The MSCI Asia Pacific Index slipped 0.1% today after climbing 6.6% in the past 10 days amid signs the global economy is improving.
Market swung between gain losses throughout the day as investors were opting wait-and-see mode ahead of next week's Federal Open Market Committee meeting. Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
Among Asian bourses, Tokyo share market closed down as investors booked profit after a strong rally early this week driven by upbeat Chinese economic data and Japan's winning bid to host the 2020 Olympics. Meanwhile, weaker than expected Japanese machinery orders and yen strengthening against the US dollar also triggered selloff. The benchmark Nikkei 225 index closed 37.80 points higher at 14387.27, while the Topix index of all first-section shares fell 4.89 points to 1184.36.
The Cabinet Office of Japan said on Thursday that Japan's core private-sector machinery orders, which exclude volatile demand for ships and from electric utilities, totalled Y777.2 billion in July, down by 0.03% from Y777.4 billion in June, when they fell 2.7% following a 10.5% surge in May. Orders from manufacturers rose 4.8% in July, the third straight m/m rise led by demand for generators at paper mills and non-ferrous metal makers. Those from non-manufacturers excluding ships, power firms were flat (up only 0.02%) after -17.5% in June and +25.4% in May due to lower orders for train cars from transportation firms and for computers from the financial sector.
Retailers' shares were lower in Tokyo on media reports that Prime Minister Shinzo Abe had decided to go ahead with a planned sales-tax hike, though a senior official later said no final decision had been made. Among the major retail names, Takashimaya Co fell 1.4% to 925 yen, J. Front Retailing Co. lost 1.1% to 819 yen and Aeon Co dropped 0.6% to 1367 yen, though Fast Retailing Co managed to rise 1.6% to 35300 yen.
Mitsubishi Motors Corp. shares were slapped down 8.1% to 1028 yen after the Nikkei reported it was considering a public share offering.
Sharp Corp shares tumbled 6% to 363 yen on reports that the struggling electronic maker is preparing to procure about 150 billion yen through a public offering of new shares. Sharp also plans to procure about 20 billion yen through a third-party allocation of new shares to three business partners (Lixil Group Corp, Makita Corp and Denso Corp) eventually boost its capital by a total of around 170 billion yen.
In Australia, Australian share market rose for the fifth straight day in row, even after weak employment data, helped by gains in shares of industrials, retailers and mining blue chip companies. The broader All Ordinary index was higher by 0.15% to finish at 5242.50, its highest level since June 2008.
Australia recorded its first back-to-back jobs decline in more than two years, underscoring the challenge for Prime Minister-elect Tony Abbott to boost the nation's economy. The number of people employed fell 10,800 in August from the previous month, when it dropped a revised 11,400, the statistics bureau said in Sydney. That compares with the median estimate for a 10,000 increase in a Bloomberg survey of 28 economists. Unemployment rose to 5.8% from 5.7%
Myer (MYR) has reported a near 9% drop in full year profit to A$127.2M. The company has blamed economic conditions for the result and doesn't expect a full turnaround until FY15. MYR shareholders will receive an 8c per share final dividend. MYR was down 4% to A$2.765.
Sigma Pharmaceuticals (SIP) reported a 38% drop in 1H profit to A$16.3M. Sales revenue rose 3% to A$1.46 billion despite federal government changes to the PBS (pharmaceutical benefits scheme). SIP shares were up 1.6% to A$0.645
In New Zealand, NZ shares closed modest higher today, with the benchmark NZX50 up by 0.14% to 4641.50, after the Reserve Bank of New Zealand, which kept its key interest rate at a record-low 2.5% today, said it is likely to raise borrowing costs in 2014.
New Zealand's central bank left interest rates on hold at 2.5% on Thursday, a level where it has remained for more than two years, and said new curbs on mortgage lending should allow it to keep rates at a record low for the rest of the year, although rate hikes are on the horizon as the economy improves. Rate hikes will likely be required next year, Reserve Bank of New Zealand Governor Graeme Wheeler said.
In South Korea, shares in Seoul market closed flat, with the benchmark KOSPI up by just 0.21 point to 2004.06, in spite of Bank of Korea kept its benchmark rate unchanged.
The Bank of Korea held its key interest rate steady on economic resilience that is attracting foreign capital and made the won the best performer in Asia over the past month. Governor Kim Choong Soo and his board kept the seven-day repurchase rate at 2.5% for a fourth straight month, the central bank said in a statement in Seoul today.
Samsung Electronics Co added 1.1% after archrival Apple's weakness in U.S. trading Wednesday.
In China, headline indices on the Chinese market rose for straight fifth day, as banks and brokerages rallied on Premier Li Keqiang's reassurance over China economic growth and financial reform plans. Material and property companies declined. The Shanghai Composite Index rose 0.6% to 2,255.60 and CSI index grew 1% to 2507.46.
Premier Li Keqiang reassured the world yesterday about the Chinese economy's health, saying the country will reach its target of 7.5% growth this year despite complex economic situations across the globe. Li made the remarks while addressing the opening ceremony of the three-day Summer Davos in north-eastern China's port city of Dalian, pointing to growing signs of stabilization in the world's second-largest economy during the past two months.
China's economic data in August pointed to a firming economy, Li said, adding that the country will push ahead with interest rate reform and open up its financial industry further. China's main economic indicators, including the leading indicators, such as PMI, PPI, industrial output, power consumption and freight traffic, in the recent period and particularly in August, all showed signs of recovery, Li said.
Li said the government was, instead, determined to release market dynamics through reforms. He said he was determined to push ahead with financial reforms, with interest rate liberalization a first priority, as well as promoting securitization of bank assets and opening up the financial sector to domestic and foreign investors.
Shares of financial companies were sharply higher in Shanghai, buoyed by financial reform hopes after Premier Li said in a speech at the World Economic Forum in the northeast city of Dalian on Wednesday that China will push forward interest-rate and exchange-rate reforms and the internationalization of the yuan while promoting the currency's convertibility under the capital account. Shanghai Pudong Bank surged 8.7% to 12.25 yuan, Ping An Bank Co. gained 6.2% to 13.47 yuan and China Citic Bank Corp added 2.5% to 4.16 yuan.
Shares of Chinese brokerages companies were also higher on optimism increased trading volumes will boost profit. Citic Securities, China's biggest listed brokerage, climbed 3% to 13.56 yuan. Haitong Securities Co, the second largest, gained 4.2% to 13.27 yuan. GF Securities Co. rose 2.5% to 12.92 yuan.
In Hong Kong, HK shares saw modest gains in see-saw trade on Thursday, September 12, 2013, with financials, realty and resources blue chips offering a bright spot. The Hang Seng Index rose 16.58 points to finish at 22953.72 and the Hang Sang China Enterprises Index was up 0.82 point to 10637.53. Among the 50 HK blue chips, 27 fell and 22 rose, while remaining 1 stock unchanged. China Shenhua Energy Co ended down 3.7% to HK$26, becoming the biggest blue-chip loser, after State Council aimed to cut coal's portion of the fuel mix to below 65% by 2017. Cosco Pacific jumped 2.4% to HK$11.30, being the largest blue-chip gainer.
In India, Indian benchmark indices hovered in a narrow range in the negative terrain in afternoon trade. The S&P BSE Sensex was down 159.83 points or 0.8%, up close to 20 points from the day's low and off about 220 points from the day's high.
Most of Indian IT stocks declined on recent recovery of rupee against the dollar. Financial Technologies (India) (FTIL) spurted on high volume after Securities and Exchange Board of India renewed the license of MCX Stock Exchange for a period of one year beginning 16 September 2013. Capital goods pivotals rose on renewed buying.
Elsewhere, Indonesia's JKSE Composite rose 0.07%, Singapore's Straits Times Index added 0.47% and Malaysia's KLSE Composite jumped 0.17% and Taiwan's Taiex gained 0.2%.
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