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Asia Pacific share market closed mostly higher on Wednesday, 30 November 2016, on following upbeat cues from Wall Street overnight, but gains were capped as investors remained cautious ahead of an OPEC meeting and Italy's referendum result.
Market participants risk sentiments muted on growing concerns for an interest rate increase in December by the U.S. Federal Reserve on the back of an upward revision to U.S. gross domestic product data for July-September.
The US economy grew at the fastest pace in over two years in the third quarter as consumers and government stepped up their spending and exports surged. Gross domestic product expanded at a 3.2% annual rate in the Commerce Department's second reading, released Tuesday. That is the strongest pace since the second quarter of 2014. It beat the consensus estimate of a 3.1% growth rate. Consumer spending rose 2.8% in the quarter, stronger than the original estimate of 2.1%. The consumer sector accounts for two-thirds of the economy, and that has been bolstering economic growth for several quarters. A measure of core inflation, which excludes volatile categories like food and energy, rose 1.7% during the quarter, unrevised from the initial reading. That is inching closer to the Federal Reserve's 2% target. Most economists and investors expect the central bank to raise the benchmark interest rate at its December meeting as inflation firms and economic growth remains sturdy.
Also, sentiments were subdued ahead of key events from OPEC talks to the series of US economic events and Italy's referendum.
The Organization of the Petroleum Exporting Countries (OPEC) will meet in Vienna later on Wednesday to discuss a planned production cut in an effort to curb overproduction that had dogged markets and more than halved prices since 2014. Many analysts believe OPEC will cobble together a deal at its meeting in Vienna to cut some production. But doubts lingered as Iran and Iraq, OPEC's second-largest and third-largest producers, have resisted pressure from the group's de facto leader Saudi Arabia to curtail output.
A series of key events, including United States Automatic Data Processing Inc.'s private-sector jobs report for November later in the day. Friday will see the most-watched set-piece data point of the month: the non-farm payrolls report.
Italians vote on constitutional changes on Dec. 4 that would limit the power of the upper house and make it easier for governments to pass legislation. Prime Minister Matteo Renzi has said he will resign in case of a "no" result. New elections, if held, could bring to power the Five Star Movement, which has said it wants to hold a referendum on euro membership.
Among Asian bourses
Australia Market ends softer
Australian share market closed lower today, as falling oil and metal prices hit miners and energy stocks. At the closing bell, the benchmark S&P/ASX 200 index fell 17 points, or 0.31%, to 5440.50, while the broader All Ordinaries index declined 18.10 points, or 0.33%, to close at 5502.40.
Energy stocks extended losses to a third straight session on following drop in commodity prices. Crude oil slumped about 4% on Tuesday, with Iran and Iraq at loggerheads with Saudi Arabia a day ahead of Organization of the Petroleum Exporting Countries' meeting for a deal to cut production. Among energy players, Woodside Petroleum declined by 2.4% to A$29.62, Origin Energy 1.7% to A$5.94, and Santos 3% to A$3.93.
Mining stocks also closed softer, dragged by BHP Billiton, down 4.1% to A$24.41, and Rio Tinto, down 4.4% to A$57.75, after Copper, lead and zinc were sold off on Tuesday on the view that a post-US election rally had become overstretched, while a rally in steel and iron ore prices was stemmed after Chinese exchanges imposed curbs to tame speculative trade. Iron ore miner Fortescue Metals Group, which is particularly sensitive to the iron ore price, dropped 5.3% to A$5.87.
Shares of financial players cushioned some of the pressure on the benchmark index, with Big Four banks being top gainers. Among major banks, Westpac added 0.2% to A$31.27, Australia & New Zealand Banking Group 1.1% to A$28.41, Commonwealth Bank of Australia 1.1% to A$78.65, and National Australia Bank 0.6% to A$28.93.
Nikkei holds gain line
The Japan share market finished edge above the neutral line, after official data indicated Japan's industrial production rose for a third consecutive month in October, with a slight gain just beating the median forecast of economists, as the nation's exports compensate for weak domestic spending. Market gains were, however, capped ahead of key events from OPEC talks to the series of key economic events and Italy's referendum. Total 17 out of 33 TSE industry category on the main section gained ground, led by Securities & Commodities Futures, Glass & Ceramics Products, Fishery, Agriculture & Forestry, and Construction issues, whilst Iron & Steel, Nonferrous Metals, Mining, and Oil & Coal Products issues being major losers. The benchmark Nikkei 225 index added 0.01%, or 1.44 points, to close at 18,308.48, while the broader Topix index of all first-section issues gained 0.06%, or 0.86 point, to 1,469.43.
Stocks got off to a firmer start after U.S. equities staged a rebound on Tuesday. Investors apparently took heart from brisk U.S. economic indicators, including an upward revision to gross domestic product data for July-September. The yen's weaker moves against the dollar also helped increase investor appetite for buying on dips. But the market's topside was limited, with the key market gauges fluctuating around the previous day's closing levels, amid a growing wait-and-see mood ahead of key events, including a meeting of the Organization of the Petroleum Exporting Countries in Vienna later on Wednesday. The market was also weighed down by worries about a series of key events, including closely watched economic indicators to be released in the United States later in the day, including Automatic Data Processing Inc.'s private-sector jobs report for November.
Shares of export-oriented firms inclined as the yen, which is often bought as a safe haven in time of uncertainty, depreciated to 113-level against greenback. A softer yen is positive to the stock market as it amplifies into exporters' profitability. The weaker yen helped lift export-oriented names, such as automakers Toyota, Suzuki and Honda, electronics giant Panasonic and camera maker Canon. Also on the plus side were mobile phone carriers SoftBank Group and KDDI.
By contrast, shares of steel producers JFE Holdings, Nippon Steel & Sumitomo Metal and Kobe Steel met with profit-taking. Oil companies JX Holdings, Idemitsu and Japex were downbeat as crude oil futures fell sharply in New York on Tuesday amid weakening hopes for an agreement on reducing oil production at the upcoming OPEC meeting.
China Stocks end 1% down
Mainland China stock market closed down today, as concerns over liquidity squeeze after official data showing the People's Bank of China injected a mere 15 billion yuan in November through open market operations, compared with October's 441 billion yuan. Most of SSE sectors declined, with energy and materials issues being major losers. The blue-chip CSI300 index fell 0.73%, to 3,538. The Shanghai Composite Index lost 1% to 3,250.03 points, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.16% to 2,106.91. For the month, CSI300 surged 6%, its best monthly gain in eight months, while the SSEC gained 4.8%.
Shares of banking sector fell broadly on profit booking, with China Citic Bank falling 3% to 6.71 yuan and China Merchants Bank lower by 1% to 18.56 yuan. ICBC and China Construction Bank both declined 1.1% to 4.52 yuan and 5.57 yuan respectively.
China United Network Communications (China Unicom) soared 8.3% to 6.66 yuan, after reports that the state-owned telecoms firm has finalised its mixed-ownership plan to introduce private capital to the company, despite China Unicom issuing a statement on Wednesday saying uncertainty still existed for the plan. Reports also said the plan will be filed to the government for approval and Baidu, Alibaba, and Tencent, China's largest internet companies, were invited to become shareholders.
Real estate shares rebounded after Tuesday's drop - a reaction to the announcement of fresh home buying restrictions in Shanghai. The sector was lifted by index heavyweight China Vanke Co, which jumped 3.4% after China Evergrande Group announced late on Tuesday that it had bought more shares in China's biggest property developer.
Hong Kong Stocks rise on firm Wall Street lead
The Hong Kong stock market ended higher today, as risk sentiments buoyed by tracking gains in Wall Street overnight and ahead of next week's unveiling of the much-anticipated Shenzhen-Hong Kong Stock Connect, which will offer foreign individual investors access to the tech-heavy Shenzhen market for the first time. Investors apparently took heart from brisk U.S. economic indicators, including an upward revision to gross domestic product data for July-September. But gains were capped as investors remained cautious ahead of an OPEC meeting and Italy's referendum result. Most sectors in Hong Kong rose, with telecommunication shares among the best performers, while energy and the raw materials sector suffered the most damage. The Hang Seng Index ended up 0.23%, or 52.70 points, to 22,789.77 while the Hang Seng China Enterprises index fell 0.08%, or 8.15 points, to 9,838.06. Turnover increased to HK$88.9 billion from HK$68.7 billion on Tuesday.
China Unicom (00762) soared 7% to HK$9.42 becoming the best performing blue chip. Market talks suggested that its parent company's mixed ownership proposal has been concluded, but Unicom in afternoon clarified that the proposal is still being discussed. China Telecom (00728) and China Mobile (00941) also climbed 4% and 1% to HK$3.75 and HK$84.65.
Hengan (01044) slid 7% to HK$61.05. It was the worse blue-chip loser after the company said its CFO Loo Hong Shing has resigned and Xu Da Zuo has taken over the seat. But UBS said Xu has no experience in dealing with investors, and said it appears to be a surprise to the market.
Shares of casino companies inclined ahead of Macau gaming authorities announcement of November's gross gaming revenues (GGR) tomorrow. Galaxy Entertainment (00027) added 2% to HK$38.5. Sands China (01928) jumped 2% to HK$38.2.
Sensex builds on gains
Indian market rallied for the fourth consecutive session, with the benchmark Sensex surging 259 points to end at a fresh two-week high of 26,652 driven by upbeat global cues on strengthening oil prices. The 50-share NSE Nifty settled 82.35 points, or 1.01% higher at 8,224.50 after shuttling between 8,234.25 and 8,139.25. Consumer durables, banking, finance, capital goods, industrials and power sectors were the major winners.
Sentiment was upbeat on hopes that the government and RBI will announce more measures to contain the fallout of demonetisation while globally, oil prices spiked ahead of a crucial OPEC meet where producers are set to discuss an output cut.
UCO Bank rose 1.04% to Rs 33.95 after the bank said it has allotted 7.17 crore equity shares to Life Insurance Corporation of India at an issue price of Rs 37.74 per equity. The shares issued to Life Insurance Corporation of India (LIC) will be under lock-in for a period of one year from the date of trading from the stock exchanges. LIC owned 11.88% stake in UCO Bank end September 2016.
Yes Bank rose 2.38% after the bank announced the launch of SIMsePAY, a unique innovation that allows any account holder to do money transfers, pay utility bills and other mobile banking services, without the need for smart phones or internet.
India's gross domestic product (GDP) for the quarter ended September 2016 (Q2) is slated to be released today, 30 November 2016. India's GDP growth rate slowed to 7.1% in Q1 June 2016 from 7.9% expansion in Q4 March 2016. Also India's infrastructure output for October 2016 will be released today, 30 November 2016. Infrastructure output in India went up 5% year-on-year in September, following a 3.2% growth in August.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 was down 0.1% to 6896.95. Indonesia's Jakarta Composite index added 0.24% to 5148.91. Taiwan's Taiex added 0.53% to 9240.71. South Korea's KOSPI index was up 0.26% to 1983.48. Malaysia's KLCI was down 0.5% to 1619.12. Singapore's Straits Times index rose 0.9% to 2905.17.
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