Asia pacific share market closed mixed on Thursday, 28 April 2016, as surprise Bank of Japan policy inaction offset the positive effect of US Federal Reserve's decision to put off an interest rate rise yet again.
The Bank of Japan left its easing program alone, keeping the deposit rate at minus 0.1 per cent and its asset purchases at 80 trillion yen each year. It also pushed back the forecast date for hitting its 2 per cent inflation target. Traders had widely expected the BoJ to unveil fresh measures to shore up the world's third largest economy after this month's deadly earthquakes in southern Japan and a string of weak data.
Overnight, the Federal Reserve kept US interest rates pat and gave an ambiguous outlook on whether it might act in June. The Fed's signal that it was in no rush to raise rates. After a much-anticipated policy meeting in the United States, the Fed on Wednesday decided against hiking interest rates and stood by its stance that any further rises would be slow and small as economic growth remained relatively weak. However, its post-meeting statement suggested it was less concerned about the global economic outlook than it was at the start of the year when it cited turmoil in world markets for lowering its forecasts for rate hikes in 2016.
Among Asian bourses
Australia Market bounces 0.73%
Australian share market advanced for the first time in three sessions in row , on speculation of interest rates cut by the Reserve Bank of Australia (RBA) next week following Wednesday's surprisingly low reading on inflation. Meanwhile, buying sentiments also buoyed by stirring speculation of more merger and acquisition activity after a billion-dollar takeover bid for clothing company Pacific Brands. Most industry sectors were up, with materials and resources, energy, and retailers, and consumer goods stocks being major gainers. At close of trade, the benchmark S&P/ASX 200 added 37.70 points, or 0.73%, to 5225.40. The broader All Ordinaries added 38.50 points, or 0.73%, to 5289.40. Rising stocks outnumbered declining ones on the Australia Stock Exchange by 612 to 403 and 308 ended unchanged.
The banks and financial were mixed on concerns about a blowout in bad debts and views the banks' margins may come under pressure if they have to pass on any rate cut in full to blunt a political backlash. Westpac Banking Corp fell 0.9% to A$30.67, while ANZ Banking Group rose 0.6% to A$24.02, National Australia Bank 0.4% to A$27.01, and Commonwealth Bank 0.1% to A$73.85.
Shares of materials and energy companies went up on tracking strength on commodity prices, with BHP Billiton up 4.7% to A$20.57, Rio Tinto up 3.9% to A$50.29 and Fortescue Metals up 6.2% to A$3.25. Santos surged 2.4 per cent to A$4.65, Woodside 2 per cent to A$27.98 and Origin 3 per cent higher to A$5.46.
Nikkei tumble after BOJ inactions
The Japan share market stumbled, as risk aversion selloff triggered after the Bank of Japan disappointed by holding off on expanding monetary stimulus. Selloff pressure intensified after official data showed that consumer prices fell 0.3 per cent in March from a year earlier, the first drop in five months. All 33 TSE industry sectors were down, with Land Transportation, Electric Appliances, Iron & Steel, Pharmaceutical, Air Transportation, and Real Estate stocks being major losers. The 225-issue Nikkei average tumbled 624.44 points, or 3.61%, to close at 16666.05. The Topix index of all first-section issues ended down 43.75 points, or 3.16%, at 1340.55.
Japanese bank shares took a huge hit, with Shinsei Bank and Mitsubishi UFJ Financial Group Inc. each down 6 per cent. Kyushu Financial Group tumbled 6.6% while Fukuoka Financial Group plunged 8.3%. Nomura shares plunged 10 per cent following weak earnings results.
Manufacturing automation giant Fanuc Corp slid 9.9% after reporting disappointing earnings, while Nintendo Co fell 8.3% on weak earnings, outlook and plans to sell its majority stake in the Seattle Mariners Major League Baseball team.
China Market ends at 1-month low
Mainland China stock market declined to one-month low, with commodity-linked stocks being major losers in response to fresh regulatory trading curbs. The benchmark Shanghai Composite Index dropped 8.08 points, or 0.27%, to 2945.59. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, fell 5.34 points, or 0.17%, to 3160.58.
Material shares hammered the most among industrial groups after the Dalian Commodity Exchange said overnight it intended to strictly curb excessive speculation on coking coal futures contracts. Commodities exchanges in Dalian, Shanghai and Zhengzhou announced further measures late Tuesday, including higher fees and a reduction in night hours, adding to a raft of moves this month that have made it more expensive for investors to trade. Among the latest changes, the Dalian exchange raised trading fees for iron ore, coking coal and coke, while Shanghai said it would increase margin requirements for steel reinforcement bar and hot-rolled coil, and shorten trading hours. The Zhengzhou exchange raised trading charges and margin requirements for some commodities. Iron ore futures plunged 4.1% yesterday, extending their decline in the past four days to 8.9%. Steel reinforcement bar lost 3.2% and coking coal slid 4.6% as prices responded to the exchange moves.
Jiangxi Copper Co. and Baoshan Iron & Steel Co., which reported a decline in first-quarter net income, both slid at least 1.3%.
Hong Kong Stocks up 0.12%
The Hong Kong stock market ended higher after a volatile ride, as the disappoint over Bank of Japan (BoJ) policy inaction offset the positive effect of US Federal Reserve's decision to put off an interest rate rise yet again. The benchmark index opened up 127 points and briefly rose as much as 292 points to three-month high of 21,654 after the FOMC kept interest rate steady. But index reversed gain and fell as much as 106 points after the BOJ caught the market unexpected by keeping its bond-buying scale unchanged. The benchmark Hang Seng Index rose 26.43 points, or 0.12%, to 21388.63 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 23.45 points, or 0.26%, to 9060.93 points. Turnover increased to HK$67.8 billion from HK$54.9 billion on Wednesday.
Property counters were generally higher as the Fed maintained its interest rate unchanged. Sino Land (00083) gained 2% to HK$12.48. CK Property (01113) and Wharf (00004) put on 1% to HK$54.05 and HK$43.25.
Oil prices were on the rise after Fed's rate decision, with both Brent futures and crude prices rising 3%. PetroChina (00857) and Sinopec (00386) jumped 2% to HK$5.92 and HK$5.6. But CNOOC (00883) softened 1% to HK$9.89.
Galaxy Ent (00027) declined 3% to HK$26.9 as Goldman Sachs cut its target price to HK$30 after its reported 1Q earnings are inline. Sands China (01928) edged up 0.4% to HK$28.2.
Sensex, Nifty hit lowest closing level in more than two weeks
A disappointment from the Japanese central bank, which held off from expanding monetary stimulus, pulled global stocks lower, with Indian stocks witnessing a sharp slide. The barometer index, the S&P BSE Sensex, slumped 461.02 points or 1.77% to settle at 25,603.10. The Nifty shed 132.65 points or 1.66% to settle at 7,847.25.
Stocks of public sector firms, metal and auto companies and index heavyweights Infosys, ITC, HDFC, Reliance Industries, HDFC Bank led losses for key benchmark indices. The Sensex and the Nifty snapped a two-day winning streak.
Car major Maruti Suzuki India dropped as the Japanese yen strengthened against the dollar after the Bank of Japan surprised financial markets by keeping its main policies unchanged after the conclusion of a two-day monetary policy meeting. HCL Technologies edged lower after the financial results for the quarter ended 31 March 2016 fell below market expectations. Yes Bank moved higher on reports that a total of four foreign brokerages have raised their target price on the Yes Bank stock in the wake of the bank's impressive Q4 March 2016 earnings.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 gained 0.6% to 6789.98. South Korea's KOSPI index shed 0.72% to 2000.93. Taiwan's Taiex index sank 1.04% to 8473.87. Malaysia's KLCI shed 1% to 1674.764. Indonesia's Jakarta Composite index rose 0.1% to 4848.39. Singapore's Straits Times index eased 0.4% to 2862.30.
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