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Asia Pacific Market: stocks mixed ahead of Fed meeting outcome

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Pacific share market closed mixed on Wednesday, 14 June 2017, as global investors awaiting clarity on the future path of US monetary policy from a two-day Federal Reserve meeting where it is widely expected to raise rates.

All eyes were on the U.S. central bank, which is scheduled to release its rate decision at 1800 GMT on Wednesday with a news conference to follow from Chair Janet Yellen. While an rise is widely expected by the Federal Reserve, its statement, and that of its boss Janet Yellen, will be closely inspected for clues about future monetary policy.

The market reaction seemed largely muted to weak investment data in China, which reinforced views that the country's economy will start to lose some momentum in coming months. Most analysts expect the slowdown to be gradual as authorities continue to provide ample support. China's industrial output and retail sales grew faster than expected in May while fixed-asset investment slowed, but the data showed the economic growth was largely steady. China's value-added industrial output, an important economic indicator, added 6.5% year on year in May, flat with April's, the National Bureau of Statistics said on Wednesday. Retail sales rose 10.7% in May, flat with April's a, the data showed. Fixed-asset investment rose 8.6% year on year in the first five months, slower than the 8.9% gain in the first four months.

Among Asian bourses

Australia Stocks end higher

Australian ended higher for fourth straight session on tracking record highs on Wall Street overnight, with shares of the Healthcare, IT and Industrials sectors being major gainers. The S&P/ASX 200 index rose 1.1%, or 61.13 points, to 5,833.90.

Shares of Financials were the top gainers, tracking their U.S. peers, with Commonwealth of Australia, the biggest by market value, rising 1.4%. Westpac was up 1.4%, while ANZ and National Australia were each about 0.5% higher.

Gold stocks guided the metals and miners index higher, while mining giants BHP and Rio Tinto held steady on persistent weakness in iron ore and base metal prices. China's iron ore futures slid to their weakest level in almost seven months on underlying concerns over surplus glut.

Nikkei down ahead of outcome of Fed policy meeting

The Japan share market finished session slightly in negative territory, as investors were overwhelmingly awaiting conclusion of the US Federal Reserve and its June monetary policy meeting later on the day. Meanwhile, the market's downside was limited thanks to buying of incentive-backed issues. Shares of oil and coal product, nonferrous metal and insurance-related stocks comprised those that declined the most by the close of play. The benchmark Nikkei 225 edged down 0.08%, or 15.23 points, to close at 19,883.52, while the broader Topix index of all first-section issues slipped 0.11%, or 1.74 points, to 1,591.77.

shares were among losers, with Sumitomo Mitsui falling 0.88% to 4,245 yen and rival Mitsubishi UFJ declining 0.64% to 729.3 yen.

Other major losers included Toyota, down 0.25% to 5,859 yen, while Toshiba dropped 3.95% to 313.3 yen on the back of reports the troubled conglomerate may again delay reporting its earnings results -- putting it risk once again of being delisted from the Tokyo bourse.

By contrast, industrial robot maker Fanuc rose 0.65% to 21,565 yen and Sony gained 0.56% to 4,060 yen, tracking rallies in US technology firms. Nissan closed up 0.55% at 1,081 yen and Honda rose 0.22% to 3,084 yen. Ono Pharmaceutical attracted purchases after announcing a plan to buy back its own shares.

China Stocks fall on Anbang news

The Mainland China closed lower, as investors sentiment was soured by a media report alleging a probe of the head of financial conglomerate Anbang Insurance Group, plus weak May investment data that deepened worries of economic deceleration. The International Monetary Fund's forecast of a 6.7% growth for China's economy this year, slightly higher than 6.6% last year, didn't ignite the market. The Shanghai Composite Index shed 0.73% to end at 3,130.67 points.

Investors dumped stocks - many big-caps - that are partly-owned by Anbang, after the acquisitive company had said late on Tuesday its chairman Wu Xiaohui was no longer able to fulfil his duties. Hours earlier, Chinese magazine Caijing reported that Wu had been taken away for investigation. Anbang-invested shares - including Financial Street Holdings , China Vanke, China Merchants Shekou , Gemdale and China State Construction Engineering - all dropped sharply.

Confidence was further dented by China's tepid investment data for May, reinforcing views that the world's second-largest economy will soon start to lose some momentum. The worrying combination of tighter short-term liquidity, and pessimism toward longer-term growth is reflected in China's inverted yield curve, with the benchmark yield on one-year Chinese government bonds rising above 10-year yield recently.

Insurance firms led the decline, with China Life Insurance Co shrinking 3.48% to 27.49 yuan (US$4.05) and China Pacific Insurance (group) Co losing 3.38% to 31.69 yuan.

China Minsheng Banking Corp, in which Anbang holds a 11.2% stake, fell 0.37% to 8.06 yuan, while Gemdale Corp, a property group where Anbang owns 20.4%, shed 4.34% to 10.57 yuan yesterday.

Hong Kong Stocks end mixed

The Hong Kong finished mixed, as market participants awaiting the outcome of a US central meeting later in the day. While an rise is widely expected by the Federal Reserve, its statement, and that of its boss Janet Yellen, will be closely inspected for clues about future monetary policy. The market reaction seemed largely muted to weak investment data in China, which reinforced views that the country's economy will start to lose some momentum in coming months. Sector performance was mixed, with gains were led by information technology stocks, aided by a bounce in the U.S. tech shares, while losses were seen in property and construction stocks. The Hang Seng index rose 0.1%, to 25,875.90 points, while the China Enterprises Index lost 0.1%, to 10,514.91 points. Turnover reduced to HK$76.4 billion from HK$79.9 billion on Tuesday.

BYD (01211) continued yesterday's rally, rising 3% to HK$49.95. Dongfeng Motor (00489) was unchanged at HK$9.86 after rising 4% at one point. Great Wall Motor (02333) dipped 3.9% to HK$10.28 after CICC Research raised its target price by 36% to HK$14.3. Geely Automobile (00175) also slipped 1.6% to HK$14.96.

China Eastern Airlines (00670) announced that its May passenger traffic growth of 11%. It ended up 1.4% to HK$4.51. China Southern Airlines (01055) put on 1.8% to HK$6.4. Air China (00753) fell 0.5% to HK$7.77. Cathay Pacific Airways (00293) edged up 0.7% to HK$12.4.

Sensex gains for second straight day

Key benchmark indices garnered modest gains after gyrating in a small range during the day as firmness in most global stocks and data showing wholesale price inflation easing in May, supported gains on the bourses. The barometer index, the S&P BSE Sensex, rose 52.42 points or 0.17% to settle at 31,155.91. The Nifty 50 index rose 11.25 points or 0.12% to settle at 9,618.15. The Sensex rose for the second straight day. The Nifty snapped two-day losing streak. The trading activity remained within a small range as investors chose to stay on the sidelines and awaited clarity on the Federal Reserve's future path for US policy later in the global day today, 14 June 2017.

Reliance Industries (RIL) jumped 3.3% after reports its subsidiary Reliance Jio Infocomm outran all its peers in April by adding about 4 million new users to reach a consumer base of 112.55 million. TRAI data showed that Jio was also the leader in wireless broadband services with 112.55 million customers, followed by Bharti Airtel with 52.25 million, Vodafone with 39.76 million, and Idea Cellular with 24.09 million.

Dr Reddy's Laboratories gained 1.41% after the company said that it has received Establishment Inspection Report (EIR) from the United States Food and Drug Administration on 13 June 2017 as closure of audit for the company's API manufacturing plant at Miryalaguda. This unit was inspected by the USFDA in February 2017 and Dr Reddy's was issued form 483 with three observations. The announcement was made after market hours yesterday, 13 June 2017.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, June 14 2017. 17:14 IST
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