Asia Pacific share market ended mostly higher on Thursday, 30 July 2015, echoing gains in the U.S. stocks in overnight trading after market-friendly comments from the U.S. central bank. The MSCI Asia Pacific Index climbed 0.1% to 140.94.
Investors showed renewed confidence after the U.S. Federal Reserve Bank indicated it was inclined to raise its interest rate if the economy continues to pick up but gave no hint of an imminent tightening in monetary policy, helping overnight Wall Street shares to gain ground.
The Federal Open Market Committee painted a strong picture of the U.S. labor market at the conclusion of its two-day policy-setting meeting. The central bank said job gains have been solid, noted how unemployment had declined and upgraded its assessment of the slack in the labor market.
Even though the Fed didn't send a clear signal for timing on a rate increase, keeping a September timeline open for the Fed's first interest-rate increase in more than nine years. The Fed said it only needs to see some further improvement in the labor market to raise interest rates.
The Fed's ultra-loose monetary policy following the 2008 financial crisis has sent prices of many stocks and bonds to elevated levels, raising concerns whether financial assets could hold up once the Fed starts raising interest rates for the first time in nearly a decade.
While uncertainty around the timing of the first rate increase could prompt stock swings, many investors say the market should be able to withstand the first few moves as the overall level of rates is expected to remain low.
Among Asian bourses
Energy, mining stocks lead Australia market rally
The Australian share market enjoyed a strong rally for second straight day, with most of sectors finishing in the green, led by energy and materials on the back of a surge in the crude oil iron ore price overnight. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both advanced by 0.8% to 5669.50 and 5653.10, respectively. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, declined 3.7% to 15.11, suggesting a 4.4% swing in the equity benchmark index in the next 30 days.
Shares of energy companies enjoyed a strong gains after the price of oil jumped overnight after a unexpected weekly fall in US crude oil inventories. Oil Search rose 2.2% to A$7.47. Santos gained 4.2% to A$7.43 and Woodside Petroleum added 2.1% to A$35.68.
Materials stocks rallied on tracking strength in iron ore prices, with BHP Billiton and Rio Tinto both up 2.4% to A$26.50 and A$53, respectively. Fortescue Metals Group added 0.8% to A$1.895.
Healthcare sector underperformed the broader market as number of big companies caught by selling pressure following strong recent run. CSL declined 1.4% to A$96.35 on profit taking after yesterday hitting a fresh 52-week high of A$97.95. ResMed Inc dropped 1.6% to A$7.52, as Morgans downward revision of price target on the stock by 11% to A$8.63 impacted the market's confidence. Sirtex Medical has also shed 1.7% to A$30.37 after Morgans slapping the company with an unfavourable price target.
Australian Bureau of Statistics figures on building approvals the number of dwellings approved fell 1.2% in June 2015. The value of total building approved fell 0.9% in June, in trend terms, and has fallen for four months. The value of residential building fell 1.0% while non-residential building fell 0.6% in trend terms.
Nikkei jumps on weaker yen
Japanese share market rallied, echoing gains in the U.S. stocks in overnight trading after market-friendly comments from the U.S. central bank. Meanwhile, risk sentiments. boosted up further from yen depreciation against greenback and solid quarterly earnings results from blue chip companies. The Nikkei Stock Average advanced 219.92 points, or 1.08%, to end at 20522.83 points. The broader Topix index ended 0.81%, or 13.27 points, higher at 1647.21 points.
Investors focused on earnings results from key Japanese corporates. Several companies reported business results after the Wednesday market close and more than 500 Japanese companies to report earnings on Thursday and Friday. Of the 406 to report so far, 59% have exceeded profit expectations, an improvement from the 48% that beat forecasts in the previous quarter.
Industrial Production in June increased 0.8% from the previous month, showing increase for the first time in two months, according to data released on Thursday by the Ministry of Economy, Trade and Industry. Industrial-production showed increase of 2% from the previous year. The index in June was 98.0 (seasonally adjusted). Industries that mainly contributed to the increase are Transport equipment, Chemicals (excl. Drugs), and Plastic products. According to the Survey of Industrial Production Forecast in Manufacturing, Production is expected to increase 0.5% in July and increase 2.7% in August. Industries that mainly contributed to the increase in July are Chemicals, General-purpose, production and business oriented machinery, and Others. Industries that mainly contributed to the increase in August are Electronic parts and devices, General-purpose, production and business oriented machinery, and Information and communication electronics equipment.
Showa Shell Sekiyu KK jumped 6.2% after reports that energy explorer Idemitsu Kosan Co. agreed to acquire shares from Royal Dutch Shell Plc. The move would allow Idemitsu to become the largest shareholder in the oil importer, paving the way for a potential merger of the two firms. Idemitsu shares closed 4% lower.
Nintendo jumped 8.3%, after announcing better than expected quarterly results. the game maker reported net income of 8.28 billion yen for the quarter ended June 2015, a turnaround from a loss of 9.9 billion a year earlier period, aided by a 10.8 billion yen windfall the company recorded from the weaker currency.
Panasonic Corp. tumbled 5.8% as the electronics maker's profit missed estimates. The company posted 7% dip in quarterly profit to 76.6 billion yen, citing lower demand in the Japanese housing market for solar panels.
China market tumbles 2.2%
A selloff in late afternoon trade dragged the Mainland China's stock market deeply into red. The panic selling triggered after China Securities Journal reported that Chinese banks had been checking their exposure to the stock market through wealth management products and loans collateralized with stocks. The benchmark Shanghai Composite Index ended 83.40 points, or 2.2%, down at 3705.77 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, tanked 3.21%, or 70.66 points, to 2128.16 points. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, dropped 115 points, or 2.93%, to 3815.41
Shares of drug makers and technology companies declined the most among 10 industry group in Beijing. Lepu Medical Technology Co. plunged 8.3%, while Hualan Biological Engineering Inc. slid 5.2%. Leshi Internet Information & Technology (Beijing) Co. and East Money Information Co., the largest companies in the ChiNext, both fell more than 2%.
Hong Kong market ends 0.5% down
The Hong Kong stock market closed down, as risk aversion selloff triggered on tracking weaker tone in Mainland A-share market. Traders largely shrugged off strength in regional markets after the U.S. Federal Reserve painted a relatively bright picture of the world's largest economy. The benchmark opened 202 points higher in tandem with rally of overseas markets, but reversed its trend on the weaker tone of mainland market. The Hang Seng Index ended 121.47 points, or 0.49%, lower at 24497.98 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, decreased 136.36 points, or 1.21%, to 11137.33 points. Turnover reduced slightly to HK$80.2 billion from HK$86 billion on Wednesday.
HK listed Chinese insurers were down. China Life (02628) ended down 2.5% to HK$28.9 despite it issued positive profit alert. Ping An (02318) declined 1.7% to HK$44.75 after Deutsche Bank lowered its target price.
Oil explorers stocks jumped after crude oil prices rebounded from its 6-month low overnight. Kunlun Energy (00135) bounced 2.6% to HK$7.28. CNOOC (00883) edged up 0.6% to HK$9.72. PetroChina (00857) and Sinopec (00386) softened less than 1% to HK$5.89 and HK$7.79.
Sensex drifts up as cabinet approves amendments to GST bill
Indian stock market ended higher, as market sentiment was boosted by news reports that the Union Cabinet has approved amendments to the goods and services tax (GST) bill to compensate states for revenue loss for five years on introduction of the uniform nationwide indirect tax regime, as has been suggested by Rajya Sabha Select Committee. The barometer index, the S&P BSE Sensex, provisionally rose 191.97 points or 0.7% to 27,755.40.
Crompton Greaves (CG) rose 2.61% to Rs 182.90. The company announced during trading hours that it has won an important contract to supply ZIV single phase smart meters to Energias de Portugal (EDP), one of the major European operators in the energy sector. This follows another major order awarded by EDP, selecting CG as the main supplier for data concentrators.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 1% to 8651.49. South Korea's KOSPI was down 0.9% to 20192. New Zealand's NZX50 rose 0.4% to 5891.85. Singapore's Straits Times index lost 2.2% at 3249.52. Indonesia's Jakarta Composite index lost 0.2% to 4712.49. Malaysia's KLCI rose 0.1% to 1699.92.
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