Decline in the regional bourses came amid mounting tensions over the conflict in Syria after US Secretary of State John Kerry indicated that the White House is considering military action against Syria and declines on other Asian stock markets dampened investor sentiment.
The US signaled the possibility for striking cruise missiles to deter and degrade the capabilities of Syrian President Assad whose regime has been accused of using chemical weapons against the civilians. According to US Secretary of State Kerry Syria's use of chemical weapons is undeniable and is a moral obscenity. He also stated that President Obama believes that there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people. The tensions heightened further as UN inspectors were fired on as they attempted to inspect the site of alleged chemical attacks.
Among Asian peers, Tokyo market finished lower amid uncertainty over the Federal Reserve's stimulus policy and heightened tensions in Syria. Meanwhile overnight losses on Wall Street and the dollar's fall against the yen also fueled selling. The benchmark Nikkei Stock Average fell 93.91 points, or 0.69%, to end the day at 13,542.37.
The Japanese yen strengthened against the US dollar for a second day, strengthening 0.6 percent to 97.90 per dollar as investors sought the currency as a refuge amid nervousness over the international response to alleged chemical weapon use in Syria.
Sumitomo Metal Mining Co rose 1.1% to 1370 yen after the Nikkei newspaper reported a brighter profit outlook at the company.
Shares of Sony added 2.8% to 2037 yen on reports that the company's highly-touted PlayStation 4 game console is receiving strong pre-order flow in the U.S.
Shares of Tokyo Electric Power rebounded 12.3% to 531 yen on reports that the Japanese government will step forward to deal with ongoing contaminated water leak at the company's Fukushima Daiichi nuclear power plant. Shares had slipped 27% over the past six sessions on leak-related news and reports illustrating the severity of the situation.
Australian share market finished edge higher, with gains in shares of consumer goods, drug makers and lenders helped to offset losses elsewhere. The benchmark S&P/ASX200 advanced 5.80 points, or 0.11%, to 5141.20, while the broader All Ordinaries rose 3.70 points, or 0.07%, to 5130.80.
Whitehaven Coal declined 1% to A$2 after posting a full year loss of A$82 million as compared A$62.5 million profit in the previous year. The company expects no improvement in prices in the short term. Average coal prices of $83.81 a tonne in 2012/13 were down 25% from the prior year. The company operates mines in the Gunnedah basin in northern NSW. Revenue from coal sales increased slightly from the previous year to $622 million as production rose. However other adverse events contributed to the loss, including the costs of closing its Sunnyside mine to go on care and maintenance, a train derailment and scaling back of activities at some mines because of the weak coal market. Whitehaven forecasted production and sales growth in the 2013/14 financial year, to 11 million tonnes.
Shares of Billabong International declined 5.3% to A$0.535 after the surfwear retailer posted a wider-than-expected yearly loss of A$860 million after it wrote down the value of its brands. The net loss for the year through June included A$867.2 million in one-off items among which write-down on the value of the company's brands and previous acquisitions. Sales revenue fell 13.5% to A$1.34 billion after the company shut dozens of underperforming stores. Billabong expanded rapidly overseas a few years ago, but a strong local currency ate into its offshore earnings, while fragile consumer confidence and the diminishing appeal of its key brands among young people crimped demand for its products.
Shares of Beach Energy climbed up 2.2% to A$1.385 after the oil explorer said it will boost spending and production this year after achieving a better than expected full year profit and lifting dividends. The company posted net profit of a$153.7 million in the 2012/13 financial year was down 6.4% from the previous year. Beach Energy blamed the fall partly on a drop in the market value of its convertible notes - bonds that can be converted into shares - which had gained in value the previous year. The company's grew underlying profit in 2012/13 rose by 15% to a record A$141 million. Managing Director Reg Nelson said he expected underlying profit to improve further as oil production increases, Australian dollar oil prices strengthens, and new gas sales contracts began. Beach Energy has forecast a rise in oil and gas production in the 2013/14 financial year of up to 16%, to between 8.7 million to 9.3 million barrels of oil equivalent.
China stocks finished higher for second day in row on confidence over domestic economic growth after China's government official comments. Meanwhile risk sentiments underpinned further after a government report showed profit growth for industrial companies accelerated last month. The benchmark Shanghai Composite index rose 7.09 points, or 0.34%, to end the day at 2103.57.
China's government has tried to reassure companies and its public about the economy's health, saying growth is stabilizing after a lengthy decline and should hit the official target of 7.5% for the year.
The National Bureau of Statistics announced on Tuesday that profits for China's industrial firms rose 11.6% YoY to 419.5 billion yuan in July, as compared 6.3% YoY growth in June. For the first seven months (January to July), industrial profit grew 11.1% to 3 trillion yuan. The data only covers companies with annual sales revenue of more than 20 million yuan. Total sales revenue rose 11% to 5.6 trillion yuan during the January to July period, compared to 11.4% growth in the first half. Gross margins fell to 5.6% for the first seven months, compared to a 5.83% increase for the first six months. Inventories of finished goods rose to 3.167 trillion yuan at the end of July, from 3.15 trillion yuan end June.
Shares of industrial companies were top gainer in Shanghai, led by China Southern, the biggest domestic carrier, gaining 3% to 2.78 yuan after reporting better than expected 19% fall net income to 344 million yuan in the six months ended in June. China Eastern Airlines Corp, the second-largest domestic carrier, surged 10% to 2.74 yuan. Shanghai Port, the operator of the world's second-busiest harbor, jumped 10% to 3.40 yuan. Shanghai Material Trading Co. surged 10% to 10.90 yuan. Shanghai Jinjiang International Hotels Development Co, the largest hotel operator, gained 5.4% to 14.70 yuan.
Hong Kong's shares have finished lower in quiet trade, as geopolitical fears including the heightened threat of an expanded Syrian conflict. The Hang Seng Index fell 0.6% to 21874.77 and the Hang Seng China Enterprises Index sank 0.86% to 9988.23.
Among the 50 HK blue chips, 9 rose and 37 fell, with two stocks remaining steady. Want Want soared 9.6% to HK$11.42 on strong interim earnings, while Wharf slipped 3.9% to HK$64 after interim earnings fell 27%, making themselves the biggest blue-chip winner and loser. Market heavyweights were mixed. China Mobile was a tick higher at HK$82.85. HSBC sank 1.2% to HK$83.1. Trading of PetroChina and Kunlung Energy were suspended at the request of the companies.
The Census and Statistics Department said on Tuesday that Hong Kong's value of total exports and imports of goods both showed year-on-year increases in July, at 10.6% and 8.3%, to HK$305.4 billion and HK$342.6 billion. For the first seven months of 2013 as a whole, the value of total exports of goods rose 4.3% over the same period in 2012 and the value of imports of goods rose 4.7%. In India, the passage of a food security bill, considered as a boon for the ruling Congress party turned out to be a nightmare for the Dalal street as key benchmark indices suffered heavy losses on concerns that the passage of the bill will further weigh on country's bleak fiscal and current account deficit situation. Weakness in global stocks and rupee hitting record low against the dollar also marred sentiment. The S&P BSE Sensex provisionally closed above the psychological 18,000 mark after falling below that level earlier during the trading session. The Sensex was provisionally down 552.73 points or 2.98%, off about 455 points from the day's high and up close to 85 points from the day's low. NTPC hit 52-week low.
The market sentiment in India was also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Monday, 26 August 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 607.43 crore on Monday, 26 August 2013, as per provisional data from the stock exchanges.
Meanwhile, the Indian rupee trimmed losses after weakening past 66 against the dollar to hit record low today, 27 August 2013. The partially convertible rupee was trading at 65.62 per dollar, sharply lower than its close of 64.30 on Monday, 26 August 2013. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit. The Indian market is expected to remain volatile for the next two trading sessions as traders roll over positions in the futures & options (F&O) segment from the near month August 2013 series to September 2013 series. The near month August 2013 derivatives contract expire on Thursday, 29 August 2013.
Elsewhere, Taiwan's Taiex declined 0.94%, South Korea's KOSPI lost 0.11%, Malaysia's KLSE Composite fell 1.23%, New Zealand's NZX50 shed 0.1% and Singapore's Strait Times fell 1.63%.Indonesia's Jakarta Composite tanked 3.71% as the rupiah dropped 0.7 percent to a four-year low. The Philippine Stock Exchange Index tumbled 4%amid protests over government spending and the Thai SET Index slumped 2.1%, extending declines from this year's peak to 20%.
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