Asia Pacific Market: Stocks advance on Tuesday

Asia Pacific share market advanced on Tuesday, 06 September 2016, with MSCI's broadest index of Asia-Pacific shares extending gains to 0.7% to 140.88 after opening slightly weaker, boosted by the chances of more stimulus from central banks in Europe and Japan.

Investors are looking ahead to Thursday's meeting by the European Central Bank, which some expect to expand its stimulus efforts. It could extend the duration of its bond-buying program, though some market analysts expect it is more likely to do so toward the end of the year, when it has more information on the economy. The Bank of Japan, meanwhile, is reviewing its ultra-lax monetary easing. In a speech Monday, Governor Haruhiko Kuroda offered mixed signals.

The Group of 20 major economies wrapped up their annual summit, held in Hangzhou, China, with a stronger commitment to coordinate policies to support growth and promote trade liberalization. The gathering also launched a new initiative to work on curbing excess steel production capacity, especially in China, which may help smooth tensions over the issue.

Crude oil prices were mixed after talks between Russia and Saudi Arabia over ways to stabilize the crude market fell short of an output freeze. audi Arabia's Energy Minister Khalid Al-Falih said at the G-20 summit in China on Monday that there's no need to freeze production. Benchmark U.S. crude oil gained 52 cents to $44.96 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.28 on Monday. Brent crude, the benchmark for international oil prices, lost 18 cents to $47.45 a barrel.

Among Asian bourses

ASX200 eases 0.29%

Australian share market ended lower for the fourth day in five, after the central bank kept interest rates unchanged. Sentiment remained lackluster following the afternoon release of the Reserve Bank's latest policy statement, which revealed rates had been left on hold in September. The RBA eased monetary policy in May and August. At close of trade, the benchmark S&P/ASX 200 index slid 16 points, or 0.29%, to 5,413.6, while the broader All Ordinaries index eased 14 points, or 0.25%, to 5,510.4.

Australian banking stocks remained mixed following the rate decision, with Commonwealth Bank falling 0.8% to A$71.76 and Westpac erasing 0.3% to A$29.59, while National Australia Bank falling added 0.3% to A$27.70. ANZ was 0.04% weaker at A$27.24.

Energy stocks ended mixed after a rise in crude prices offshore. Santos closed down 0.2% at A$4.42 while Woodside lifted 0.7% to A$28.70. Origin Energy weakened 1.9% to A$5.15 as it revealed a new pipeline plan relating to its giant APLNG project in a move that could shift gas destined for export back to the local market.

Materials ended modestly higher despite patchy showings from some big names. Behemoths Rio Tinto and BHP Billiton both tacked on around 1%, while iron ore miner Fortescue led the way with a 3% surge, but major gold players Newcrest and Regis Resources gave back 2%.

Retail also struggled for direction, with Woolworths adding 0.2%, Wesfarmers yielding 0.2% and Myer dipping 0.6%. JB Hi-Fi shares gained 5.5% to close at A$30.87 after it confirmed it is still working on a deal to buy the homewares chain the Good Guys.

Nikkei up 0.26%

The Japan share market advanced for fifth straight session on the back of yen weakness against greenback and possibilities for stimulus from central banks. All but five of the 33 industry groups on the Topix rose with telecommunication-service providers and banks among groups contributing the most to the gain. The Nikkei average inclined 44.35 points, or 0.26%, to end at 17081.98. The Topic index jumped 8.73 points, or 0.65%, to end at 1352.58.

Banking stocks drove gains on the Nikkei amid expectations that the Bank of Japan may cut back on longer-term bond buying at its next meeting, thus boosting bond yields. Mizuho Financial Group ended up 0.9%, Sumitomo Mitsui Financial Group added 1.3% and Shinsei Bank closed up 1.8%.

Shares of companies doing business overseas were up as yen weakened against the dollar. A weaker yen helps boost the competitiveness of Japanese exports. Auto makers Nissan Motor Co. Ltd. ended up 1.5%, while Mazda Motor Corp. added 0.7%.

Shares of Amada Holdings Co. sank 5.1% after the metalworking machinery maker said it lowered its payout ratio target to 50% from the 100% it had pledged in May 2014. The Nikkei newspaper had earlier reported that Amada will lower its target.

China Market end firmer

Mainland China stock market closed higher, supported by consumer staples and industrial shares, amid speculation state-run funds intervened in both the equity and currency markets. But gains were limited on concerns that regulators are moving to reduce leverage in the country's financial markets. The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.7%, to 3,342.63 points, while the Shanghai Composite Index gained 0.6% to 3,090.71 points.

Shares of consumer staples and industrial sector were among the top gainers. Automobile shares rallied, led by Anhui Jianghuai Automobile shares which jumped 7.9% and Great Wall Motor Co. added 1.9% on a surge in sales, while CSSC Offshore & Marine Engineering Group Co. advanced 4%.

Gree Electric Appliances Inc., China's largest maker of home air-conditioners climbed for a third day on the mainland as it resumed trading following a seven-month suspension.

Hong Kong Market rises for fourth day

The Hong Kong stock market advanced for fourth straight session, buoyed by a flood of capital pouring in from the mainland since last week, as investors there actively hunt for yields in a low-interest rate environment. Last week, Chinese investors spent 17.7 billion yuan ($2.65 billion) buying Hong Kong stocks under the Shanghai-Hong Kong Stock Connect, the biggest weekly inflows since last April. The benchmark Hang Seng Index inclined 138.13 points, or 0.58%, to 23787.68 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, rose 107.82 points, or 1.1%, to 9938.39. Turnover decreased slightly to HK$75.6 billion from HK$76.9 billion on Monday.

Tencent soared 2.3% to HK$215, with its market cap surpassing HK$2 trillion. The stock yesterday already overtook China Mobile (00941) becoming Asia's largest market cap enterprise.

Mainland lenders also hit new 52-week highs. CCB (00939), BOC (03988) and ICBC (01398) rose 1.3%-1.4% at HK$6.07, HK$3.7 and HK$5.05. HKEx put on 1.9% to HK$198.1 as its CEO told a London commodity summit that the local bourse plans to replicate LME-like platform in Qianhai of Shenzhen.

Russia and Saudi Arabia agreed to discuss ways to stabilise the oil market, triggering oil price hike of 1%. CNOOC (00883) edged up 0.8% to HK$9.7. PetroChina (00857) inched up 0.4% to HK$5.7.

Auto makers rose across the board on strong sales data. Geely Auto (00175) and GAC Group (02238) gained 3.9% and 3.5% to HK$6.95 and HK$11.28 on Credit Suisse's bullish comments. BYD (01211) put on 4% to HK$56.15 after Shenzhen government announced purchase subsidy for new energy cars.

Sensex scales 17-month high

Indian stock market resumed trading after a holiday on Monday to climb a 17-month high after foreign funds bought a net $222 million of local equities last week, taking purchases this year to $6.1 billion. The latest rally on the bourses was also triggered by outcome of a monthly survey showing that August saw a solid rebound in the rate of expansion in Indian service sector business activity. The barometer index, the S&P BSE Sensex jumped 445.91 points or 1.56% to settle at 28,978.02. The Nifty 50 index surged 133.35 points or 1.51% to settle at 8,943.

Infosys rose 1.45% after the company announced that it has entered into a joint venture (JV) agreement with Saudi Prerogative Company (SPC) in the Kingdom of Saudi Arabia to conduct IT services for customers located in the Kingdom of Saudi Arabia. Infosys holds 70% while the rest 30% will be held by SPC in this JV.

Index heavyweight and housing finance major HDFC rose 1.29% after the company announced that it has closed the third issue of rupee denominated bonds to overseas investors, aggregating up to Rs 1000 crore. The yield to investor from the bonds is 7.5% per annum payable semi-annually. Maturity date for these bonds is 9 January 2020.

Maruti Suzuki India (Maruti) gained 3.04% after the company announced that its total production rose 3.25% to 1.27 lakh units in August 2016 over August 2015. The announcement was made yesterday, 5 September 2016.

Elsewhere in the Asia Pacific region: New Zealand's NZX50 rose 0.14% to 7514. South Korea's KOSPI index added 0.3% to 2066.53. Taiwan's Taiex index grew 1% to 9181.85. Singapore's Straits Times index added 1.57% to 28996.55. Indonesia's Jakarta Composite index rose 0.3% to 5372.10. Malaysia's KLCI rose 0.7% to 1689.92.

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