Key benchmark indices of the Asia Pacific stock market closed higher on Friday, June 28, 2013, as encouraging economic indicators from Japan and further proof that the US economy is on the upswing lifted sentiments. Meanwhile, China's central bank governor Zhou Xiaochuan pledged to adjust liquidity supply to maintain the stability of the money market also encouraged sentiments. MSCI's broadest index of Asia-Pacific shares outside Japan was up 1%.
The advances in the regional market followed positive finish on Wall Street overnight. The US market rallied on Thursday after better than expected economic data boosted the growth outlook and as Federal Reserve officials downplayed investor speculation they will curb stimulus soon.
The National Association of Realtors reported on Thursday in the New York that its seasonally adjusted index for pending home sales rose 6.7% last month. That's the highest level since December 2006. Separately, the U.S. Commerce Department said consumer spending rose 0.3% last month, nearly erasing a similar decline in April. Income rose 0.5%.
The president of the New York branch of the Fed said the central bank would likely keep buying bonds if the economy failed to grow at the pace expected. Jerome Powell, a member of the Fed's board in Washington, said investors appear to have incorrectly concluded that the Fed will taper its purchases soon.
Meanwhile, the market have also won support after Japan's economic data showed factory output in May rose to the most since December 2011, while retail sales climbed and consumer prices halted a six-month slide as a weakening yen sent utility costs up at the fastest pace in almost five years. Prices excluding fresh food and energy fell 0.4% in May from a year earlier, the statistics bureau in Tokyo reported today. Industrial production advanced 2% from April driven by demand from power companies. Retail sales gained 1.5% from the previous month.
Investors were also encouraged by China's central bank governor Zhou Xiaochuan pledge at the Lujiazui Forum in Shanghai that the People's Bank of China will employ various tools and measures to adjust market liquidity and ensure market stability while continuing its moderate monetary policy.
In the Asia Pacific region, the Japan's share market closed sharply higher for second day in row, on tracking overnight gains on Wall Street and the dollar's rise versus the yen. Meanwhile, heavy buying of stock index futures by speculative investors, also providing support in cash segment. Furthermore, the gains in the domestic market propelled further after data showed factory output rose the most since December 2011, retail sales climbed and consumer prices halted a six-month slide. The Nikkei Stock Average jumped 3.51% to end the day at 13,677.32. The benchmark index marked its third-largest increase this year and reached its highest point since May 31.
The Ministry of Economy, Trade and Industry said on Friday that Japan's industrial production rose 2% in May from April, the fourth straight monthly increase, while core consumer prices were unchanged from a year ago. But compared to a year ago, the industrial production index declined 1%, and manufacturers project a 2.4% drop in June, suggesting that the economy is still struggling to gain traction.
The Japan Automobile Manufacturers Association said that Japan's exports of cars, trucks and buses declined 7.2% on year in May for the 10th consecutive month. Exports totaled 359,752 vehicles in May, down from 387,776 vehicles in the same month a year earlier, the association said. JAMA said that production of cars, trucks and buses in Japan declined 6.2% Y-o-Y in May. Total vehicle output fell to 732,714 vehicles in May from 781,340 vehicles in the same month a year earlier. Domestic vehicle demand totaled 367,648, down 6.9%.
In Australia, Sydney shares finished the final trading session of this financial year ended Friday, June 28, 2013, slight lower after trading flat for most of the day. The benchmark S&P/ASX200 lost 0.2% to 4802.6. For the week the ASX200 added 63.8 points, or 1.4%. For the financial year it added 707.96 points, or 17.3%.
Stocks in Australia rose in early trade Friday, with reiterations from US Federal Reserve officials that monetary stimulus will depend on the economic outlook helping Australian equities reach for a third straight win. But investors and traders weren't overly motivated to buy or offload equities on the final trading session of this financial year.
Australian gold miners shares declined steeply today after bullion prices dived below $1200 for the first time in nearly three years, as month-end book squaring and relentless liquidation by institutional investors sent bullion prices sharply lower. Overnight, gold reversed early gains in New York trade, and the slide accelerated with stop-loss orders triggered after the price fell below $1225 an ounce to $1199.51, down 2.1%. Its session low of $US1197.1 an ounce was its lowest since August 12, 2010. Among bullion miners, Newcrest Mining sank 0.5% to A$9.85.
Kingsgate fell 7% to A$1.26 on news the gold miner will take a A$300 million write-off against its Challenger gold mine in South Australia - nearly equal to the price it paid for the miner - as it slashes output at the mine to cope with the slumping gold price. Now, with the sharp decline in the gold price, Kingsgate said it will cut output at the mine to 70,000-80,000 ounces of gold annually, down from output which had been targeted at around 100,000 ounces annually once recent production difficulties had been resolved. The cut in output comes as it has decided to focus on mining higher grades at the mine. In the March quarter, costs at Challenger were $US1278 an ounce.
In South Korea, Seoul market benchmark KOSPI surged 1.56% to 1863.32, led by auto makers and financial stocks. Hyundai Motor Co jumped 3.44% and Shinhan Financial Group Co rose 1.48%.
South Korea's industrial production unexpectedly shrank in May, swinging back to contraction from April's brief turnaround to expansion in months, government data showed Friday. Industrial output was down 1.4% on-year in May largely on falling shipments of machinery and oil-refinery goods, after a revised 1.6% expansion in April following two months of contraction, according to Statistics Korea.
In China, China's shares rebounded sharply from four year low late afternoon, sending the benchmark Shanghai Composite index 1.5% higher to finish at 1979.21. It closed at the lowest level since January 2009 yesterday. The Shanghai index slumped 14% this month, capping the biggest monthly loss since August 2009, amid concern higher capital costs will curb economic growth as money-market rates jumped to records.
The China's market registered first gain in eight sessions in row as bottom hunting reemerged across the board on calming jitters over liquidity squeeze after the People Bank of China governor Zhou Xiaochuan has vowed to keep cash flowing, saying it will ''adjust'' liquidity to ensure stability after a week-long squeeze that has rattled financial markets. "The People's Bank of China will employ various tools and measures to adjust market liquidity and ensure market stability while continuing its moderate monetary policy," Zhou told the Lujiazui Forum in Shanghai this morning.
Hong Kong's benchmark Hang Seng Index closed 1.8% higher at 20803.29 while the Hang Seng China Enterprises Index added 1.7% to 9,311.44. Gains in the HK bourses for second day came after a launch of a new pilot program allowing individual households to make financial investments overseas. The Qualified Domestic Individual Investor program, also known as QDII2, will include Guangzhou and Shenzhen as its trial sites, specifically aiming at investment in HK stocks.
Among the HK 50 blue chips, 44 stocks rose and five fell, with one stock remaining steady. Belle dipped 2% to HK$10.66 on Citigroup's target price cut, while Hengan soared 7.2% to HK$84.5, making themselves the biggest blue-chip loser and winner. Market heavyweights were higher. China Mobile jumped 4% to HK$81, while HSBC added 0.9% to HK$81.25. Brokerages were higher on the QDII2 story. CITIC Sec rose 3.9% to HK$13.78. Hating Sec and CGS gained 2% and 3.5% to HK$9.4 and HK$4.74.
Singapore's share market rose for a fourth straight session and were headed for their first weekly gains after five weeks of decline, as easing fears of an early exit of U.S. monetary stimulus soothed investors' nerves and sent global equity market higher. The benchmark Straits Times Index rose 1% to 3,148.32 points
Malaysian share market jumped on the back of last minute buying. The benchmark KLCI index was up by 21.97 points or 1.25% to 1773.54.
Indian share market rallied sharply today on the back of positive global cues and the government's gas and energy sector reforms. The barometer index, the S&P BSE Sensex, closed provisionally 2.5% higher at 19350.68. The Indian government's decision to double the natural gas price by April 1, 2014 boosted bullish sentiment. Sentiment was also boosted as the rupee gained on Friday, further retreating from a record low hit on Wednesday.
Elsewhere in the region, New Zealand's NZX50 rose 0.5%. Indonesia's JKSE added 3.1%. Taiwan's Taiex added 2.3%.
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