Asia Pacific share market rebounded on Wednesday, April 17, 2013, breaking three-day losing streak, as investors chased for bottom hunting on tracking inspiration from Wall Street overnight that ended sharp higher on strong increase in US housing starts and better-than-expected corporate earnings that added further evidence of an improvement in the world's largest economy.
The Commerce Department reported on Tuesday that U.S. builders started construction on 1 million homes last month, the highest level since June 2008. The government also said consumer prices declined last month as the cost of gas fell sharply while food prices were unchanged, the latest evidence that inflation is in check.
On the corporate side, robust quarterly earnings provided additional reason to wade back into stocks. Coca-Cola, the world's biggest beverage maker, issued first quarter earnings that beat Wall Street forecasts. As of Monday, 34 companies in the Standard & Poor's 500 had reported earnings and 20 had exceeded analysts' expectations.
However, gains on the upside were limited on concerns about global growth after the International Monetary Fund's dour assessment of global growth. The IMF on Tuesday said it was lowering its outlook for the world economy this year, predicting that government spending cuts will slow U.S. growth and keep the euro currency countries in recession. The international lending organization cut its forecast for global growth to 3.3% this year, down from its January forecast of 3.5%.
In the Asia pacific region, Tokyo share market rebounded on Wednesday, April 17, 2013, as bargain hunters began buying following steep fall in prior two days, led by financials, oil and gas companies, and technology companies, thanks to resumption of yen weakening against major currencies and IMF growth forecast for the country. The Nikkei Stock Average settled the day higher by 161.45 points, or 1.22%, at 13,382.89.
The yen resumed softening against major currency partner amid speculation Japan will escape censure at a Group of 20 meeting this week over monetary policies that have weakened its currency. The meeting precedes weekend talks of the International Monetary Fund and World Bank.
The International Monetary Fund has raised its economic projections for Japan to 1.6% this year from 1.2% and to 1.4% in 2014 from 0.7%, citing plans for fiscal stimulus and record monetary policy easing by the central bank.
Export-related stocks closed higher in Tokyo on bargain hunting after yen softened against major currencies. A weaker yen improves the value of overseas earnings at Japanese exporters when repatriated. Sony Corp rallied 2.3% to 1626 yen, Canon Inc 1.7% to 3670 yen, Hitachi 1.8% to 608 yen, and Bridgestone Corp 1.4% to 3675 yen. In the auto sector, Honda Motor Co added 2.4% to 3910 yen and Toyota Motor Corp 1.8% to 5550 yen.
Australian share market rebounded today, with gins in financials and realty stock helped to overshadow weakness in the mining & resources stocks. The benchmark S&P/ASX200 index advanced 53.80 points from prior day to finish at 5004.60, while broader All Ordinaries index grew 49.50 points to close at 4993.60.
Australian banks, realty, and trusts shares were sharp higher on interest rate cut hopes. Among lenders, Commonwealth Bank advanced 1.4% to A$69.10, Westpac 1% to A$31.82, Australia & New Zealand Banking Group 0.8% to A$29.09, and National Australia Bank 1.1% to A$32.17. Among developers, GPT Group added 1.8% to A$4.07, Stockland 1.8% to A$3.90, Mirvac 1.3% to A$1.747, and Dexus 3.8% to A$1.157.
Retailers and consumer goods producers also ended higher in Australia, with Harvey Norman led rally, up by 4.2% to A$2.76 after electrical and homewares retailer lifting its third quarter sales by 0.6% to A$1.28 billion. Comparable sales, which strip out store openings and closures, for the three months to March 31, were up 2%.
Materials and resources stocks were weak, with index leader BHP Billiton declined 0.4% to A$32.01, despite after it maintained full year production guidance for key commodities in its latest quarterly report. The world's largest diversified resources company said it was on track to produce a 183 million tonne in Western Australian for the year. The company shipped 44.4 million tonne and produced 44.2 million tonne during a quarter when iron ore prices were high, averaging above $US140 a tonne. Production was 5% lower than the previous quarter but 3% higher for the same period last year. BHP gave production guidance of about 240 million barrels of oil equivalent. Production in the March quarter was at 55.42 million barrels, 2% below the same period last year and 7% down on the previous quarter, reflecting less drilling in the US and less demand in southern Australia where its Bass Strait operations are.
Rio Tinto shares dropped 0.9% to A$54.51. Iron ore miner has revealed on Tuesday that its full extent of last week's wall collapse at one of its copper mines in the United States, confirming that its refined copper production will reduce by close to 30% in 2013. Its shares ended 0.5% down at A$54.83.
Uranium miner Paladin Energy dropped 3.8% to A$0.77 after announcing an underwhelming set of March quarter results today. The company said its production at Paladin's flagship Langer Heinrich mine in Namibia was lower than the previous three reporting periods, and 13% below the December quarter, on the back of problems with the water supply on site.
New Zealand shares rose as persistently low interest rates globally polished the appeal of equities and drew investors to companies with consistent earnings such as Ryman Healthcare and Port of Tauranga. The NZX 50 rose 50.43 points, or 1.1%, to 4478.26. Within the index, 41 stocks rose, five fell and four were unchanged.
New Zealand consumer price index stood at 0.9% (YoY) in first quarter, versus 0.9% (YoY) in 4Q, meeting estimate set for 0.9%. The year-over-year headline figure marked the third consecutive quarter that it stayed below RBNZ's CPI target of 1-3%. On a quarterly basis, consumer price index rose from -0.2% to 0.4% in first quarter, came in slightly shy of estimate set for 0.5%.
South Korean shares were tad higher, with the benchmark KOSPI Composite rose marginal 0.1% at 1923.84 on earnings concerns after Samsung Engineering reported first-quarter losses on Tuesday, highlighting the vulnerability of firms with overseas exposure.
The China market closed mixed as risk sentiments turned subdued after Moody's cut in China's credit outlook, IMF's downward revision of domestic growth outlook, and on speculation new lending will slump this month. The Shanghai Composite Index declined 1.05 points, or 0.05% to finish the day at 2,193.80.
The International Monetary Fund cut China's growth forecast for this year yesterday to 8% from 8.2%. The Washington-based lender reduced its global economic growth projection to 3.3%, from a January prediction of 3.5%. Moody's Investors Service yesterday affirmed China's government bond rating of AA3 but cut the outlook to stable from positive, the second pessimistic revision by a foreign ratings agency this month. Last week, Fitch Ratings cut China's long-term local currency credit rating to A-plus from AA-minus, citing concerns about the risk that excessive local government borrowing posed to the wider economy. Moody's referred to the same issue in justifying its negative revision.
Chinese lenders shares ended weaker on speculation new lending will slump this month. The China Securities Journal reported today, citing Shenyin & Wanguo Securities Co that new loans may be 800 billion yuan ($129.4 billion) in April, down from 1.06 trillion yuan in March. China Merchants Bank lost 1.5% to 12.16 yuan, Industrial Bank Co 1.7% to 16.99 yuan, and Shanghai Pudong Development Bank Co 1.5% to 9.59 yuan.
Hong Kong market declined sharply late hour on Wednesday, April 17, 2013, dragging the benchmark Hang Seng index 0.5% down at 21569.67, while China Enterprise Index down by 1.2% to 10300.93. City bourses fell for fourth day in row amid rumor of financial institution taking short position of mainland banks. Meanwhile jitters about China's growth intensified selling pressure. The official China Securities News quoted an unnamed Shenzhen-based fund company source saying that foreign banks were taking short positions in mainland banks.
Within 50 Hang Seng index blue chips, 34 stocks down, while 16 stocks rose. Kunlun Energy Co dipped 4.6% to HK$15.10, while Cathay Pacific Airways jumped 2.9% to HK$12.98, making themselves the largest blue-chip loser and winner. CSR Times Electric plunged 6% to HK$20.6 after its first quarter profit declined 65%. Market heavyweights were lower. China Mobile fell 0.6% to HK$80.9, while HSBC edged down 0.56% to HK$79.95. Luxury stocks were under pressure after the world's No.1 luxury goods group LVMH said Louis Vuitton sales in Europe have been hit by weak demand, especially from Asian tourists, as China's sluggish economy showed no sign of improvement. Prada fell 2.3% to HK$72.65 while watch retailers Hengdeli Holding dropped 1.3% to HK$2.29
Indian benchmark indices pared gains in afternoon trade as European stocks reversed initial gains. The barometer index, the S&P BSE Sensex, was up 24.05 points or 0.13%, off 100.90 points from the day's high and up 65.72 points from the day's low. Index heavyweight Reliance Industries (RIL) extended intraday losses after the company reported muted sequential growth in net profit in Q4 March 2013 after trading hours on Tuesday, 16 April 2013. Another index heavyweight and cigarette major ITC hit record high. The market breadth, indicating the overall health of the market, was positive. FMCG stocks gained on reports of likely normal monsoon this year. Interest rate sensitive auto stocks edged higher as slowing wholesale price inflation has raised rate cut expectations. NTPC rose after bulk deal.
Elsewhere, Indonesia's Jakarta Composite rose 0.9%, Malaysia's KLSE Composite added 0.6%, and Taiwan's Taiex added 0.1%.
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