Investors' appetite for riskier assets turned bullish advanced for the first time in five consecutive sessions on calming concerns relating to emerging market stability after extreme measures were invoked by Turkey and India's central banks spurred optimism that other central banks will take steps to stem capital outflows.
Emerging-market currencies are seeing a relief rally, led by the Turkish lira after the country's central bank hiked interest rates aggressively to protect capital outflows from the country.
Turkey's central bank increased its marginal funding rate from 7.75% to 12%, the one-week repo rate to 10% from 4.5% and the overnight borrowing rate to 8% from 3.5%, in its first emergency meeting since 2011. The move is aimed at stemming the lira's sharp declines and follows Tuesday's unexpected rate hike from India's central bank. The Reserve Bank of India (RBI) hiked the repo rate by 0.25% to 8%, leading to a rally in the rupee.
Despite a positive day, move on the upside was limited as nervous investors' largely awaited sideline on caution ahead of the outcome of two-day meeting of the U.S. Federal Reserve later in the global day. The Fed on Wednesday wraps up a two-day meeting and investors will be looking to see if it announces any further cuts to its stimulus. There are fears that officials may announce to reduce the central bank's monthly bond buying by another $10 billion to $65 billion. The U.S. central bank last month said it would reduce its bond-buying by $10 billion-a-month from January to $75 billion, citing a pick-up in the world's biggest economy.
Among Asian bourses, shares of the Japan's market skyrocketed, as investors chased for bottom fishing across the board on calming fears about the instability of emerging markets. Market sentiments were also bolstered by halt in yen appreciation against the euro and the US dollar. The benchmark Nikkei-225 index advanced 403.75 points to 15383.91, while the Topix index of all first-section shares grew 31.87 points to 1256.18.
Export related stocks were bolstered by the yen's fall against major currencies. A weaker yen makes Japanese goods more competitive overseas and improves repatriated revenues. The euro was quoted at 141.20-21 yen, up from 140.42-45 yen late Tuesday. The dollar traded at 103.36-40 yen, up from Tuesday's 5 pm quote of 102.77-79 yen. Honda Motor Co advanced 3% to 4004 yen and Toyota Motor Corp 2% to 6136 yen. Sony Corp rose 1.5% to 1690 yen and Canon Inc 0.7% to 3070 yen.
Electronics maker Sharp advanced 7.9% to 370 yen on reports that the firm is expected to have booked a group net profit of 10 billion yen for the April-December period, swinging to the black for the first time in three years.
Game developer GungHo Online Entertainment gained 8.5% to 673 yen on reports the firm's consolidated operating profit is expected to surge nearly 10 times on the year to around 90 billion yen for the fiscal year ended December.
Advantest shares fell 4.4% to 1153 yen following the company's announcement that it expects a deeper loss of 35.9 billion yen for the fiscal year ending in March compared with a 2.5 billion loss previously forecast.
In Australia, shares of the Australian market rebounded as investors chased for bargain hunting following steep losses in the previous day, with the mining and resource shares among the biggest winner. The benchmark S&P/ASX 200 index added 53.90 points to 5229, while the broader All Ordinaries jumped 52.60 points to 5240.60.
Shares of Australian materials and resources companies rebounded sharply, with resources giant BHP Billiton up 1.5% to A$36.87, while rival Rio Tinto rose 2.3% to A$65.80 and Fortescue Metals Group rose 2.9% to A$5.30. Atlas Iron gained 10% to A$1.05 as it raised its fiscal-year output forecast for iron ore.
Retailers also advanced, with David Jones up 1.1% to A$2.89 and Harvey Norman Holdings up 2.7% to A$3.07, while building-materials firm James Hardie Industries rose 1.9% to A$13.15on the back of upbeat U.S. home-price data out overnight.
Telstra Corp shares declined 0.39% to A$5.10 as Australian broker BBY Ltd. cut its rating on the stock to underperform from buy.
In China, key benchmark indices of the China market advanced for second consecutive day, aided by calming concerns about liquidity crunch after central bank's money injection into the banking system. The Shanghai Composite Index provisionally ended 11.40 points higher at 2049.90, while CSI 300 Index grew 7.92 points to 2227.78.
The People's Bank of China added another 150 billion yuan to the interbank market on Tuesday's open market operation, pumping even more cash into the system to meet depositor demands ahead of the start of the Chinese New Year holiday on Friday. China's markets will be shut from Jan. 31 to Feb. 6 for the Chinese Lunar New Year holidays. The injection, conducted via 14-day reverse repos, follows last week's 375 billion yuan addition, transactions which included a combined 300 billion yuan addition via 21-day repos on Tuesday and Thursday.
Among SSE sectors, 8/10 sectors of the SSE index advanced, with information technology sector was best performer amongst the SSE sectoral peers, adding 3.2%, followed by utilities up 1.1%, healthcare up 0.9%, consumer discretionary up 0.9%, financials up 0.8%, telecommunication services up 0.3% and materials up 0.3%.
Datong Coal shares declined 2.6% to 4.85 yuan after the company estimated a loss of between 1.35 billion yuan ($223.1 million) and 1.45 billion yuan for 2013 because of lower thermal coal prices, declining sales, higher transportation fee and lower production, according to a statement to the exchange.
National Bureau of Statistics said on Tuesday that profits earned by Chinese industrial firms rose 6% in December to 942.5 billion yuan (US$155.84 billion) from a year earlier, slower than the annual growth of 9.7% in November. For the whole year of 2013, industrial profits totalled 6.28 trillion yuan, up 12.2% from the same period a year ago, the bureau said on its website. Profits had risen 13.2% in the first 11 months of 2013.
In Hong Kong, shares of city's market advanced for the first time in five consecutive sessions, as market sentiment was buoyed by receding worries about emerging economies. The benchmark Hang Seng Index provisionally finished 180.97 points higher at 22141.61.
Shares of Mainland banks listed in Hong Kong advanced, as the Chinese central bank on Tuesday injected more funds into the money markets, easing concerns for a liquidity squeeze before the Chinese New Year. Industrial & Commercial Bank of China grew 4.07% to HK$4.86, Agricultural Bank of China 2.70% to HK$3.42 and Bank of China 1.85% to HK$3.31.
Shares of technology companies rallied after Lenovo Group announced plan to expand into smartphone and server businesses. Chinese PC maker Lenovo leaped 4.58% to HK$10.96 after the company said that it would reorganize itself into four business groups and diversify its business. Software developer Kingsoft Corp. jumped 4.04% to HK$25.75 as the company said it plans to spin off its information-security software business for listing on the Nasdaq or the New York Stock Exchange. Other tech stocks also pushed higher, as Tencent Holdings added 5.8% to HK$532 and online game developer NetDragon Websoft rose 1.90% to HK$16.08.
In India, Indian stock market erased early gains and closed into red, logging its fourth straight loss, as earnings from Bharti Airtel and ICICI Bank failed to enthuse investors, amid caution ahead of the US Federal Reserve's possible decision to further trim stimulus.
After a better start, the Sensex rose over 140 points to 20,828.68 helped by firm Asian cues. However, sustained offloading of stocks weighed the 30-share Sensex closing lower by 36.21 points, or 0.18%, to 20,647.30.
ICICI Bank edged lower in choppy trade as the bank's ratio of net non-performing asset rose to 0.81% as on 31 December 2013 from 0.73% as on 30 September 2013. The stock lost 1.44% at Rs 1,004.50. The scrip hit high of Rs 1,040.95 and low of Rs 996.20. ICICI Bank's net profit rose 12.53% to Rs 2532.21 crore on 15.4% increase in total income to Rs 14255.96 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 29 January 2014.
Sesa Sterlite lost 3.03%. On a consolidated basis, Sesa Sterlite reported a net profit Rs 1868.29 crore on total income of Rs 19912.90 crore in Q3 December 2013. The result was announced after market hours on Tuesday, 28 January 2014. The Q3 December 2013 figures are non-comparable with Q3 December 2012 as the merger of copper producer Sterlite Industries (India) and iron-ore miner Sesa Goa, to form Sesa Sterlite took effect in August 2013.
Bharti Airtel reversed initial gains in volatile trade as the company's Q3 December 2013 earnings fell short of market expectations. The stock lost 1.24% to Rs 302.50. The stock hit a high of Rs 314.80 and low of Rs 291.25. As per International Financial Reporting Standards (IFRS), Bharti Airtel's consolidated net profit surged 115.1% to Rs 610 crore on 13.3% increase in total revenue to Rs 21939 crore in Q3 December 2013 over Q3 December 2012.
Elsewhere in the Asia Pacific region, New Zealand's NZX50 index added 0.7%. South Korea's KOSPI rose 1.24%. Indonesia's Jakarta Composite index added 1.74%. Malaysia's KLSE Composite added 0.45%. Singapore's Straits Times index fell 0.47%. Taiwan's market closed for holiday.
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