Asia Pacific Market: Mixed as cliff talks turn south
Asia Pacific share markets were mixed on Thursday, December 20, 2012, as traders sought for defensive assets, avoided high yielding shares, on news that U.S. fiscal cliff negotiations have taken a turn for the worse.
Some investors booked recent gains that fueled by hopes that opposing lawmakers in Washington were close to a consensus in budget talks ahead of a year-end deadline that would trigger a series of tax hikes and spending cuts.
Investor optimism over a bipartisan budget deal turned into despair amid fresh wrangling between the Obama administration and the Republicans. White House said it won't support Republicans' fiscal-cliff proposal while on the other hand House Speaker Boehner pressured President Obama to accept the latest Republican plan.
The GOP-controlled House is scheduled to vote later today on House Speaker John Boehner's Plan B proposal to push a backup tax bill, but President Barack Obama has already threatened to veto the bill that would extend the Bush-era tax cuts for anyone earning less than $1 million. A Congressional Budget Office report predicted that the U.S. economy would drop into a recession in the first half of the New Year, if the Congress fails to act on the fiscal cliff.
Tokyo market declined on Thursday, as investors cashed out profit n worried over market overheating after Nikkei Stock Average topped 10,000 level for the first time in about eight months and a half on Wednesday and on worried about little progress in the US fiscal cliff negotiation. Meanwhile the dollar's weakening to the 83 yen level fueled selloff as well. The benchmark Nikkei Stock Average declined 121.07 points from prior day to finish at 10,039.33, while broader Topix index lost 0.73 point to stand at 838.61.
Exporters were lower on profit taking, with Sony Corp declined 1.6% to 921 yen, Canon Inc 2.9% to 3,355 yen, Hitachi 1.4% to 489 yen, and Komatsu 0.6% to 2,094 yen. Fast retailing Co dropped 4.1% to 20,370 yen. Automaker Honda Motor Co retreated 1.8% to 3,015 yen and Nissan Motor Co 7.4% to 782 yen.
Japanese banks, brokerages, and real estate shares closed higher on hopes for more accommodative central bank and economic stimulus policies under the incoming Liberal Democratic Party-led coalition government. Mitsubishi UFJ FG gained 1.1% to 440 yen, Nomura Holdings added 2.1% to 429 yen, and Mitsubishi Estate was up 1.6% to 1,844 yen.
Australian shares rose for the third straight day Thursday, hitting a fresh 17-month high as investors sought defensive stocks. Industries considered defensive such as healthcare, utilities and telecommunications were up offsetting losses in miners. The benchmark S&P/ASX 200 closed up 0.4% at 4634.1 points, the highest close since July 8, 2011. Blood products and vaccine maker CSL gained 1% and telecoms giant Telstra closed 0.2% higher. Australia's miners fell, with Fortescue Metals Group dropped 3.4%, Rio Tinto lost 0.6% and gold producer Newcrest Mining slipped 0.3%. Billabong International continued to struggle, dropping 5.9%, as analysts downgraded their ratings on the surfwear maker after it cut earnings guidance on Wednesday.
South Korea's shares settled slight higher, with the benchmark Kospi average rose 0.3% after a holiday yesterday for presidential elections won by Park Geun Hye. She became the nation's first female president edging her rival Moon Jae-in of the Democratic United Party. Hyundai Engineering & Construction jumped 4% on expectations that the new government would announce measures to revive the housing and construction sectors.
New Zealand's stock market closed new five-year high today, as foreign investors were drawn to the nation's relatively attractive returns and cheered the expansion plans of companies such as SkyCity Entertainment Group. Mainfreight and Diligent Board Members Services hit new records. By the provisional closing, the NZX 50 Index rose 52.45 points, or 1.3%, to 4075.45, the highest close since December 2007.
SkyCity Entertainment rose 1.3%, adding to the previous session's 5% rally, after the company unveiled plans to invest more than A$300 million upgrading its Adelaide casino. Mainfreight and Diligent Board Members soared 4-6% to record highs.
Mainland China's shares recouped lost ground late afternoon to finish Thursday's trading firmly higher, led by property developers, materials & resources, and consumer-related heavyweights as more investors turning to believe the market is attractive after fallen too much and for too long this year. The benchmark Shanghai Composite index settled 6.11 points higher from prior day closure to 2,168.35, a level not seen since August 10, when index closed at 2,168.81. Market gains were however limited as some booked profit following strong recent rally and possible glut of share supply as non-tradable shares worth of 78.6 billion yuan will be unlocked this week,. Local market rallied more than 200 points or 10% after hitting a lowest level in 47-month on December 3, 2012.
Chinese developers shares were solidly higher, sending the gauge of developers in the Shanghai index 1.5% up, as investors chased for bottom hunting following a 3% drop early this week. China Vanke, the biggest developer, advanced 1.8% to 9.48 yuan. Poly Real Estate Group fell rose 1.6% to 12.32 yuan.
Chinese lenders were mixed after Bank of Communications Co. said Chinese lenders net income may grow as low as 7 and 8% next year from about 17% in 2012 due to possible operational difficulties. China Citic Bank Corp. declined 0.7% to 4.10 yuan, Huaxia Bank Co 1% to 9.73 yuan, and Industrial & Commercial Bank of China Corp 0.7% to 4.07 yuan.
Hong Kong's shares closed slight higher after recouping lost ground late afternoon, led by realty and banking heavyweights. The benchmark Hang Seng Index ended 36.41 points, or 0.16%, higher at 22,659.78 after hovering below neutral line whole day amid concerns about the lack of progress in U.S. fiscal cliff talks. Market heavyweights were up. HSBC Holdings plc added 1.4% to HK$81.65, while China Mobile added 0.3% at HK$90.50. Aluminum Corporation of China declined 2.2% to HK$3.49 after UBS maintained Sell with target price lowered from HK$2.81 to HK$2.65.
Galaxy Entertainment Group advanced 4% to HK$30.95 it announced a plan to invest as much as HK$50bn to expand a Macau resort as the company seeks to draw more Chinese tourists.
Esprit Holdings declined 1.4% to HK$11, extending losses for second straight day as brokerages cut its rating or reduced target prices after Group expected to record a loss for the half-year ended Dec 31 2012.
India's shares declined today, with the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange down by 83.19 points or 0.43% from its previous close at 19,476.00 points on profit booking led to selling pressure in metal, bank and auto stocks. Colgate Palmolive was the star performer of the day, rising 4% to close at Rs 1,496 after touching a record high of Rs 1,499.
Elsewhere, Singapore's Straits Times index was up 0.4%, while Indonesia's Jakarta Composite index was down 0.5% and the Taiwan Weighted average lost 1.1%.
Powered by Capital Market - Live News