Asia Pacific share market slid on Monday, 18 January 2016, on the back of another Wall Street sell-off on Friday after weak US economic data and a massive fall in oil prices stoked further worries about a global economic downturn.
Offshore stock markets fell heavily on Friday as investors reacted to new 12-year lows for oil prices and a 3.6% drop in China's key Shanghai Composite Index. On Wall Street Friday, the S&P 500 fell 2.2% to a 15-month low, the Dow Jones Industrial Average dropped 2.4% and the Nasdaq Composite declined by 2.7%. The falls mean the S&P 500 and the Dow are both down about 8% this year, while the Nasdaq has lost more than 10%.U.S. stock exchanges will be closed on Monday in observance of Martin Luther King Jr. Day.
Crude prices faced fresh pressure on Monday after international sanctions against Iran were lifted over the weekend, allowing Tehran to return to an already over-supplied oil market. Iranian officials said on Sunday the country was preparing to raise output by 500,000 barrels a day. Brent crude, the international oil benchmark, shed as much as 4.3% in Asian trading to $27.70 a barrel, the lowest since November 2003. That followed a 6.7% slump on Friday in New York and a decline of 13.7% for the whole of last week. West Texas Intermediate, the US benchmark, was down 1.5% in Asia at $28.99.
Investors were concerned that the recent lifting of sanctions against Iran could push more oil into the global market, where prices are depressed by a supply glut as a result of the development of shale oil in the US and Opec's refusal to curtail production.
Among Asian bourses
Australia market ends softer
Australian share market ended at lowest levels not seen since, as risk aversion selloff fuelled on tracking drop in global stock markets, with energy, materials and resources stocks being major losers on concerns about Chinese economic growth and plummeting oil prices. At the close, the benchmark S&P/ASX 200 index declined 34.10 points, or 0.7%, to 4858.70 points, while the broader All Ordinaries index dropped 36.70 points, or 0.74%, to 4911.80 points. The local market has lost over 8% since the start of 2016. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, increased 2.3% at 24.06, suggesting 7% swing in the equity benchmark index in the next 30 days.
Shares of energy and material companies suffered heavy selloff on declining commodity prices and concerns about China's economic growth. Among top oil explorer and refiners, Woodside Petroleum added 2.6% to A$26.29, Santos 8.4% to A$2.63, and Oil Search 5.1% to A$6.01. Among major miners, BHP Billiton sank 2.9% to A$14.63, Rio Tinto 2.1% to A$38.69, and iron ore miner Fortescue Metals 1.3% to A$1.56.
Financial stocks extended losses on lingering worries about the possibility of higher interest rates in the US and China's economic slowdown would affect Australia's domestic economy and housing market. Commonwealth Bank of Australia declined 0.6% to A$78.39, Westpac Banking Corp 1% to A$30.77, National Australia Bank 1.2% to A$26.69, and Australia & New Zealand Banking Group 2% to A$24.41.
Shares in No.1 grocery chain Woolworths jumped 4.4% to A$23.65 after it announced plans to sell or wind up its hardware unit 'Masters' due to ongoing losses. At the same time, conglomerate Wesfarmers announced it was expanding with a A$705 million acquisition of UK-based home improvement retailer Homebase, sending its stocks 2% higher at A$40.12.
Nikkei follows global selloff
Japan share market ended sharply lower, extending last week's global rout on following drop in offshore markets on last Friday, worries about tumbling oil prices and the slowing Chinese economy. Meanwhile, appreciation of yen against the basket of major currencies accelerated the sell-off. Total 30 out of 33 TOPIX sectors recorded losses, with Information & Communication, Real Estate, Iron & Steel, Securities & Commodities Futures, Banks, and Mining issues being major losers. The 225-issue Nikkei Stock Average ended 191.54 points, or 1.12%, down at 16955.57. The Topix index of all Tokyo Stock Exchange First Section issues dropped 14.52 points, or 1.04%, to 1387.93.
Shares of export-related companies fell further due to heavy sell orders after yen briefly dived below 116 level against the greenback. A stronger yen is usually considered negative for Japan's exporters as it trims earnings when translated back into the home currency. Export-oriented stocks such as Toyota, Nissan and Sharp finished in the red, down between 0.25 and 1.60%. Index heavyweight Fast Retailing closed down 0.73%.
Energy producers were down after crude oil prices dipped further in Asian deal today. Oil explorer Inpex Corp. slid 1.5% and Japan Petroleum Exploration Co. dropped 2.1%.
Shares of Toshiba finished up 2.45% after news that Fujifilm plans to bid for the struggling electronics manufacturer fully owned medical equipment unit, Toshiba Medical Systems.
China Market ends in positive terrain
Mainland China stock market ended in the positive territory after recouping initial losses, as bargain buying resumed on hopes of further intervention from government-backed authorities, with real estate shares leading the rebound on data showing continuous recovery in the property sector. China stocks opened sharply lower on Monday but managed to erase losses by midday and managed to hold gain during afternoon trade. The local market gauge fell into a bear market for the second time in seven months on Friday. The Shanghai Composite Index rebounded 0.44%, or 12.87 points, to close at 2913.84. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, rose 12 points, or 0.38%, to 3130.73. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.9%, or 34.20 points, to close at 1830.33. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, rose 2.94%, or 62.03 points, to close at 2174.93.
Shares of technology companies registered biggest advance among 10 industry groups, due to bottom fishing on heavily battered stocks. GoerTek Inc. soared 6.1%. Hundsun Technologies Inc. gained 4.8%. Siasun Robot & Automation Co. led the rally in the ChiNext, surging 6.8%.
Shares of property developers gained, with Gemdale Corp. leading rally, up 2.8%, after a home-price recovery spread to more cities and speculation of more easing measures after China's politburo last month vowed to reduce home inventory as one of its key tasks in 2016.
Data from the National Bureau of Statistics (NBS) showed on Monday that China's real estate sector warmed up further in December 2015, with more major cities reporting month-on-month rises in new home prices. Of the 70 large and medium-sized cities surveyed in December, new home prices climbed month on month in 39, up from 33 in the previous month. Meanwhile, 27 reported month-on-month price declines, level with that in November, according to NBS data. On a yearly basis, 21 cities posted new home price increases and 49 reported falls, the same with that in November.
Hong Kong Market closed down
The Hong Kong stock market declined further in volatile trading, as risk aversion selloff continued on following a big sell-off in Wall Street on Friday after weak economic data out of the U.S., concerns about China's economy, and decline in commodity prices, and fears about the government's ability to manage an economic transition. The Hang Seng Index (HSI) opened down 233 points at 19,287. It then hit a 3.5-year low of 19,195, falling as much as 325 points. The benchmark Hang Seng Index has lost 283.32 points, or 1.45%, to 19237.45 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, sank 101.47 points, or 1.23%, to 8134.81 points. Turnover increased to HK$75 billion from HK$73.7 billion on Friday. The HSI Volatility Index (VHSI), which measures the cost of options on the Hong Kong equity gauge, rose 6.8% to 31.40 points, suggesting 9% swing in the equity benchmark index in the next 30 days.
Shares of energy players were under pressure on tracking weakness in crude oil futures. PetroChina (00857) fell 2.1% to HK$4.29 and CNOOC (00883) dropped 4.5% to HK$6.74. Kunlun Energy (00135) dived 1.7% to HK$5.37. Sinopec Corp (00386) slid 0.3% to HK$4.02.
The PBoC will impose reserve requirement ratio on offshore Chinese commercial banks' RMB deposits starting from next week. It is expected that revenues for RMB business in Hong Kong will be weakened. BOCHK (02388) dipped 4.4% to HK$20.75. BEA (00023) dipped 2.5% to HK$23. Dah Sing Banking (02356) fell 5.2% to HK$11.94. HSBC (00005) slid 3.1% to HK$54.35 on talks that the global banking giant plans to withdraw from Lebanon. StanChart (02888) dropped 3.4% to HK$55.4.
Sensex closes at lowest level since May 2014
Indian stock market ended steep lower on growing concerns about the health of the world economy coupled with a steep decline in the oil prices while the fall in country's exports for the 13th consecutive month has dented the sentiments across the board. The S&P BSE Sensex fell 266 points lower to end below its crucial psychological level of 24,500 on Monday, while broader CNX Nifty closed below 7,400 for first time since June 02, 2014. The 30-share index ended the day at 24,188.37, down 266.67 points, while broad-based 50-share index quoted 7,351.00, down 86.80 points at close.
The latest data showed that India's merchandise exports declined for the thirteenth straight month in December 2015. Exports fell 14.7% to $22.30 billion in December 2015 over a year ago, data released by the government today, 18 January 2016 showed. The trend of falling exports is in tandem with other major world economies, according to a government statement. Imports fell 3.9% to $33.96 billion. The trade deficit widened 27.1% to $11.7 billion in December 2015 from $9.18 billion in December 2014.
Energy stocks such as Reliance Industries, ONGC, BPCL and Cairn India were the biggest drag on the index. RIL stock was the top Sensex loser and lost 5.14%.
The stock of Wipro ended flat after falling over 2% after the IT major posted 1.8% year-on-year rise in its consolidated net profit to Rs 2,234.1 crore for the quarter ended December 31, 2015.
Lincoln Pharmaceuticals shares hit lower circuit limit after the company informed BSE that its highest selling Chloramphenicol Sodium Succinate injection has been banned in Tanzania and the company's registration has also been cancelled there. The share price of the company fell 20 per cent to Rs 179.20 on BSE.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.63% to 7811.18. South Korea's KOPSI slid 0.02% to 1878.45. Malaysia's KLCI fell 0.36% to 1622.64. Singapore's Straits Times index sank 1.4% at 2630.76. Indonesia's Jakarta Composite index slipped 0.94% to 4481.28. New Zealand's NZX50 fell 1.1% to 6101.44.
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