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Asia Pacific Market: Stocks mixed ahead of Greece summit

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Asia Pacific share market closed mixed after a range-bound trade on Tuesday, 07 July 2015, as investors awaited developments in the Greek debt talks. The MSCI Asia Pacific Index dropped less than 0.1% to 143.47, after gaining as much as of 0.8% earlier.

Eurozone leaders have called on Greece to make serious proposals at an emergency summit if it wants to stay in the currency union. The summit was convened after Greeks issued a stunning rejection to a eurozone-drafted bailout plan on Sunday and is seen as one of the last real chances for a deal to stop Greece crashing out of the euro.

 

In a coordinated press statement, the leaders of France and Germany called on Greece to come up with serious and credible proposals at Tuesday's summit consistent with its wish to stay in the eurozone.

French Prime Minister Manuel Valls reportedly said on French radio today, 7 July 2015, that France will do everything to ensure that Greece stays in the eurozone. He said that Greece's exit from the eurozone would threaten global economic growth and represent a significant political risk.

Eurozone leaders are holding an emergency meeting in Brussels today, 7 July 2015, on Greece's debt crisis. Greek Prime Minister Alexis Tsipras is expected to present new proposals at a Eurozone emergency summit on his country's growing debt crisis.

Christine Lagarde, the International Monetary Fund chief, yesterday, 6 July 2015, reportedly said that the agency stands ready to assist Greece. The IMF is one of Greece's three creditors, and the country missed a payment to it at the end of last month.

Among Asian bourses

Australia stocks bounce on bottom fishing

The Australian share market rebounded strongly, as investors chased for bottom fishing after two straight sessions of heavy falls in the fallout from the Greek debt situation. All ASX sectorial indices closed higher, with shares of financial, industrial, consumer discretionary and consumer staple companies being top gainers. The benchmark S&P/ASX 200 Index rebounded 106.40 points, or 1.94%, to 5581.40 points, while the broader All Ordinaries Index bounced 100.70 points, or 1.84%, 5564 points.

Shares of banks and financials were biggest gainers in the Sydney market, propelled by easing initial jitters over the Greek crisis and as the RBA decision to left the official cash rate unchanged at 2%. Australia & New Zealand Banking Group jumped 2.6% to A$3.03 and Westpac Banking Corp rose 3.9% to A$33.76. National Australia Bank added 2.2% to A$34.21 and Commonwealth Bank of Australia climbed up 1.6% to A$87.69.

Shares of civil aviation companies also benefited from the prospect of lower aviation fuel prices. Overnight on Monday US Brent oil fell 7.3%, the biggest one-day slide in four months. Qantas airline was up almost A7.9% to $3.43.

Australia's central bank kept interest rates steady at a record low 2%. The RBA Governor Glenn Stevens said in media press release that the Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices.

Nikkei rebounds 1.3%

Japanese share market rallied sharply, reclaiming more than half of its yesterday's losses, as investors snapped up oversold shares. But gains were limited on caution ahead of a hastily arranged emergency summit of the 19 eurozone countries in Brussels. The Nikkei Stock Average advanced 264.47 points, or 1.31%, to end at 20376.59 points. The Topix index of all Tokyo Stock Exchange First Section issues rebounded 1.04%, or 16.87 points, to close at 1637.22 points.

Shares of financial and export-related companies were rebounded the most in Tokyo market as bargain hunters swooped on oversold stocks, with Sony Corp bouncing up 0.9% to 451 yen and Panasonic Corp up 1.2% to 1644 yen, while Sharp Corp zoomed 2.5% to 165 yen. Likewise, financials saw strong buying interest, with heavyweight Sumitomo Mitsui Financial Group closed up 0.8% to 5461 yen and Mizuho Financial Group Inc rose 0.7% to 265 yen.

Plunge for crude-oil futures overnight mostly boosted up utility, airline, and shippers shares. The price of Brent crude oil fell 5.9%, to $US56.79 a barrel, while US oil fell 7.3% on Monday. Hokkaido Electric Power Co gained 5.8% to 1433 yen. Japan Airlines Co gained 2.2% to 4365 yen and ANA Holdings Inc jumped 3.1% to 349.30 yen. Shipper Nippon Yusen K.K. added 2.1% to 346 yen and Yamato Holdings Co climbed up 2.4% to 2450.50 yen. But, oil explorers were down due to steep pullback in crude oil prices overnight, with Inpex down 0.7% to 1354.50 yen, while Japan Petroleum Exploration Co. slipped 0.8% to 3730 yen.

Casualty insurer Tokio Marine Holdings added 2.7%, after favorable commentary from JPMorgan Securities Japan. The brokerage put the company's first-quarter estimated net profit at slightly more than 30% of its full-year forecast, crediting the low incidence of natural calamity losses, and the high probability of dividend hikes and share buybacks.

China stocks extend rout

China's stock market tumbled again, defying raft of government support measures unleashed over the weekend to calm jittery investors that has wiped an estimated $3.2 trillion off markets and threatens the world's number-two economy. The Shanghai Composite Index dropped 48.79 points, or 1.29%, to end at 3727.12. The Shenzhen Composite Index, which tracks stocks on China's second exchange, slumped 5.34%, or 109.02 points, to 1,932.83 .China's benchmark stock index has registered fourth session of the drop in past five sessions.

The Chinese government said on Sunday that the central bank would provide funds to the state-backed China Securities Finance Co. to help "protect the stability of the securities market". The China Securities Regulatory Commission (CSRC) over the weekend also announced a temporary halt to initial public offerings (IPOs). A day before, China's 21 largest brokerages said they would invest at least 120 billion yuan ($19.3 billion) in so-called "blue chip" exchange traded funds (ETFs). The latest moves followed an interest rate cut, relaxed rules on margin trading, and proposals to let the state social security funds invest in equities.

Eight of the 10 sectors in Shanghai declined, with shares of technology, telecom, drug and consumer players were hardest hit. Leshi Internet Information & Technology (Beijing) Co and East Money Information Co. both plunged by 10% daily limit. Aluminum Corp. of China tumbled 7.5%.

Energy and financials blue-chips rallied on speculation of direct buying from government-directed funds. PetroChina rose 4.2%, a fourth straight climb, while Agricultural Bank of China rose 6.7% and Bank of China both gained 10% the maximum daily limit.

Hong Kong stocks extend losses

The Hong Kong stock market ended lower in volatile trade, extending weakness for three days in a row, on tracking another sell-off in mainland China markets, with Chinese firms listed in the city being major losers. The benchmark index opened 155 points higher but reversed its trend as mainland market plunged again. The Hang Seng Index stumbled 260.97 points or 1.03% to finish at 24975.31 points. The index was down a combined 1307 points over the past three trading days. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 404.13 points, or 3.3%, to 11827.30 points. Turnover reduced to HK$172.5 billion from HK$212.7 billion on Monday.

Chinese insurers fell in tandem with the market even though industry operating data from Beijing insurer regulator show robust trend for the first five months of 2015. NCI (01336) plunged 9.8% to HK$35.9. PICC P&C (02328) slid 10% to HK$15.36. China Taiping (00966) sank 9.4% to HK$22.55.

Meanwhile, securities players were under pressure. CC Securities (01375) dived 9.6% to HK$4.24 despite the company issued positive profit alert. Haitong Int'l (00665) and CITIC Sec (06030) crashed 13% to HK$4.54 and HK$21.1 respectively.

Sensex takes breather, ends marginally down

Indian stock market closed marginally lower in range-bound trade, on profit booking, with shares of oil exploration and production companies led losses. The barometer index, the S&P BSE Sensex, was provisionally off 22.17 points or 0.08% at 28,186.59.

Shares of oil exploration and production companies dropped after steep slide in global crude oil prices overnight. Shares of Coal India scaled record high. Index heavyweight and housing finance major HDFC advanced. Power generation stocks were mixed.

Foreign portfolio investors (FPIs) bought Indian shares worth a net Rs 149.37 crore yesterday, 6 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 409.66 crore yesterday, 6 July 2015, as per provisional data released by the stock exchanges.

Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.1% to 9250.16. South Korea's KOSPI lost 0.7% to 2040.29. New Zealand's NZX50 jumped 0.5% to 5803.17. Singapore's Straits Times index rebounded 0.2% at 3340.93. Indonesia's Jakarta Composite index fell 0.2% to 4906.05. Malaysia's KLCI lost 0.3% to 1712.30.

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First Published: Jul 07 2015 | 5:05 PM IST

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