. Offshore Oil Engineering Co., a unit of Cnooc Ltd., surged 9.9% after saying profit probably tripled.
China's inflation rate eased in December to 2.5% amid signs the world's second-largest economy might be cooling. Consumer price increases were down from November's 3%. Inflation for the full year of 2013 was 2.6%, well below the ruling Communist Party's target of 3.5%. Lower inflation could ease pressure on Chinese leaders as they try to focus on promised reforms aimed at making the economy more productive and keeping growth strong.
In Hong Kong, shares in HK market drifted lower, as risk off selling across the board on tracking fall in mainland China stocks and renewed concerns about acceleration in Federal Reserve process of winding down bond buying. The benchmark Hang Seng Index provisionally ended 209.26 points lower from prior day at 22787.33.
Among the HK 50 blue chips, 41 fell and 7 rose, while remaining 2 stocks finished steady. Belle International Holdings declined 4.8% to HK$9.47, while China Resources Power Holdings Co jumped 3.6% to HK$18.20, making themselves the biggest blue-chip loser and gainer.
Hong Kong listed Chinese consumer stocks fell, with Wang Want China Holdings down 2% to HK$10.78, Tingyi Holdings Corp down 0.67% to HK$22.10, and footwear retailer Belle International Holdings down 4.8% to HK$9.47.
Hong Kong listed Mainland Chinese mobile carriers also declined. China's biggest telecom company China Mobile dropped 1.2% to HK$77.50, while smaller rival China Telecom Corp. shed 1.6% to HK$77.35 and China Unicom Hong Kong lost 1.8% to HK$11.02. Both China Telecom and China Unicom have cut their contract prices for Apple Inc. iPhone5s by more than 15% before next week's launch of the device by China Mobile. China Mobile reached a long-awaited deal with Apple in December to distribute iPhones in China.
In India, key benchmark indices extended losses and hit fresh intraday low in afternoon trade. At 13:20 IST, the S&P BSE Sensex was down 61.78 points or 0.3% to 20,667.60. The index fell 76.69 points at the day's low of 20,652.69 in afternoon trade, its lowest level since 7 January 2014.
Among the 30-share Sensex pack, 20 stocks declined and rest of them gained. AXIS Bank (down 2.61%), Maruti Suzuki India (down 1.26%) and Hindalco Industries (down 2.64%) edged lower from the Sensex pack.
Bank of Baroda shed 1.24%. The state-run bank said during market hours that a meeting of the board of directors of the bank will be held on 15 January 2014, inter alia, for considering a proposal to declare/pay interim dividend for the year ending 31 March 2014. The bank also said that 21 January 2014 has been fixed as the record date for the purpose of payment of interim dividend, if declared.
Dr Reddy's Laboratories was up 1.85% at Rs 2,578.70. The stock hit record high of Rs 2,585 in intraday trade.
Ranbaxy Laboratories edged lower in choppy trade after the company announced the signing of a licensing agreement with EPIRUS Switzerland GmbH, a wholly-owned subsidiary of Boston-based EPIRUS Biopharmaceuticals, Inc. (EPIRUS), for BOW015 -- a biosimilar version of infliximab. The stock was off 0.17% at Rs 473.20. The scrip hit high of Rs 482.55 and low of Rs 465.20 so far during the day. Under the terms of the agreement, EPIRUS will develop and supply the product, and upon regulatory approval Ranbaxy will market the product in India and other emerging markets.
Aurobindo Pharma shed 3.73%. In clarification to news reports about a boiler blast at one of Aurobindo Pharma's units, the company during market hours today, 9 January 2014, clarified that there has been no such incidence and cautioned all shareholders and investors not to take cognizance of these unverified reports.
Suven Life Sciences rose 4.33% after the firm said it has secured 3 product patents one each from Australia, Sri Lanka and South Korea for NCE's for the treatment of disorders associated with neurodegenerative diseases. The announcement was made during trading hours today, 9 January 2014.
Mastek rose 3.67% to Rs 206.30 after the company said its board approved buyback of shares. The company made the announcement after market hours on Wednesday, 8 January 2014. Mastek said its board approved buyback of maximum of 32 lakh equity shares and minimum of 9.50 lakh equity shares from the open market at a price not exceeding Rs 250 per equity share for an aggregate amount not exceeding Rs 54.50 crore. The buyback offer size represents 14.92% of the aggregate of the company's paid up equity capital and free reserves as on 31 March 2013, the company said in a statement.
Elsewhere in the Asian Pacific region, New Zealand's NZX50 index rose 0.73%. Indonesia's Jakarta Composite index added 0.36%. Taiwan's Taiex index lost 0.48%. Malaysia's KLSE Composite shed 0.12%. Singapore's Straits Times index lost 0.23%.
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