Headline indices of the Asia Pacific market kickoff the week starting Monday, June 17, 2013 with encouraging tone, as investors chased for bargain buying following sharp correction last week. Regional market declined in previous week amid jitters over the Fed's stimulus exit and China's slowdown.
Gains in the regional bourses were largely supported by defensive sectors. Market participants continued shifting funds toward consumer goods, utilities, drug makers and other defensive players amid gyration and uncertainty over whether the US Federal Reserve will start to scale back its massive stimulus.
In the US, the two-day U.S. central bank meeting starting on Tuesday. Traders preferred a risk averse mood ahead of Wednesday's FOMC announcement and press conference. There are expectations that Fed chairman Bernanke would explain regarding the issue of tapering the asset purchases.
Markets have been spooked since late May when Fed chairman Ben Bernanke said the U.S. central bank might pull back on its aggressive support for the U.S. economy if indicators, especially hiring, improve. The Fed buys $85 billion in bonds every month as part of a campaign to keep interest rates extremely low. The aim is to encourage borrowing, spending and investing. Some investors worry that long-term interest rates could spike when the Fed pulls back, raising borrowing costs and threatening the economic recovery.
Credit Agricole CIB in a report said no changes are expected in the Fed's policies but Bernanke's ability to communicate effectively the Fed's strategy over tapering is crucial to determine whether market volatility persists or lessens.
In the Asia Pacific region, the Japanese market closed higher in thin trade, with the Nikkei Stock Average up by 346.60 points, or 2.73%, to 13,033.12, registering second gain in row after shaving nearly 20% (till June 13) from 2013 peak. In Japan, Chiyoda Corp. jumped 7.9% after Bank of America Merrill Lynch upgraded the industrial-plant maker and Kansai Electric Power Co. rose as much as 5% on a report the nuclear-power generator plans to apply to restart four reactors.
In Australia, the Australian share market closed higher after clawing back early losses, thanks to solid performances from banks and financials that helped to overshadowed losses elsewhere. The benchmark S&P/ASX200 index advanced 0.7% to finish at 4825.90, while the broader All Ordinaries rose 0.6% to 4805. The Australian market had opened nearly 1% lower today on tracking losses in US stocks last week and concerns over the slowing Chinese economy.
Figures from the Australian Bureau of Statistics showed that the new car sales in Australia were almost flat in May. The May 2013 seasonally adjusted estimate (93209) has increased by 0.2% when compared with a year ago period. The sale of other vehicles such as trucks and buses have picked up by 3.5% last month. Despite this, 1.1 million new vehicles have been sold over the year.
In New Zealand, shares of Auckland market rallied, buoying up the benchmark NZX50 0.6% to 4447.64, thanks to better than expected Westpac Consumer Confidence and service PMI data.
New Zealand consumer confidence came in with a score of 116.6 in the second quarter of 2013, a survey from Westpac Bank revealed on Monday, marking the highest score for the index since the second quarter of 2010 - just before the earthquake in September of that year that devastated portions of the country. The headline figure was up from 110.8 in the previous three months. Among the individual categories, the net percentage of households with a positive outlook over the coming year surged from -5.8 to 13.8. There was also an increase in household expectations for their own finances, a net 10.1% expect improvement over the coming year, up from 7.2%. Households' assessment of their current financial situation slipped to -10.8, down from -10.4, but that remains the second-highest reading in that category since December 2007.
An index measuring the strength of the services sectors in New Zealand continued to show expansion in May, posting a score of 56.2. That's unchanged from the upwardly revised April reading (originally 56.1), but it remains well above the boom-or-bust score of 50 that separates expansion from contraction. Among the five individual components of the survey, all five showed expansion, including new orders, sales, employment, inventories and supplier deliveries. By region, expansion was present in the Northern, Center and Southern regions, while the Canterbury region saw contraction.
In China, the Chinese market closed mixed after fluctuating in and out of the boundary line on Monday, June 17, 2013, as losses resources and developers shares were offset by gains in utilities and drug makers. The Shanghai Composite Index declined 0.27% to 2,156.21 while the smaller Shenzhen Composite Index gained 0.2% to 977.66.
Shanghai Composite index fell for the ninth time in 10 days on concerns over economic growth slowdown. The World Bank, Morgan Stanley and UBS AG all cut 2013 gross domestic product estimates for China last week.
Chinese developers and construction related stocks declined on speculation stricter property curbs will hurt earnings. China Vanke dropped 3.4% to 10.33 yuan. Poly Real Estate, the second-biggest developer, fell 0.9% to 10.97 yuan, while Gemdale Corp. lost 1.9% to 6.64 yuan. Construction material producer Anhui Conch dropped 1.8% to 14.20 yuan. Shares of defensive companies such as drugmakers climbed up. Yunnan Baiyao Group Co. surged 5.1% to 88.20 yuan. Tasly climbed 2.5% to 41.31 yuan. Shares of solar energy equipment maker rebounded on reports China may introduce policies on solar power subsidies as early as June. Hareon Solar Technology Co. surged 2% to 6.71 yuan.
In Hong Kong, city shares surged sharply as investors chased for bargain buying across the board, led by energy, developer and utilities, after heavy selloff previous week. The Hang Seng Index closed today at 21225.90, up 256.76 points or 1.22% from prior day. Property developers extended gains in Hong Kong, with China Overseas Land & Investment rising 1.9%, and Cheung Kong Holdings adding 3.7% after announcing that the company and its joint-venture partners were buying a Dutch waste-processing firm. Among energy producers, shares of Cnooc climbed 4.1%, and those of PetroChina Co added 3%, after benchmark U.S. crude-oil futures jumped on Friday.
Preliminary statistics on Hong Kong's Gross National Income (GNI) and external primary income flows for the first quarter of 2013 were released today by the Census and Statistics Department (C&SD), showed Hong Kong's GNI increased by 4.7% over a year earlier to $517.5 billion at current market prices. The Gross Domestic Product (GDP), preliminarily estimated at $504.9 billion at current market prices in the same quarter, recorded a 4.1% increase over the same period. Compared with GDP, the value of GNI was larger by $12.6 billion in the first quarter of 2013, representing a net external primary income inflow of the same amount, and equivalent to 2.5% of GDP in that quarter.After netting out the effect of price changes, the preliminary statistics showed that Hong Kong's GNI increased by 2.1% in real terms in the first quarter of 2013 over a year earlier. The corresponding GDP in the same quarter was up by 2.8%.
In India, shares of Indian market rallied led by auto, capital goods, TECk and consumer durables stocks amid firm global cues and as the status quo of the Reserve Bank of India on interest rates largely expected. The 30-share index was at 19,325.87, up 147.94 points or 0.77%. It touched a high of 19,084.68 and a low of 19,084.68 in trade today.
The Reserve Bank of India, in its mid-quarter monetary policy review, has kept the repo rate unchanged at 7.25% and cash reserve ratio at 4%. It has also left the reverse repo rate unchanged at 6.25%.
Elsewhere in the region, the South Korea's KOSPI fell 0.3%. Malaysia's KLSE added 0.6%. Singapore's STI added 0.7%. Taiwan's Taiex rose 0.7%.
Powered by Capital Market - Live News
