The focal point for markets had been haven trades into the end of last week, with a double dose of jitters ahead of Hurricane Irma's landfall and speculations of another missile launch by North Korea having the country's founding day over the weekend. While Hurricane Irma did make a roundabout upon the south-eastern end of US, the market found some relief in the fact that the hurricane had missed the expected category five that would have worsened the damages. The US dollar index exhibited the most apparent reaction, ticking up to 91.50 levels at the start of the week from lows of just above 91.00 on Friday.
Meanwhile relieving the market of the risk-off sentiment had also been the absence of another missile launch over the weekend by North Korea. Expectations have been built over the week for the North Korea to dish another display of military might and the true concern lies with the frowns that would have arrived from neighbouring countries and the US. Havens have thus far retracted from last Friday's highs with the likes of gold falling back below $1340 and 10-year treasury yields up at 2.09%.
Japan's core machinery orders rose in July at the fastest pace since January 2016, rebounding from a third straight month of falls and an encouraging sign of the increased capital investment needed for sustained economic recovery. Japan's core private-sector machinery orders, exclude those for ships and from utilities because of their volatility, increased 8% to 853.3 billion yen ($7.9 billion) on month in July 2017, following a 1.9% drop in June, boosted by a recovery in the manufacturing sector and strong demand for train cars, according to the Cabinet Office. Despite the sharp growth, the Cabinet Office retained its assessment that the recovery in machinery orders "came to a standstill." The machinery orders data are considered an indicator of capital spending but tend to oscillate. Orders from the manufacturing sector increased 2.9% to 355.7 billion yen, lifted by the ship-building and nonferrous metal sectors. Boosted by demand for train cars, orders from the nonmanufacturing sector rose 4.8% to 472.3 billion yen. Overseas demand for Japanese machinery, an indicator of future exports, gained 9.1% to 995.9 billion yen.
China's consumer inflation picked up in August, driven by higher food prices, while the factory-gate prices also rose, fueled by rising commodity costs. Consumer price index (CPI), a main gauge of inflation, accelerated more than expected to a seven-month high of 1.8% in August, up from July's 1.4%, beating market expectation of 1.6%, according to data released by the National Bureau of Statistics (NBS) on Saturday. On a monthly basis, the index was up 0.4% last month. For the first eight months of the year, CPI climbed 1.5% from one year earlier. On a monthly basis, CPI was up 0.4% last month. Excluding volatile food and energy prices, the core CPI increased 2.2% year-on-year in August, up slightly from July's 2.1%. The core CPI has been holding steady at a little above 2% since March.
Among Asian bourses
Australia Market powers by banks
Australian equity market finished session higher, as investors took some comfort due to absence of another missile launch over the weekend by North Korea and Hurricane Irma's end. The benchmark S&P/ASX200 index was up 40.5 points, or 0.7%, at 5,713.1 points, with all sectors except for mining and gold making gains.
The focal point for markets had been haven trades into the end of last week, with a double dose of jitters ahead of Hurricane Irma's landfall and speculations of another missile launch by North Korea having the country's founding day over the weekend. While Hurricane Irma did make a roundabout upon the south-eastern end of US, the market found some relief in the fact that the hurricane had missed the expected category five that would have worsened the damages. The US dollar index exhibited the most apparent reaction, ticking up to 91.50 levels at the start of the week from lows of just above 91.00 on Friday.
Meanwhile relieving the market of the risk-off sentiment had also been the absence of another missile launch over the weekend by North Korea. Expectations have been built over the week for the North Korea to dish another display of military might and the true concern lies with the frowns that would have arrived from neighbouring countries and the US. Havens have thus far retracted from last Friday's highs with the likes of gold falling back below $1340 and 10-year treasury yields up at 2.09%.
The financials were the biggest gainers, with the big four banks - Commonwealth Bank, National Australia Bank, Westpac and ANZ - lifted between 1.4 and 2.2%, led by ANZ. Investment bank Macquarie Group rose 3% to A$85.15 after flagging an improved first-half result due to stronger performance fees.
Energy stocks were mixed, after global oil prices dropped on Friday due to concerns Hurricane Irma would reduce oil demand in the US in the short term. Woodside Petroleum was down 0.1% at A$28.85, and Santos lifted 2.6% to A$3.95.
Materials and resources stocks declined after base metal prices tumbled between 3-5%. In the resources sector, global miner BHP Billiton dipped 1.8% to A$26.80, Rio Tinto slipped 1.42% to A$67.53, and Fortescue Metals backtracked 0.7% to A$5.81.
Gaming firm Tabcorp climbed 2.7% to A$4.16 after independent expert Grant Samuel confirmed Tatts shareholders are getting a fair deal in the proposed A$11 billion merger of the two gaming groups, moving it one step closer. Tatts closed 1% higher at A$3.95.
Nikkei rises 1.41%
The Japan share market closed higher, as investors sentiment boosted up by a bit easing geopolitical tensions over North Korea, yen's weakening against the dollar and better than expected core private-sector machinery orders for July 2017. The majority of TSE industry categories closed in positive territory, with pharmaceutical, electric appliance and rubber product-linked issues comprising those that gained the most by the close of play. The 225-issue Nikkei Stock Average gained 270.95 points, or 1.41%, to 19,545.77.The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, added 18.72 points, or 1.17%, to 1,612.26. On the main section, totalled 1,498.64 million shares changed hands, down from Friday's volume of 1,860.42 million shares. The turnover totalled 1,989.9 billion yen.
Megabank groups Mitsubishi UFJ and Sumitomo Mitsui as well as insurers Dai-ichi Life and Tokio Marine were upbeat thanks to buybacks. The weaker yen pushed up export-oriented names, including automakers Toyota, Honda, Nissan and Subaru, camera maker Canon, electronics maker Panasonic and electronic parts supplier TDK. Other major winners included electronic parts maker Rohm, industrial robot maker Yaskawa Electric and Ono Pharmaceutical. By contrast, defense-related Ishikawa Seisakusho and Howa Machinery met with selling as geopolitical concerns over the Korean Peninsula retreated.
China Market ends up; Electric car industry shares lead
The Mainland China equity market advanced, with shares of new-energy auto firms and battery makers leading rally after the Chinese government announced plans to boost the development of new energy cars. The Shanghai Composite Index added 0.3%, or 11.18 points, to 3,376.42, while the CSI 300, which tracks large caps listed in Shanghai and Shenzhen, was little changed at 3,825.65. The Shenzhen Composite Index rose by 0.8%, or 15.86 points, to 1,991.73, while the Nasdaq-style ChiNext increased 0.6%, or 11.11 points, to 1,896.38.
Shares of new-energy vehicle and battery shares advanced on reports that China is working on a timetable to ban production and sales of fossil-fuel vehicles. Xin Guobin, vice minister of industry and information technology, said on Saturday that China would unveil a new-energy credit policy that envisages electric and hybrid gasoline-electric vehicles to take up 8% of each camaker's output next year.
BYD, China's largest electric-vehicle maker, gained over 7% in both markets in Shanghai and Shenzhen, while Shanghai-listed Guangzhou Automobile Group Co, another Chinese automaker manufacturing new energy cars, was also boosted by 4.67% to 27.33 yuan. BYD on Monday won the bidding of 822 electric bus procurement plan by a Shenzhen-based bus operator, shortly after the announcement earlier this month that it will provide above 400 e-vehicles to another local public transportation company.
In addition, other companies related to the industry, such as raw materials, battery and charging station makers, all went up. For instance, Shenzhen Desay Battery Technology rallied 3.57% while Sunwoda Electronic ended up 5.44%. Ningbo Joyson Electronic Corp, a car component maker, jumped by the daily limit of 10% to 35.27 yuan
Hong Kong Stocks extend gains
The Hong Kong stock market extended gains, as market sentiment brightened by multiple factors including eased geopolitical tensions, reform of state-owned enterprises and PBOC reserve requirement cut for financial institutions. The Hang Seng Index closed up 1%, or 286.7 points, at 27,955.13. The Hang Seng China Enterprise Index, known as the H-share index, also rose 0.6% to 11,221.13.
Market sentiments boosted up by calming concerns over North Korea after Pyongyang's decision to hold a banquet, concert and performances instead of test-firing another missile on Saturday to celebrate national day. Optimism was also prompted by the merger between state-owned construction giant China National Building Material Co and smaller rival Sinoma, which is another case of China's reform of inefficient state-owned enterprises.
Meanwhile, supporting the gain was reports indicating that the People's Bank of China will cut the cash reserve requirements for financial institutions settling foreign-exchange forward yuan positions to zero from 20%, sparkling expectations for the loosening of capital controls and boosting market sentiment.
Index heavyweight Tencent contributed the most to the Hang Seng Index's advance with a 2.8% jump.
Banks and insurers gained, led by AIA, which rose 1.5%, and HSBC, which was up 1.3%. Bank of China added 1.2%, and China Construction Bank rose 1%. Property developers were also up, with Evergrande rising 10.4% to HK$24.90 and Country Garden up 1.8% higher to HK$12.16. Sun Hung Kai Properties gained 1.4% to HK$135.60.
Shares related to Apple's next iPhone, due to be released on Tuesday, were active. AAC Technologies climbed 2.7% to HK$139.6 after UBS raised the target price to HK$158 from HK$145, while Q Technology plunged 14%.
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