Asia Pacific Market: Drifts lower on profit taking
After opening marginally higher the Asia Pacific share markets erased early gains and traded sideways before ending the day edge lower on Monday, January 07, 2013, as investors taking profit after kicking off the year with a strong rally.
The weakness was caused by market overheating woes and on indications that policymakers in the US would probably end their $85 billion monthly bond-purchase program before year-end. The Fed minutes hinting at a quicker than expected pullback of stimulus measures increased uncertainty about future policy, tempering investor optimism over upbeat U.S. jobs and service-sector data.
However, the markets recovered some lost ground following the release of US jobs report for December, which was in line with expectations and a reading on nonmanufacturing economic activity which was surprisingly strong. U.S. nonfarm payrolls increased by a seasonally adjusted 155,000 last month, just shy of the 160,000 new payrolls forecast and tad below upwardly revised 161,000 gains in November, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, was 7.8%, the same as the prior month, after an upward revision to the November figure.
The U.S. non-manufacturing sector picked up steam last month as demand improved and employment jumped, according to data released Friday by the Institute for Supply Management. The ISM's non-manufacturing purchasing managers' index unexpectedly increased to 56.1 in December from 54.7 in November. December's reading was the highest since February 2012.
Investors also awaited key policy meetings by the European Central Bank and the Bank of England due this week and cues from the U.S. earnings season for direction. Aluminum producer Alcoa is scheduled to report its fourth quarter earnings after the market close on Tuesday.
Tokyo stocks fell Monday as investors locked in gains amid a sense that the market is overheating after posting a 22-month high in the previous session last week and after dollar's weakening to the upper-87 yen level. The Nikkei Stock Average slipped 89.10 points, or 0.8%, to 10,599.01 following the prior session's 2.8% rise. The Topix index of all the Tokyo Stock Exchange First Section issues also lost 7.45 points, or 0.8%, to 881.06, with 27 of 33 subindexes ending in negative territory.
Profit-taking took its heaviest toll on exporters after the group's stellar recent runup, with heavyweight Fanuc tumbled 3.8% to 15,910 yen, Honda Motor dropped 1.2% to 3,230 yen, Canon lost 2.6% to 3,330 yen, and Advantest was down 3.6% at 1,350 yen.
Softbank declined 1.9%, extending declines for the third consecutive session, hurt by reports Clearwire is attempting to halt Softbank's $20.1 billion deal to acquire 70% of Sprint Nextel. Shares of Aozora Bank fell 10% following reports that U.S. buyout firm Cerberus Capital Management LP is planning sell most of its stake in the firm this month. Fast Retailing rose 2.8% after reporting a 4.5% rise in same-store sales at its Uniqlo clothing chain in December. Shares of Seven & i Holdings soared 5.1%, while Japan Tobacco added 2.9%.
Australian share market ended slight lower after erasing early gain on Monday, January 07, 2013, as weakness among the major resources companies overshadowed positive jobs data out of the US on Friday. At close, the benchmark S&P/ASX200 index was 6.5 points, or 0.14% lower at 4,717.3, while the broader All Ordinaries index was down 4.8 points, or 0.1%, at 4,738.1.
Australian share market was victim to an elaborate hoax today. An anti-coal activist sent out a press release purportedly from the ANZ Bank, claiming the lender was withdrawing it's A$1.2 billion loan facility to Whitehaven Coal (WHC) for environmental reasons. The fake press release saw WHC shares plunge 6%, wiping A$314 million off their value, before they were placed in a trading halt. WHC resumed from trade after the ANZ confirmed the press release was a hoax and that it remained fully supportive of Whitehaven. WHC shares ended the day 0.6% down at A$3.50 after opening the day' session at A$3.57. Shares in the ANZ rose 0.6% to A$25.41. The big mining players also fell due to weaker metals prices. Shares in BHP Billiton slipped 0.3% to A$37.81 while Rio Tinto dropped 1.7% to A$67.40. Iron ore miner Fortescue Metals Group (FMG) rose 0.6% to A$4.89. Shares in rare earths miner Lynas rose 9 cents to 71 cents after it said it expects to be producing finished products from its controversial plant in Malaysia within weeks.
South Korean stocks ended largely unchanged as investors adopted a cautious stance ahead of fourth-quarter earnings results due starting this week. The benchmark Kospi Average slipped 0.03% to 2,011.25. Shares of LG Display fell 2.6% after being fined by China last week for price fixing.
Mainland China market finished at 28-week high after swung between gain and loses on Monday, January 07, 2013, powered by gains in healthcare and financial companies. The benchmark Shanghai Composite index advanced 8.37 points from prior day to finish at 2,285.36, its highest level since June 20, 2012.
Shares of Chinese Pharma companies rallied after the State Council said the biological sector is a strategic emerging industry will target an average annual output growth of more than 20% from 2013 to 2015. Guangzhou Pharmaceutical Co raised daily limit of 10% to 21.78 yuan. Beijing Tiantan Biological Products locked at 10% upper circuit. Shanghai Pharmaceuticals Holding Co jumped 4.2% to 11.47 yuan. China National Medicines Co advanced 2.4% to 14.38 yuan.
Indian equities markets posted first losing session of the calendar year 2013, hit by profit taking pressure in capital goods, fast moving consumer goods (FMCG) and banks stocks. The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) provisionally closed at 19,691.42, down 92.66 points or 0.47% from prior day level.
Elsewhere, benchmark indexes in Singapore, Indonesia and Taiwan were down between 0.2% and 0.7%, while Malaysia's KLSE Composite index closed up 0.1% and New Zealand's NZX-50 was up 0.2%.
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