Headline equities of the Asia Pacific market closed mostly higher after recouping early losses late afternoon on Wednesday, 12 April 2017, as investors shifted toward riskier assets, with resources shares being major gainers on reports that Saudi Arabia was lobbying oil producers to extend an output cut.
Brent oil extended gains into an eighth straight session on Wednesday, having recovered nearly all last month's losses, after Saudi Arabia was said to be pushing its fellow OPEC members and some rivals to prolong supply cuts beyond June.
However, the rising geopolitical woes curbed gains as investors' mood was risk adverse on fears about growing tensions in the Middle East and on the Korean peninsula. Traders were subdued as they watched developments following last week's US strike on Syria and intensifying sabre-rattling by the United States and North Korea. On Tuesday, US President Donald Trump warned that Washington was prepared to "solve the problem" of North Korea on its own if necessary as he and Pyongyang engaged in tit-for-tat comments that sent tensions soaring.
Trump's warning came as a US naval strike group headed towards the Korean peninsula, a show of force that prompted the nuclear-armed North to declare it was "ready to react to any mode of war desired by the US".
North Korean state media warned of a nuclear attack on the United States at any sign of American aggression, as a U.S. Navy strike group steamed toward the western Pacific.
Meanwhile, US Secretary of State Rex Tillerson flew to Moscow on Tuesday to confront the Kremlin about its support for the government of Bashar al-Assad, amid US statements that Russia tried to cover up a chemical attack.
Among Asian bourses
Australia Shares hit fresh two-year high
Australian equity market finished session above the neutral line fourth straight session, thanks to modest strength in resources stocks and further gains in major banks, which helped to offset a slump in Telstra after a rival communications company unveiled plans to build a rival mobile network in the country. At the close, the benchmark SS&P/ASX 200 edged up 4.7 points, or 0.1%, to 5934.0--its highest close since late April 2015.
Financials extended gain, with all four big four banks closed in positive territory, led by a 1% gain by Australia & New Zealand Banking. Commonwealth Bank of Australia added 0.7%, National Australia Bank rose 0.6% and Westpac banking picked up 0.2%.
Shares of energy sector inclined as crude oil prices gained on expectations that major producers will curb more of their production, helped lift the energy sector. Woodside Petroleum was up 0.3% and Oil Search ahead by 0.8%.
Material stocks were mixed. Among the miners, BHP Billiton and Rio Tinto fell 0.4% and 0.2%, respectively, but Newcrest Mining was 1.6% higher as gold producers benefited from a rise in gold prices to fresh five-month highs in Asian trading amid geopolitical concerns.
Telstra dropped 7.5%, the biggest single drag on the ASX 200, after TPG Telecom said it had acquired mobile spectrum and planned to roll out a network that would challenge the incumbent operators.
Japan Stocks fall on stronger yen, geopolitical tensions
The Japan share market finished session steep down, with investor sentiment dragged down by the yen's rise against the dollar amid growing geopolitical tensions. Stocks met with selling almost across the board from the outset of Wednesday's trading, after U.S. equities fell overnight with investors' risk appetite dissipated by U.S. President Donald Trump's tweet suggesting the possibilities of a unilateral action against North Korea and an additional strike against Syria. The 225-issue Nikkei average dived 195.26 points, or 1.04%, to close at 18,552.61, hitting its lowest finish since Dec. 7 last year. The TOPIX index of all first-section issues ended down 15.56 points, or 1.04%, at 1,479.54, after falling 4.55 points the previous day.
Exporter-led issues dented by the yen's continued strength against the US dollar. The dollar was trading below 110 yen for the first time since November, changing hands at 109.50 yen Wednesday morning against 109.65 yen in New York on Tuesday afternoon and 110.66 yen in Tokyo earlier. A stronger yen is seen as a negative for Japan's exporters as it can dent their profitability by reducing the value of overseas earnings.
On the economic news front- Japan Mar Producer Prices up 1.4% : The monthly corporate goods price index (CGPI) from the Bank of Japan released on Wednesday, showing the index of domestic producer prices rose 1.4% on year in March, the third consecutive gain. The CGPI rose a revised 1.1% in February and 0.5% in January, which was the first rise in 22 months. On month, the CGPI rose 0.2% in March, the fifth straight rise after a revised +0.3% in February. Japan's CGPI was down 2.3% on year in fiscal 2016, compared with a drop of 3.2% in fiscal 2015.
China Stocks fall on profit booking, softer PPI data
The Mainland China equity market closed lower, as investors elected to book recent gains after softer producer inflation data raised questions on the sustainability of the country's economic recovery and some shares that had rallied on plans for a new economic zone lost steam. The Shanghai Composite Index dropped 0.5% to 3,273.8 while the CSI 300, which tracks large companies listed in Shanghai and Shenzhen, was down 0.2% to 3,509.4. The Shenzhen Component index lost 0.6% to 10,587.3 while the Nasdaq-style ChiNext was down 1.1% to 1,897.5.
China's producer price inflation (PPI) cooled for the first time in seven months in March as iron ore and coal prices tumbled, pressured by fears that the country's steel production is outweighing demand and threatening a glut of the metal this year. The Producer Price Index, which measures costs for goods at the factory gate, rose 7.6%, 0.2 percentage points slower than February's 7.8%, which was a eight-year record.
Meanwhile, consumer inflation warmed up slightly in March. The Consumer Price Index, a main gauge of inflation, rose 0.9% year on year in March, 0.1 percentage points higher than February, the National Bureau of Statistics said today.
Defence stocks continued to rise, while investors cheered news that Hong Kong chief executive Leung Chun-ying will start his three-day visit next week in Guangdong province to study the performance of the Guangdong-Hong Kong-Macau Bay Area. Most of the shares related to that area rose. Shenzhen Yan Tian Port Holding surged 10% to 10.98 yuan. Shenzhen Chiwan Wharf Holdings, Guangdong Shirongzhaoye and Zhuhai Port Co all climbed by the maximum daily 10% limit.
Most listed lenders sagged after the banking regulator told lenders to conduct "self-inspections" in areas such as using loopholes to circumvent rules, in order to reduce leverage. The move will potentially hurt banks' balance sheet.
Stocks related to Xiongan New Area were mixed. Tianjin Port closed 10% lower while cement maker BBMG Corp continued its winning streak to end 10% up for a sixth consecutive day.
Hong Kong Stocks gain as concerns over North Korea abate
The Hong Kong stock market closed session higher after recouping losses during late afternoon trade, on easing concerns about geopolitical tensions in North Korea after China's President reportedly called for a peaceful resolution of the North Korean security crisis in a phone call to his American counterpart Donald Trump on Wednesday. The benchmark index opened down 19 points at 24,068. It fell as much as 94 points to an intra-day low of 23,994. But buying orders of market heavyweights help push the market higher in afternoon session. The Hang Seng Index ended up 225 points or 0.9% to 24,313. The H-share index rose 42 points or 0.4% to 10,208. Turnover decreased to HK$71.8 billion from HK$76.8 billion on Tuesday.
Tencent Holdings, the most traded blue chip, surged 2.7 per cent to close at a new high of HK$231. China Construction Bank surged 0.5 per cent to HK$6.2 and HSBC Holdings gained 0.8 per cent to HK$64.2, its best level since mid March. Geely Automobile Holdings was the best performer among blue chips, rising 3.7 per cent to HK$10.7.
Chinese Premier Li Keqiang said the central government in 2017 would study and set up development plan for the Guangdong-Hong Kong-Macau Greater Bay Area. Zhuhai Holdings Investment (00908) surged 9.3% to HK$1.29. Chu Kong Shipping (00560) climbed 3.5% to HK$2.07. Shenzhen International (00152) soared 4.2% to HK$13. Shenzhen Investment (00604) surged 7.9% to HK$3.71.
Sensex, Nifty close with modest losses
Indian benchmark indices suffered modest losses amid volatile session of trade ahead of the release of key domestic economic data later in the day. The barometer index, the S&P BSE Sensex, fell 144.87 points or 0.49% to settle at 29,643.48. The Nifty 50 index shed 33.55 points or 0.36% to settle at 9,203.45.
Stocks of public sector banks declined. Stocks of private sector banks were mixed. Shares of power generation and power distribution companies edged lower. IT major Infosys edged higher ahead of its Q4 March 2017 results tomorrow, 13 April 2017. Vedanta and Cairn India advanced after Vedanta and Cairn India announced that the merger of Cairn India with Vedanta pursuant to the scheme of arrangement has become effective.
Tata Power Company rose 0.06% in volatile trade after the company announced that the Supreme Court on Tuesday, 11 April 2017, conveyed its judgment on the Compensatory Tariff mailer on the Mundra Ultra Mega Power Projects (UMPP). The announcement was made after market hours yesterday, 11 April 2017.
Wipro declined 1.76%. The company said it has completed the acquisition of Brazilian IT service provider InfoSERVER. The impact of the buyout will reflect in the financials of the company from the Q1 June 2017, it added. In January this year, Wipro signed an agreement to acquire InfoSERVER, an IT service provider focused on the Brazilian market for $8.7 million. The announcement was made after market hours yesterday, 11 April 2017.
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