Headline equities of the Asia Pacific market closed mixed on Monday, 18 May 2015, after weak data from the U.S. and China clouded the outlook for the global economy. Uncertainty over Greece's financial crisis and future in the euro zone also left investors sentiments cautious.
Among Asian bourses
Australia market falls 1.33%
The Australian share market closed steep lower, pulled down by profit booking across the board, with shares of materials and financials companies being major losers. The benchmark S&P/ASX 200 Index dropped 76.30 points, or 1.33%, to 5659.20, while the broader All Ordinaries Index lost 70 points, or 1.22%, to 5660. Market turnover was relatively strong, with 1.9 billion shares changing hands worth of A$4.76 billion.
Banks and financial stocks were biggest drag on the Sydney market, weighed down by following continued pressure in the bond markets. The Aussie 10-year bond is off 0.6 of a%age point. That's forcing down yield stocks like the banks. Commonwealth Bank of Australia declined 2.1% to A$83, ANZ Banking Group 2.5% to A$32.28, Westpac Banking Corp 2.5% to A$32.22, and National Australia Bank 1.5% to A$34. Investment bank Macquarie Group sank 3.7% to A$79.51 as the stock traded ex-dividend.
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Materials and resources stocks declined, with BHP Billiton down 7.3% to A$30.13, as investors priced the removal of the company's non-core assets, which were set to debut on the exchange as a new company South32. Rio Tinto lost 1.1% to A$57.45 amid speculation it will try again to sell a cluster of Australasian aluminium assets, with reports in London speculating the miner could yield more than $US1 billion for the assets. Fortescue metal closed steady at A$2.29.
Shares in South32, the new global miner spun off by BHP Billiton, closed at A$2.05 after hitting an intraday high of A$2.22 on debut on the Australian Securities Exchange on Monday. BHP announced plans last August to set up South32 to house unwanted operations including coal mines and aluminium smelters. That proposal was overwhelmingly backed by shareholders earlier this month.
Pharmaxis shares soared by 51.5% to A$0.25 after the company sold its drug candidate for liver disease to pharmaceutical giant Boehringer Ingelheim in a deal that could be worth up to A$750 million, if the drug is successful.
Shares of DuluxGroup shares fell 5.5% to A$6.19 after paint maker has reported a 17.5% drop in interim profit to A$49.5 million after booking restructuring and investment costs associated with its new Melbourne factory and supply chain changes.
Nikkei jumps after machinery order data
Japanese share market closed higher, buoyed by moderately weaker yen against the greenback and better than expected Japanese core machinery orders for March. But, gain on the upside was limited on caution ahead of Japanese gross domestic product figures for January-March on Wednesday and a Bank of Japan policy setting meeting set to conclude Friday. The benchmark Nikkei 225 index advanced 157.35 points, or 0.8%, to finish at 19890.27. The broader Topix index of all first-section shares ended up 19.55 points, or 1.22%, up at 1626.66.
The Cabinet Office said on Monday Japanese core machinery orders rose 2.9% in March from the previous month. The rise on a seasonally adjusted basis came after a 1.4% decline in February. Machinery orders are widely regarded as a leading indicator of corporate capital investment. The Cabinet Office expects orders likely to fall 7.4% from the previous quarter for the April to June period.
Shares of Nippon Telegraph & Telephone Corp were up 1.6% to 8410 yen after Japan's top fixed-line telecom posted a decline in fiscal-year profit but said it saw earnings-per-share jumping by close to 50% during the current fiscal year ending in March 2016.
Honda Motor Co advanced 1.4% to 4236.50 yen after its launch of a new compact wagon called the Shuttle. The gasoline-powered version of SHUTTLE is equipped with a 1.5-liter direct-injection DOHC i-VTEC engine, while the hybrid version is equipped with the SPORT HYBRID i-DCD, Honda's hybrid system that realizes excellent environmental performance and sporty driving performance. Price ranges from 1.69 million yen to 2.38 million yen.
Takeda Pharmaceutical dropped 2.6% to A$6067 yen after the Japan's top drugmaker on Friday reported an annual loss for the first time in its history after agreeing to pay $2.4 billion to settle U.S. lawsuits over cancer claims regarding its Actos diabetes drug. Osaka-based Takeda Pharmaceutical said its net loss for the fiscal year to March was 145.78 billion yen ($1.22 billion) as it took huge charges to settle the claims, reversing a year earlier profit and marking its only loss since becoming a publicly listed company in 1949. But revenue grew 5.1% to 1.78 trillion yen, helped by a weaker yen as well as higher-than expected sales of gout and myeloma cancer drugs. The firm said it expects to swing to a 68 billion yen profit this year.
Shares of Sharp Corp stumbled 9.1% to 169 yen after ratings agency Standard & Poor's has downgraded Japanese electronics maker Sharp's credit rating by two notches to CCC-, citing the firm's decision to accept a bank bailout. The downgrade came after the troubled firm announced it was taking a multi-billion-dollar bailout and laying off about 10% of its 49,000-strong global workforce to deal with huge losses. The embattled Aquos-brand maker said Thursday it posted a bigger-than-expected $1.86 billion annual loss for the year to March.
Shanghai Composite falls 0.6% ahead of IPOs
Mainland China equity market closed lower for second straight session, amid concerns over new share listings this week and as data showed further declines in China's house prices. The Shanghai Composite Index declined 25.20 points, or 0.58%, to finish at 4283.49 points. The CSI300 index reduced by 42.33 points, or 0.92%, to 4575.14.
Big-cap stocks were under pressure as pressure as 20 initial public offerings (IPOs) scheduled to launch this week that could lock-up nearly 3 trillion yuan worth of subscription capital, as regulators move to accelerate IPO approvals. Tuesday will be the busiest day of the week for IPOs, with 12 companies starting to take subscriptions. That means some investors need to sell existing shares for cash to participate in IPO subscriptions.
The National Bureau of Statistics said on Monday that average price of new homes in 70 Chinese cities fell at a slower month-over-month pace in April. Home prices fell 0.12% in April from March, slowing from the 0.16% decline recorded in March. On a year-over-year basis however, the decline in home prices continued to widen in April for the eighth straight month, falling 6.3% from March's 6.1% drop. Private-sector home prices fell in 48 out of the 70 cities in April on a month-over-month basis, compared with March's 50. On a year-over-year basis, home prices fell in 69 out of the 70 cities in April, down from all 70 cities that posted declines in March.
Shares of property counters were down after fresh data pictured China's all-important property sector remaining in a slump, with China Vanke and Poly Real Estate both down 2.3 and 3.4%, respectively, while Gemdale closed down 1.6%.
Shares of material and energy companies in also lower. China Minmetals Rare Earth Co. tumbled 6.2%. China Shenhua Energy Co., the biggest coal producer, slid 2.8%. Aluminum Corporation of China sank 8.7%, after the company said Beijing's plan to consolidate the rare earth industry involves only its parent, not the listed unit.
Brokerage houses also came under selling pressure, with China Merchants Securities led losses with a plunge of 6.5%, while Founder Securities and Citic Securities sagged more than 3%, respectively.
Hang Seng drops 0.83%
The Hong Kong stock market closed lower, on profit taking after Friday's 536 points rally on talks of upcoming launch of Shenzhen-HK Connect scheme. The Hang Seng Index ended down 231.03 points or 0.83% to 27,591.25, off an intra-day high of 27,792.44 and day low of 27,435.57. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 0.6%, or 83.48 points, to 13926.28 points. Turnover reduced to HK$122.99 billion from HK$137.8 billion on Friday.
Shares of telecom players declined after three major Chinese telecom carriers have promised to launch new initiatives to lower telecom charges. China Mobile (00941) dipped 2.8% to HK$105.9. Both China Unicom (00762) and China Telecom (00728) fell 2.3% to HK$13.8 and HK$5.6, respectively.
Consumer staples bucked the trend. Want Want (00151) put on 1.6% to HK$8.45 as the company has kept repurchasing its own shares over the past few trading days. Mengniu Dairy (02319) gained 0.7% to HK$41.74. Intime Retail (01833) soared 20% to HK$15.3 after the company announced that Zhang Yong will take over the chairmanship from Shen Guojun, who will retire.
Shares of real-estate firms declined after official data showed that China's new home prices fell in 48 of 70 top cities during April. Evergrande Real Estate Group fell 3.9% to HK$6.59, China Vanke Co 0.9% to HK$19.34, China Resources Land 2.6% to HK$24.35, China Overseas Land & Investment 2.5% to HK$28.70, and Country Garden Holdings Co 1.5% to HK$3.94.
Banks and financials were down after report by the Economic Observer stated the Chinese central bank planned to allow several banks to issue large-denomination certificates of deposite (CDs) on a trial basis in order to make the state-dominated banking sector more competitive. With the grip relaxed on the issuance of CDs, the central bank may be only one step away from the complete liberalization of interest rates, the report said. Among major lenders, China Minsheng Banking Corp declined 2.5% to HK$10.74, Bank of Communications Co 0.5% to HK$7.59 and China Citic Bank Corp 1.1% to HK$6.60.
Software developer Kingdee International Software Group climbed 10.6% to HK$5.51 after announcing a plan to allot up to 290 million new shares at a discount of about 10% to its previous closing price.
Sensex, Nifty hit highest level in more than 3 weeks
Oil and cement stocks led rally as key benchmark indices surged on the first trading session of the week. Index heavyweights HDFC, ITC, Infosys, HDFC Bank, Reliance Industries and L&T edged higher. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty hit their highest level in more than three weeks as these two key benchmark indices extended intraday gains in late trade. The Sensex was provisionally up 339.55 points or 1.24% at 27,663.55. The CNX Nifty was up 111.30 points or 1.35% at 8,373.65 as per provisional closing.
The market sentiment was boosted by a statement from the Finance Ministry which stated that the government has managed to better its target for containing the fiscal and revenue deficits in the last financial year.
Foreign portfolio investors sold shares worth a net Rs 38.31 crore during the previous trading session on Friday, 15 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 563.60 crore on Friday, 15 May 2015, as per provisional data released by the stock exchanges.
Nestle India was up 0.69% at Rs 7,061. The stock hit a high of Rs 7,327 and a low of Rs 6,945. The company's net profit rose 23.58% to Rs 320.28 crore on 8.05% rise in total income to Rs 2541.95 crore in Q1 March 2015 over Q1 March 2014. The Q1 result was announced after market hours on Friday, 15 May 2015. Nestle India said that the impact of declining prices of fresh milk and derivatives compared to the increasing trend in previous year was mostly negated by the opening stock of finished goods that was manufactured when fresh milk prices were relatively higher. However, cost of materials consumed as%age of net sales has decreased largely due to selling price increases, including carry over pricing.
Asian Paints fell 3.05% to Rs 765.90. The stock hit a high of Rs 818 and a low of Rs 763 during the day. The company's consolidated net profit rose 18.6% to Rs 341 crore on 6.9% growth in income from operations to Rs 3535 crore in Q4 March 2015 over Q4 March 2014. The Q4 result was announced during market hours today, 18 May 2015.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index added 0.3% to 9606.10. South Korea's KOSPI rose 0.3% to 2113.72. New Zealand's NZX50 jumped 0.2% to 5772.71. Singapore's Straits Times index fell 0.1% at 3458.11. Malaysia's KLCI climbed up 0.6% to 1823.50. Indonesia's Jakarta Composite index added 0.2% to 5237.81.
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