Asia Pacific share market soared up on Friday, 22 January 2016, on prospect of further monetary stimulus for the eurozone economy and a strong rebound for crude oil prices.
Regional stocks opened sharply higher and hold gains throughout the day, following overnight gains on Wall Street and in Europe, after a pledge from the head of the European Central Bank (ECB) that he was ready to further ease monetary policy.
The European Central Bank (ECB) pledged on Thursday that he was ready to further ease monetary policy. Overnight, Mario Draghi, ECB president strongly hinted at the central bank's post-meeting press conference that it could offer more stimulus measures in March to boost inflation in the eurozone. ECB head Mario Draghi said there "are no limits" to how far it will go with its policy tools as inflation wallows at 0.2%, well off the bank's 2% target.
Mario Draghi's remarks have sparked speculation among investors that the Bank of Japan could unveil more of economy-boosting measures at its upcoming monetary policy meeting next week as inflation is hammered by crashing oil prices.
Crude Oil prices rebounded after falling to a more-than-12-year low early this week after the ECB hints of further stimulus as early as March bolstered global risk sentiment. US crude futures were up 4.76% to $29.70 per barrel. On Wednesday, US crude futures fell to their lowest since September 2003. Brent crude was up $1.63, or 5.85%, at $29.51.
Among Asian bourses
Energy, resources lead Australia market rally
Australian share market ended higher for second straight session, as broad-based buying underpinned on tracking gains in offshore market overnight and rebound in commodity prices. All ASX sectors advanced, with energy and resources stocks being major gainers. At the close, the benchmark S&P/ASX 200 index advanced 52 points, or 1.07%, to 4916 points, while the broader All Ordinaries index rose 52 points, or 1.06%, to 4969.60 points.
Shares of materials and resources were stronger as base metal price closed with gains overnight after the head of the European Central Bank raised hopes of more monetary stimulus, prompting investors to buy back bearish position. BHP Billiton soared up 7.5% to A$15.26, while Fortescue rose 6.2% to A$1.535 and Rio Tinto grew 3.4% to A$39.65
Shares of energy players lifted up on tracking a 6% rebound in crude oil prices. Brent Crude prices closed higher overnight after a lesser than expected rise in EIA stockpile data. Among oil explorer and refiners, Woodside Petroleum added 1.8% to A$25.45, Oil Search grew 8.5% to A$6.12, Santos grew 10.9% to A$2.84, and Origin Energy jumped 4.1% to A$3.84.
Nikkei surges 5.9% on policy easing bet
Japan share market rebounded strongly, amid resumption of risk appetite buying after the European Central Bank's hints of further stimulus and a strong rally for oil prices. Tokyo stocks were also supported by yen depreciation against the basket of major currencies. All of the 33 Topix industry groups rose, led by mining, developers, oil explorers, iron and steel, and harbor transporters. The benchmark Nikkei 225 index surged 5.9%, or 941.27 points, to 16958.53. The Topix index of all Tokyo Stock Exchange First Section issues grew 72.70 points, or 5.59%, to 1374.19
Shares of export-related companies gained, after the yen softened against the dollar, with the pair trading at 118.02 during Asian hours. A weaker yen boosts exporters' overseas earnings when translated back into the Japanese currency. Uniqlo-operator Fast Retailing, a market heavyweight, grew 8.1% to 37420 yen, Fanuc Corp 6% to 18775 yen, Sony Corp 4% to 2529 yen, Canon Inc 4.7% to 3310 yen, and Panasonic Corp 5.1% to 1111 yen. Automaker Toyota Motor Corp added 6.7% to 6822 yen, Nissan Motor Co 6.5% 1103 yen and Mazda Motor Corp. 7.1% to 2013 yen.
Sharp Corp. jumped 3.1% to 132 yen, extending Thursday's 5.8% gain, after reports Taiwan's Foxconn Technology Co. will offer $5.3 billion to acquire the struggling Japanese electronics company.
Dai-ichi Life Insurance Co. jumped 6.3% to 1699 yen after a filing showed Effissimo Capital Management Pte now owns a 5.1% stake in the insurer.
Musashi Seimitsu Industry Co. surged 9.1% after Mitsubishi UFJ Morgan Stanley Securities Co. initiated coverage of an autoparts maker with an overweight rating on the stock.
China Market climbs 1.25%
Mainland China stock market ended higher in volatile trade, joining a global rebound after dovish comments from Mario Draghi, head of the European Central Bank, and rebounding oil prices. Meanwhile buying pressure underpinned after the government signalled supply-side reforms in the steel and coal industries. Market gains were, however, limited as investors were waiting for more clarity and certainty regarding issues including economic growth and the pace of yuan's depreciation. The Shanghai Composite Index rose 1.25%, or 36.08 points, to close at 2916.56. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, grew 26.67 points, or 0.93%, to 2851.61.
Shares of PetroChina Co. and China Shenhua Energy Co climbed more than 7%, after Premier Li Keqiang called for supply-side reforms in the steel and coal industries, while the Economic Information Daily reported the government will provide 100 billion yuan ($15 billion) a year to help reduce capacity in those sectors.
Hong Kong Market joins global rally
The Hong Kong stock market rebounded, following gains in Wall Street overnight and regional bourses today, on dovish comments from Mario Draghi, head of the European Central Bank, and rebounding oil prices. All major sectors bounced, with materials and resources and oil producers being major gainers. The benchmark Hang Seng Index has gained 538.36 points, or 2.9%, to 19080.51 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, added 269.34 points, or 3.44%, to 8104.98 points. Turnover reduced slightly to HK$89.9 billion from HK$96.5 billion on Thursday.
Macau gaming counters rose across the board after the government said that December tourist visitations rose 3.7%. Sands China (01928) soared 11.2% to HK$23.25 as it declared interim dividend of HK$0.99. Galaxy Ent (00027) leaped 7% to HK$21.5. Wynn Macu (01128) rose 5.8% to HK$7.32.
Oil prices rebounded 4% overnight, pushing up share prices of oil majors. CNOOC (00883) jumped 8% to HK$6.94. PetroChina (00857) shot up 6.4% to HK$4.16. Sinopec (00386) gained 7.9% to HK$4.51.
Coal and steel counters rose across the board after China's premier Li Keqiang stressed destocking. China Shenhua (01088) shot up 10.3% to HK$10.68. China Coal (01898) leaped 12.5% to HK$2.61. Magang (00323) put on 4% to HK$1.51. Angang (00347) gained 1.8% to HK$3.6. Chongqing Iron (01053) advanced 7.2% to HK$1.04.
Sensex regains 24,000 level
Metal, auto and banking sector stocks led the rally on the domestic bourses triggered by a rebound in global stocks, with the barometer index, the S&P BSE Sensex, reclaiming the psychologically important 24,000 mark. The Sensex surged 473.45 points or 1.98% to settle at 24,435.66. The 50-unit Nifty 50 index gained 145.65 points or 2% to settle at 7,422.45.
Shares of engineering and construction major L&T surged after announcing a large order win. Mahindra & Mahindra (M&M) jumped after announcing the launch of its mHawk new 1.99 litre diesel engine. Axis Bank extended previous day's gains triggered by the bank reporting good Q3 results. Stocks of oil exploration and production (E&P) companies rose as global crude oil prices recovered. Idea Cellular fell sharply after the company's third-quarter earnings fell short of street estimates.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index added 1.2% to 7756.18. South Korea's KOPSI rose 2.1% to 1879.43. New Zealand's NZX50 grew 0.7% to 6121.61. Malaysia's KLCI rose 1.5% to 1625.21. Singapore's Straits Times index added 1.8% at 2577. Indonesia's Jakarta Composite index climbed up 1% to 4456.74.
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