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Asia Pacific Market: Stocks mixed ahead of Yellen testimony

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Pacific share market closed mixed in thin trade on Tuesday, 11 July 2017, as a disappointing showing on Wall Street overnight and cautioun ahead of U. S. Federal Reserve Chair Janet Yellen's monetary policy testimony, which may offer clues on when the Fed would tighten its monetary policy.

Investors are watching for more cues from the Fed on the pace of interest-rate increases. Yellen's semi-annual testimony to on Wednesday and Thursday, may give further indication on the timing of the third Fed for the year. A Fed can further dampen appetite for emerging markets as it points to further strengthening in the investment environment for developed markets.

Fed Gov. Lael Brainard was due to speak in New York on Tuesday, ahead of Chairwoman Janet Yellen's testimony to congressional committees on Wednesday and Thursday. Brainard's speech is worth mulling over as one of the first Fed views after the data surprise.

In New York on Tuesday, the Dow Jones industrial average saw an uptick of 0.55 of a point to 21,409.07, the S&P 500 index shed 1.9 points to 2,425.53, and the Nasdaq composite index climbed 16.91 points to 6,193.30.

Commodities were higher with the Benchmark U. S. crude gaining 15 cents to $44.55 a barrel in electronic trading on the New York Mercantile Exchange. It added 17 cents to settle at $44.40 a barrel on Monday. Brent crude, used to price international oils, climbed 17 cents to $47.05 a barrel. The August gold contract gained $1.50 to US$1,214.70 an ounce and the September copper contract was up two cents at US$2.67 a pound.

Among Asian bourses

Australia Market ends higher for second day

Australian finished session higher for second straight session, aided by fresh signs that local business conditions are improving. However, gains were capped as investors awaited the start of major second-quarter U. S. earnings reports and Federal Reserve Chair Janet Yellen's congressional testimony later this week. The S&P/ASX 200 index ended up 0.1% or 4.5 points at 5728.90.

Australian investors drew confidence from the latest NAB survey which put business conditions in Australia at multiyear highs in June. The data bolstered the view that the economy remains solid and job creation will retain some pep. Also, monthly data on housing finance signaled regulators are achieving success with measures to cool the real-estate market. Lending to investors, a key target of clamps announced at the end of March, fell for a second month in May.

Shares of resources companies extended gains as the most-traded iron ore on the Dalian Commodity Exchange rose for a third straight day. Heavyweight miners BHP rose 1.1% to A$24.78 while Rio Tinto and Fortescue Metals Group gained 0.8% and 3.5% to A$65.62 and A$5.27, respectively. South32 rose 1.8% to A$2.77, clawing back some of Monday's losses following the suspension of coal-mining at underground pits in eastern Australia due to ongoing safety concerns.

Energy stocks were up, benefited from rise in oil prices, with sector bellwether Woodside Petroleum up about 0.6% and fuel supplier Caltex Australia nearly 1% higher.

Nikkei extends gain on yen depreciation

The Japan share market finished session higher, on the back yen depreciation against greenback. However, market gain was capped as investors waited for fresh clues on the global economy and US central bank policy with Federal Reserve boss Janet Yellen's testimony later in the week in focus. Most of TSE sectors inclined, with marine transportation, electric appliance, and information and communication-linked stocks being notable gainers, while power and gas utilities were downbeat. The Nikkei 225 average rose 114.50 points, or 0.57%, to end at 20,195.48, while the Topix index of all first-section issues finished 11.66 points, or 0.72%, higher at 1,627.14. Rising stocks outnumbered declining ones on the Tokyo Stock Exchange by 2284 to 880 and 292 ended unchanged. The Nikkei Volatility, which measures the implied volatility of Nikkei 225 options, was down 10.88% to 14.42.

The Tokyo market got off to a weak start, with trading lacking vigor amid a dearth of fresh buying incentives and ahead of a congressional testimony by U. S. Federal Reserve Chairwoman Janet Yellen. But the market soon took an upturn and accelerated its upswing in the afternoon thanks to purchases of export-oriented names amid the dollar's firming against the yen and other incentive-backed stocks

Shares of exporters were higher, thanks to yen weakening against greenback which boosts exporters' profitability. Automakers Toyota and Subaru attracted buying, as did industrial robot maker Fanuc and semiconductor-related Hoya. Machinery makers, information technology firms and materials producers were also buoyant. Sony was also upbeat thanks to a robust box-office start of a new Spider-Man film.

Shares of Japan Post Holdings closed up 1.85% following a report that the Japanese finance ministry would not sell shares of the company as initially planned.

Shares of Japanese automaker Suzuki closed down 1.77% after reports that Dutch prosecutors were looking into a possible misuse of emissions software.

Pachinko and slot machine makers were down following the National Police Agency's announcement of a new regulation for the industry.

China Stocks fall on regulatory intervention woes

The Mainland China finished session softer after swinging between gains and losses, due to state media reports that the regulator was clamping down on stock buying by fund managers ahead of purchases by their funds. Banking and consumer stocks led the advance, while material firms took a breather after recent strong gains amid an industry recovery and a weaker dollar.

The blue-chip CSI300 index rose 0.5% to 3,670.81 points, while the benchmark Shanghai Composite Index was down 0.3% to 3,203.04 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, declined 0.72% to 1,891.60. The ChiNext Index, China's NASDAQ-style board of growth enterprises, lost 1.07% to close at 1,783.91 points.

Trading sentiment was largely subdued as investors awaited fresh catalysts ahead of a burst of data due over the next week China will release second-quarter gross domestic product(GDP) on July 17, along with June industrial output, retail sales and January-June fixed asset investment.

Shares of nonferrous metal and coal sectors suffered losses, with Fujian-based Xiamen Tungsten plunging 4.36% to 24.59 yuan, while Chengtun Mining dropped 4.85% to close at 7.26 yuan. Yanzhou Coal Mining shed 3.35% to close at 12.68 yuan and Shaanxi Coal Industry Company dived 6.71% to close at 7.93 yuan.

Shares of companies based in the southern province of Guangdong advanced after reports a preliminary plan for the city cluster development in the Guangdong-Hong Kong-Macau Greater Bay Area has been completed. Ping An Bank surged 6.88% to 10.25 yuan and Zhuhai Port jumped 4.58% to 12.10 yuan. Shenzhen Chiwan Wharf Holdings climbed 6.79% to 29.40 yuan.

Hong Kong Market ends higher as financials gain

The Hong Kong ended higher, bolstered by strong gains among financial sector stocks. The market was also boosted by a robust rally in Geely Automobile Holdings as the automaker saw strong profit growth for the first half. The Hang Seng Index closed up 1.5%, or 313.6 points, to 25,877.64. The Hang Seng China Enterprises Index, also known as the H-share gauge, also climbed 2%, or 201.62 points, to 10,415.20. Turnover increased to HK$88 billion from HK$80.2 billion on Monday.

Shares of financial players gained the most among the industry groups as Morgan Stanley raised its price targets for the Hong Kong-listed shares of Chinese banks by an average 5% in a note released Tuesday, based on a rosier outlook for their net margins. Anticipation surrounding Federal Reserve Chair Janet Yellen's two-day congressional testimony starting Wednesday also added to the buoyancy in the financial sector. China Construction Bank (00939) shot up 4% to HK$6.18. Industrial and Commercial Bank of China (01398) also added 3% to HK$5.02. HSBC Holdings increased 0.6% to a fresh two-year high and AIA Group climbed 2.4% to near a record level amid speculation they would both benefit in a rising interest-rate environment. Chinese insurers were also higher. China Life (02628) gained 2.7% to HK$24.6 and Ping An Insurance Group of China closed up 1.72% to HK$55.1. PICC Group (01339) surged 6.4% to HK$3.66.

Geely Automobile (00175) jumped 7.5% to HK$18.54 after the company issued positive profit alert. It became the top blue-chip winner. Brilliance China Automotive (01114) shot up 5.8% to HK$15.3 on BofAML's target price hike.

Sunac China (01918) soared 13.7% to HK$16.82 on resumption of trading. Sunac announced it will acquire 76 hotels and 91% equity in 13 theme parks and projects classified as culture and tourism for a combined 63 billion yuan from Wanda Group (Dalian Wanda Commercial Properties tourism projects and hotels). Meanwhile, Wanda Hotel Development, an affiliate of Wanda group, slumped 7% to HK$0.79 after jumping 47% on Monday.

Sensex end at fresh record high

Indian managed to keep its winning momentum going and hit fresh record high despite fag-end profit booking, which wiped off most of the early gains. The barometer index, the S&P BSE Sensex, rose 31.45 points or 0.10% to settle at 31,747.09. The Nifty 50 index rose 15 points or 0.15% to settle at 9,786.05.

Stocks of sugar companies hogged the limelight after the government increased import duty on sugar to 50% in order to curb dumping of the commodity in India as international prices fell. Empee Sugars and Chemicals (up 4.95%), Sakthi Sugars (up 3.99%), Rana Sugars (up 2.63%), Dhampur Sugar Mills (up 1.31%), Triveni Engineering & Industries (up 1.03%), KCP Sugar & Industries Corporation (up 0.46%), Bajaj Hindusthan Sugar (up 0.21%), Simbhaoli Sugars (up 0.16%) and EID Parry (India) (up 0.08%), edged higher. Balrampur Chini Mills (down 0.72%), Dwarikesh Sugar Industries (down 0.77%), DCM Shriram Industries (down 0.86%) and Shree Renuka Sugar (down 2.32%), edged lower.

IndusInd Bank fell 0.04% to Rs 1559.25. The bank's net profit rose 26.48% to Rs 836.55 crore on 21.52% growth in total income to Rs 5302.77 crore in Q1 June 2017 over Q1 June 2016. The result was announced during market hours today, 11 July 2017. The bank's gross non-performing assets (NPAs) stood at Rs 1271.68 crore as on 30 June 2017 as against Rs 1054.87 crore as on 31 March 2017 and Rs 860.64 crore as on 30 June 2016. The ratio of gross NPAs to gross advances stood at 1.09% as on 30 June 2017 as against 0.93% as on 31 March 2017 and 0.91% as on 30 June 2016. The ratio of net NPAs to net advances stood at 0.44% as on 30 June 2017 as against 0.39% as on 31 March 2017 and 0.38% as on 30 June 2016. The bank's provisions and contingencies rose 34.49% to Rs 309.97 crore in Q1 June 2017 over Q1 June 2016.

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

First Published: Tue, July 11 2017. 17:59 IST