Asia Pacific share market closed higher on Monday, 10 November 2014, despite mixed lead from offshore market on Friday, with China's bourses outperforming the region after a new launch date was announced for an anticipated cross-border trading link. The MSCI Asia Pacific Index added 0.8% to 141.27.
Regional shares took a mixed lead at opening bell from offshore. In the United States on Friday night the S&P 500 and Dow Jones Industrial Average edged higher will the Nasdaq edged lower. In Europe the FTSE 100 was higher while the FTSE Euro Top 100 was lower.
Meanwhile, buying pressure encouraged by better than expected China trade data and announcement of cross-border trading links between the Hong Kong and Shanghai.
Over the weekend, the General Administration of Customs said Chinese exports rose by 11.6% in October, but slower from a 15.3% jump in September. Imports increased an annual 4.6%, pulling back from a 7% rise in September. That left the country with a trade surplus of US$45.4 billion for the month, which was near record highs.
China's Bureau of Statistics said on Monday that inflation grew at a rate of 1.6% in October, unchanged from September and hovering near a five-year low. China's producer price index fell 2.2% from a year ago. It was the 32nd consecutive month of declines.
The announcement of cross-border trading links between the Hong Kong and Shanghai, cleared uncertainty over the start of the program. Bourses in the two cities will begin trading through the program, which allows a net 23.5 billion yuan a day in cross-border purchases, on November 17, regulators said in a joint statement after weeks of investor speculation on the start date. The exchange link between Hong Kong and Shanghai will give foreign investors unprecedented access to China's $US4.2 trillion equity market.
The exchange link marks one of China's biggest steps toward opening up its capital account, boosting global use of the yuan and turning Shanghai into an international financial centre. It will give foreign investors greater access to Chinese companies linked to nation's consumer market.
Among Asian bourses
Banks drags Aussie market 0.45% down
Australian share market closed weaker, as fall in banks and financials and consumer stocks were more than gains elsewhere. The decline came as investors were keeping money aside ahead of the upcoming A$5.5 billion float of Medibank Private. The benchmark S&P/ASX 200 Index declined 0.45% to 5524 and the broader All Ordinaries Index fell 0.37% to 5501.40.
Financial stocks were down, with top four lenders being major losers. Westpac Banking Corp lost 3.9% to A$33.47 as it traded without the rights to 92 cents per share final dividend. ANZ Banking Group shed 1.1% to A$32.52, while National Australia Bank lost 0.7% to A$32.98, with both having traded ex-dividend at the end of last week. Commonwealth Bank of Australia fell 0.2% to A$82.56.
Shares of materials and resources advanced on the back of higher oil and gold prices and China's better than expected monthly trade surplus. Among the major miners, Resources giant BHP Billiton rose 0.6% to A$34.68, while main rival Rio Tinto lifted 0.9% to A$61.24. Australia's biggest gold producer, Newcrest Mining, rose 5.5% to A$9.27 as Citigroup analysts upgraded it to a "buy" following a last week's stronger than expected quarterly production update.
Australia's biggest oil producer Woodside Petroleum added 0.5% to A$40.91. China-backed coal miner Yancoal Australia plunged 27.3% to 16 cents as it announced a US$2.3 billion debt rising to repay mounting loans to its major shareholder.
Uranium miners got a boost from news Japan is set to restart its Sendai nuclear plant, which has been closed since the Fukushima disaster in 2011. Paladin Energy jumped 12.1% to A$0.37.
Stronger yen weighs Nikkei 0.59% down
Japanese share market closed down, as investors opted for withdrawing profit on recent rally after yen appreciated against greenback. The benchmark Nikkei Stock Average declined 99.85 points, or 0.59%, to 16780.53.
The yen appreciated to upper-113 level on Monday from a seven-year high of Y115 late last week, after a weaker-than-expected increase in U.S. October non-farm payrolls on Friday. The greenback was changing hands at Y113.99 late evening today, well off its Friday level of Y115.35. A stronger yen is generally bad for Japanese exporters, as it gives them less room to cut prices on goods they sell overseas and reduces the yen value of any profits they send back home.
Toyota Motor Corp, the world's biggest automaker, slid 1.5% to 6712 yen. Honda Motor Co, a carmaker that gets 84% of sales abroad, dropped 1.5% to 3588 yen. Nissan Motor Co., which gets more than 70% of its revenue abroad, declined 0.5% to 1040.50 yen. Industrial robot maker Fanuc Corp slipped 1.5% to 19660 yen, while chip testing equipment maker Advantest Corp fell 0.4% to 1334 yen. Canon Inc, the world's biggest camera maker, lost 0.6% to 3534 yen.
Takata slumped 17% to 1,177 yen after U.S. senators last week called for the Justice Department to open a criminal investigation on a report that said the company conducted secret tests of its air bags in 2004, years before they were linked to deaths, injuries and recalls of millions of cars.
Telecom giant Nippon Telegraph and Telephone fell 4.1% to 6,542 yen after a slew of brokerage actions followed its Nov. 7 results briefing. The company lowered its current fiscal year operating profit target to Y1.095 trillion from Y1.215 trillion, and its net profit guidance by 10% to Y290 billion.
DeNA Co., a mobile game and social-media service company, jumped 13% to 1,628 yen after reporting a 5.5 billion yen quarterly profit.
Sporting goods maker Asics gained 3.2% after logging a July to September operating profit of Y13.0 billion, up 29% on-year and ahead of guidance. Management also raised its April to December profit and dividend forecasts.
Daihen Corp., which makes power transformers, soared 8.2% to 448 yen after boosting its net income forecast for the full year by 11% to 5 billion yen.
Shanghai Composite rises to 3-year high on exchange link news
Mainland China share market advanced to highest level three-years on Monday, 10 November 2014, after a new launch date was announced for an anticipated cross-border trading link between the Hong Kong and Shanghai, clearing uncertainty over the start of the program. The Shanghai Composite Index, which tracks both A and B shares, gained 2.3% to 2,473.67 at the close, the highest level since Nov. 15, 2011.
Shares of financials were among the biggest gainers. Shanghai Pudong Bank finished 3.6% higher. China Minsheng Banking Corp. gained 4.6% in Shanghai after announcing plans to raise as much as 30 billion yuan through sales of preferred shares.
Shares of China State Construction Engineering Corp. surged 10% daily limit after the government approved $113 billion on building projects and President Xi Jinping pledged to boost spending on regional transport links. China's top economic planner accelerated approvals for 693.3 billion yuan of projects, China National Radio reported Nov. 7. The next day, Xi pledged $40 billion to set up a Silk Road Fund that will finance the construction of infrastructure linking markets across Asia.
The yuan spot rate appreciated to 6.1197/208 against the US dollar on Monday, as the People's Bank of China has set the daily reference rate 0.37% stronger from yesterday level at 6.1377 against the greenback, according to the data released by the China Foreign Exchange Trading System.
Hang Seng rises 0.83% on stock connect news
Hong Kong share market closed higher, following gains in mainland A-share, after a new launch date was announced for an anticipated cross-border trading link. The Hang Seng Index rose 0.83%, or 194.46 points, to 23744.70. Turnover increased to HK$91.98 billion from HK$73.44 billion on Friday.
Shares of bourse operator HKEx (00388) soared 4.6% to HK$183.6, becoming top blue chip winner following the Stock Connect news.
Brokerages rose across the board on the Stock Connect news. Both First Shanghai (00227) and Cinda Int'l (00111) jumped 7% to HK$1.8. Shenyin Wanguo (00218) and Guotai Junan (01788) added 4.3% and 3% to HK$4.9 and HK$5.8. Mainland brokerages were also higher. CC Securities (01375) added 3.5% to HK$4.15. CGS (06881) and Haitong Sec (06837) gained 2%. CITIC Sec (06030) rose 1%.
China Resources (00291) plunged 5% to HK$16.98, becoming worst blue chip performer, after the company tipped a significant 9-month profit drop on the poor performance of its retail segment. CR Land (01109) dipped 4% to HK$17.28 after its chairman suddenly resigned.
Link REIT (00823) rose 2.6% to HK$47.25. The stock will be included into the HSI, replacing Cosco Pacific (01199), which fell 1.1% to HK$10.64.
Sensex, Nifty eke out small gains
The BSE Sensex and Nifty hit record highs on Monday as Prime Minister Narendra Modi's push to expand his cabinet raised further hopes for economic reforms, but gave up most of their gains towards the end of the session as investors booked profits.
As per provisional closing, the S&P BSE Sensex was up 25.41 points or 0.09% to 27,894.04. The index jumped 159.33 points at the day's high of 28,027.96 in early trade, a lifetime high for the index.
The CNX Nifty was provisionally up 7.25 points or 0.09% at 8,344.25. The index hit a high of 8,383.05 in intraday trade, a lifetime high for the index.
The Central Board of Direct Taxes (CBDT) on Friday, 7 November 2014, issued instructions to its field offices regarding its constant endeavour towards a non-adversarial tax regime.
In the first cabinet expansion exercise of the Narendra Modi government, 21 ministers were inducted into the council of ministers yesterday, 9 November 2014. Four ministers were allotted cabinet rank, whereas three took charge as Ministers of State (independent charge). The remaining 14 took oath as MoS. Among cabinet ministers, former Goa Chief Minister Manohar Parikkar was allotted Defense portfolio. Suresh Prabhu was handed over with Railways which was earlier held by D. V. Sadananda Gowda who has now been allocated the portfolio of Law & Justice. Jagat Prakash Nadda was made minister of Health & Family Welfare. Chaudhary Birender Singh was allotted Rural Development, Panchayati Raj, Drinking Water and Sanitation.
FMCG stocks edged higher on renewed buying. Bank stocks declined. L&T declined after Q2 results. Coal India shrugged off weak Q2 earnings. ITC rose after change of guard at the health ministry. Essar Oil declined after Q2 results. Rural Electrification Corporation dropped in volatile trade after strong Q2 earnings.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 1.54% to 9049.98. South Korea KOSPI rose 0.95% to 1958.23, following reports that the country reached a free trade agreement with China at the Asia-Pacific Economic Cooperation (APEC) summit. New Zealand's NZX50 rose 0.95% to 5470.34. Singapore's Straits Times index fell 0.14% at 3286.39. Indonesia's Jakarta Composite index fell 0.44% to 4965.39. Malaysia's KLCI added 0.21% to 1827.93.
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