Headline equities of the Asia Pacific market closed down on Monday, 15 December 2014, as risk aversion selloff triggered by tracking US losses at the end of last week. Meanwhile, concerns about China economic slowdown and impact of falling crude oil prices globally also weighed on sentiments.
Falling crude oil prices and weak leads from Wall Street and European markets on Friday triggered a sharp fall to the regional share market.
The crude oil prices dropped steeply on Friday after the International Energy Agency said that global demand will grow less than previously forecast next year. On Monday, benchmark U.S. crude was up 38 cents at $58.20 a barrel in electronic trading on the New York Mercantile Exchange. Crude oil prices declined nearly 47% from its peak of $107 in June this year. Lower oil prices should be positive for many countries but there are also worries the recent plunge is a sign of a sickly global economy.
Also, deepening concerns about economic slowdown in the world second largest economy weighed down sentiments. Researchers led by Ma Jun, chief economist with the Research Bureau of the Central Bank said in the report entitled 2015 Chinese economy forecast that China's real GDP growth will likely slow down from 7.4% this year to 7.1% in 2015.
Japan's ruling coalition won a convincing victory in lower house elections Sunday, giving Prime Minister Shinzo Abe's Liberal Democrats up to four more years to pursue economic and political reforms. But the "tankan" business survey released Monday highlighted challenges facing Abe's government which is using lavish monetary and fiscal stimulus to end two decades of economic stagnation. More than two-thirds of the large and medium-sized companies surveyed said they viewed the outlook for the coming quarter as "not so favorable."
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Among Asian bourses
Nikkei falls 1.57% after tankan data
Japanese stock market closed down, as risk sentiments dented by tracking weak offshore cues and weaker than expected Bank of Japan's quarterly tankan data. The benchmark Nikkei Stock Average dropped 1.57% to 17099.40.
The Bank of Japan's closely watched quarterly "tankan" survey showed that the sentiment index for the large manufacturers edged down to plus 12 from the plus 13 level recorded in September.
The broader market wasn't greatly affected by Sunday's parliamentary lower house election results, in which the ruling coalition secured a decisive win, as the results were well within expectations. The strong performance by Mr. Abe's Liberal Democratic Party on Sunday gives him up to four more years of control over the levers of government and management of the country's fiscal situation. In post-election interviews, Mr. Abe made it clear he is keen to see companies raise wages during annual negotiations next spring.
All but two of the 33 Topix industry groups retreated, with carmakers and insurers leading losses. Toyota Motor Corp fell 2.5% to 7311 yen. Mazda Motor Corp. dropped 4.6% to 2,910 yen. Anicom Holdings Inc. lost 3.3% to 1,417 yen, leading insurers lower. Japan Airlines Co. slipped 3.4% o 3,755 yen after the carrier's rating was lowered to neutral at UBS.
Shares of some domestic-demand companies rose on speculation that some kind of supplementary budget will be drafted to help jump start the nation's economy, currently in recession. Construction firms, traditionally the beneficiaries of such legislation, saw some bids, with Taisei Corp. adding 0.6% and Shimizu Corp. gaining 0.7%. Other domestic-demand oriented shares also found favor, with convenience-store operator Lawson up 1.8% and shoe retailer ABC-Mart rising 0.4%.
Aussie market falls as miners plunge
Australian share market closed down, extending last week downfall, on tracking weak offshore cues and drop in commodity prices. The benchmark S&P/ASX 200 index declined 33.50 points, or 0.64%, to close at 5186.10, while the broader All Ordinaries index lost 32.30 points, or 0.62%, to 5164.60. Market turnover was relatively moderate, with 1.31 billion shares changed hands worth of A$3.86 billion. Total of 411 stocks were up, while 884 were down.
Shares on mining companies extended losses due to weak Chinese economic data out late last week and J.P. Morgan cut its 2015 price forecast for the mineral by 24%. Among the iron plays, Arrium lost 3.1% to A$0.16, Fortescue Metals Group gave up 2.5% to A$248, and Mt. Gibson Iron tumbled 4.6% to A$0.21.BC Iron was 2.7% lower to A$0.36 as UBS slashed its price target on the name by 73%. Meanwhile, gold miner Evolution Mining was 3.5% weaker to A$0.56 after announcing additional price hedges and a refinancing of some of its debt.
BHP Billiton fell 0.5% to A$28.33, with RBC Capital Markets cutting its rating on the shares to underperform from sector-perform and questioning the wisdom behind BHP's spin-off of some of its assets.
Shanghai Composite rises 0.52% on easing speculation
Mainland China share market closed higher in volatile trading, amidst growing speculation the government will take more steps to support economic growth. The benchmark Shanghai Composite advanced 0.52% to close at 2953.42, after falling as much as 1.6% during the day.
Chinese stocks slumped earlier as impending new equity sales drove up money-market rates and concern grew an economic slowdown will deepen. China's new share sales are scheduled for next week and subscriptions are likely to lock up as much as 3 trillion yuan. China's real GDP growth will likely slow down from 7.4% this year to 7.1% in 2015%, said Ma Jun, chief economist at the People's Bank of China.
But, investors resumed bargain buying after China Securities Journal reported that the Chinese government may ease policies with cuts in reserve ratios or interest rates as recent economic growth is weak.
Shares of industrial companies climbed the most in Shanghai market, with China Communications Construction Co. surging 10%, while Guangshen Railway Co. increased 7.7% on demand optimism after Premier Li signed cooperation agreements worth $14 billion with Kazakhstan Prime Minister Karim Massimov.
Hang Seng drops as PBOC report tips slower growth
Hong Kong share market closed lower, as risk sentiments undermined by tracking US losses at the end of last week and deepening concerns about China economic slowdown. The Hang Seng Index ended lower 221.35 points, or 0.95%, to 23027.85, off an intra-day high of 23067.67 and low of 22856.02. Turnover decreased to HK$68.61 billion from HK$76.89 billion on Friday.
Banks were substantially weaker, with Bank of Communications Co 1.7% to HK$6.57, shrugging off news that the state-owned bank planned to issue 80 billion yuan worth of preferred shares in both domestic and overseas markets. China Merchants Bank Co gave up 1.9% to HK$16.80, and Bank of China lost 0.5% to HK$4.09.
Energy stocks rebounded on hopes for consumption increment after the NDRC lowered prices for oil products. PetroChina (00857) rebounded 2% to HK$8.25. CNOOC (00883) also nudged up 0.8% to HK$10.14. Kunlun Energy (00135) edged up 0.4% to HK$7.15. Sinopec (00386) was flat at HK$6.03.
China Unicom (00762) slid 4% to HK$10.2 on reports that an executive of the company was under investigation for alleged severe discipline violation.
Sensex, Nifty falls
Indian stock market closed marginally down after earlier hitting their lowest levels in one and half months as software services providers fell after Tata Consultancy Services' tepid comments on its outlook, while other blue-chips were hit by global risk aversion. The BSE Sensex provisionally closed 0.11% lower to 27319.56, while the Nifty down 0.05% to 8219.60.
The latest economic data showed that the rate of Indian inflation based on the wholesale price index (WPI) stood at zero in November 2014, compared with WPI of 1.77% in October 2014. Build up inflation rate in the financial year so far was 0.67%, compared to a buildup rate of 6.70% in the corresponding period of the previous year. The government announced the WPI inflation data during trading hours today, 15 December 2014.
The data comes close on the heels of another data showing a further easing of consumer price inflation last month. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 4.4% in November 2014 from 5.5% in October 2014, driven by a sharp decline in inflation for food articles. The corresponding provisional inflation rates for rural area were 4.1% and urban area also 4.7% as against 5.5% and 5.6% for October 2014.
Index of industrial production (IIP) declined, at a sharpest pace in three-years, contracting 4.2% in October 2014 compared with 2.8% (revised) increase in September 2014. The manufacturing sector's output dipped to 2.5% in October 2014, recording largest decline in last five-and-half years. The decline in the industrial production was entirely contributed by the manufacturing sector. Lesser number of working days in October 2014 mainly led to sharp decline in manufacturing sectors output.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index declined 0.46% to 8985.63. South Korea KOSPI was down 0.07% to 1920.36. New Zealand's NZX50 fell 0.3% at 5499. Singapore's Straits Times index fell 0.9% at 3294.14. Indonesia's Jakarta Composite index dropped 1% to 5108.43. Malaysia's KLCI dropped 2.1% to 1697.31.
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