Asia Pacific Market: Stocks closed mixed

Headline indices of the Asia Pacific market closed mixed on Tuesday, 18 November 2014, as downbeat Chinese house prices data offset better-than-expected reading of Germany monthly ZEW survey and speculation of more economic stimulus measures in japan.

Investor sentiments turned sour amid concerns that China economic slowdown will deepen after the National Bureau of Statistics said home prices declined in 69 of 70 cities in October from September.

However, better-than-expected reading of Germany monthly ZEW survey and speculation of more economic stimulus measures in Japan helped to calm investor nervousness.

Mannheim-based think tank ZEW's monthly survey of economic sentiment rose to 11.5 points from -3.6 points in October, registering a the first gain in almost a year, raising hopes of an improvement in Europe's biggest economy after it dodged recession in the third quarter.

Japan's Prime Minister Shinzo Abe called an early election, two years ahead of schedule. At a news briefing, he said he would dissolve parliament later this week (on Friday). He also said he was delaying a planned but unpopular increase in the country's sales tax. In April this year, the sales tax was increased for the first time in 17 years, from 5% to 8%, but the move has dented consumer confidence and has had a negative impact on the economy. Investors are expecting japan government would potentially bring more measures to stimulate growth after the Japanese economy unexpectedly slipped into recession.

Among Asian bourses

Aussie market fall 0.24%

Australian share market closed down for second straight day, as drop in iron ore price, poor sentiment over Japan's economy and worries about the Murray Inquiry into the financial services industry continued to weigh on investor sentiments. Almost all sectoral indices dived into sea of red, exception being bullion and technology, with shares in consumer staples, energy, materials, and financials companies being major decliners. The benchmark S&P/ASX 200 Index was down 12.80 points, or 0.24%, to 5399.70 and the broader All Ordinaries Index fell by 13.50 points, or 0.25%, to 5383.10.

Shares of financial players were down, amidst concerns about the impact of tougher regulations and higher capital reserve requirements. Commonwealth Bank of Australia shares fell 0.05% to A$80.95. National Australia Bank eased 0.06% to A$32.37 and Australia and New Zealand Banking Group finished 0.2% lower at A$31.83. Westpac Banking Corp was up 0.1% to A$32.76.

Retailers were also weaker, with Woolworths down 46 cents at A$33 and Coles owner Wesfarmers 11 cents lower at A$43.67.

Shares of materials and resources companies were down on weak iron ore prices, with resources giant BHP falling 0.1% to A$33.18 while main rival Rio Tinto down 0.7% to A$59.47. Fortescue shares dropped 6.6% to A$2.97. Iron ore prices continued to crash with the benchmark price hitting five-year lows on Monday night at $75.10 per tonne

Nikkei rebounds on bottom fishing

Japanese shares rebounded sharply on today, as investors chased for bottom fishing after Monday's meltdown. Sentiment also got a boost after greenback appreciated to upper 116-level against yen, and hopes for a government economic stimulus package. The Nikkei Stock Average closed 2.2% higher at 17344.06, after plunging 3% on Monday due to dismal third quarter gross domestic product data that put Japan firmly into a recession.

There are rumours in the market Prime Minister Shinzo Abe likely to delay a sales-tax increase, call an election and boost stimulus after the economy sank into recession. As per media reports, the government is readying a spending package expected to total Y2 trillion to Y3 trillion and unlikely to include public works projects, except for disaster-management measures.

Shares of Sony Corp gained 6.4% to 2,478.5 yen, after Mitsubishi UFJ Morgan Stanley boosted its rating on the stock to overweight from neutral and increased share price target by 58% to 3,000 yen.

Toray Industries added 4.5% to 880 yen, on reports the company would sign a deal by the end of the year to supply light-weight composites to Boeing, worth 1 trillion yen over 10 years.

Nippon Suisan Kaisha Ltd., a seafood producer, surged 7.8% to 417 yen on reports the International Commission for the Conservation of Atlantic Tunas agreed to increase the 2015 catch quota of Atlantic and Mediterranean bluefin tuna by 20%.

Shanghai Composite falls 0.71%

Mainland China share market closed down, registering fourth day of consecutive slump, as mainland investors continued profit booking amid fading enthusiasm toward an exchange link with Hong Kong and after new home prices drop in 69 of 70 major Chinese cities in October. The Shanghai Composite Index fell 0.71%, or 17.64 points, to 2456.37 at the close.

Home prices in China fell in October. The number of Chinese cities where prices fell month on month remained unchanged at 69 last month while prices were flat in Zhengzhou, Henan Province, the National Bureau of Statistics, which tracks housing prices in the 70 major cities, said today. On a year-on-year basis, new home prices in 67 of the 70 cities saw declines, an increase of 9 from September.

International investors bought 4.8 billion yuan of Shanghai shares today, out of the maximum daily amount of 13 billion yuan, after using the entire quota yesterday.

Shares of property developers declined amid concerns that an economic slowdown will deepen after the National Bureau of Statistics said home prices declined in 69 of 70 cities in October from September. Poly Real Estate, China's second-largest developer by market value, lost 2.7%. China State Construction, the nation's largest housing contractor, dropped 3.1%.

Sinotex Investment & Development Co., a Chinese maker of cashmere products, rose 9.9% as the company agreed to buy Essence Securities Co. in an 18.3 billion yuan reverse merger.

Shanghai International Port (Group) Co. gained by the 10% daily limit as the company said it will sell shares to its employees in a private placement.

Hang Seng falls 1.13%

Hong Kong share market closed lower for second consecutive day, as investors continued booking profits from stocks that gained before the launch of the Shanghai-Hong Kong Stock Connect. The Hang Seng Index ended down 267.91 points to 23529.17, off an intra-day high of 23881.01 and low of 23483.19. Turnover fell to HK$74.60 billion from HK$83 billion on Monday.

Mainlander interest in the city's shares was virtually non-existent on the second day of the much-vaunted trading link up with Shanghai's exchange that lets dealers in each market buy shares in the other. But China-based investors bought just 7.6% of their daily allowance of Hong Kong shares by the end of the day on Tuesday, while Hong Kong dealers picked up less than a third of their Shanghai quota. On Monday, the day of the Connect launch, dealers in Hong Hong bought up their entire quota of mainland shares, but mainland dealers used up less than 20%.

Bourse operator Hong Kong Exchanges and Clearing fell 2.36% to $HK173.9 after losing 4.45% on Monday. Among other firms Cathay Pacific Airways slipped 1.54% to $HK15.34, HSBC fell 0.45% to $HK77.20 and Tencent lost 2.56% to $HK125.80.

Li & Fung shares dipped 3.8% to HK$8.9 after UBS Research issued bearish comments on the stock.

Macau gaming stocks declined Credit Suisse said downside risks for the sector on weakening fundamentals. Sands China (01928) declined 3.2% to HK$45.85. Galaxy Ent (00027) slipped 3% to HK$51.75.

Sensex, Nifty register small losses after hitting record high

Indian stock market ended little changed, retreating from record highs hit earlier in the session, as investors booked profits even as rising confidence in the domestic economy and rate-cut hopes. The S&P BSE Sensex shed 14.59 points or 0.05% to settle at 28,163.29. The CNX Nifty declined 4.85 points or 0.06% to settle at 8,425.90.

Finance Minister Arun Jaitley yesterday, 17 November 2014, said that he is in touch with various state governments and most of the contentious issues on the implementation of the Goods and Service Tax (GST) have already been resolved. Jaitley said that the targets fixed for disinvestment in the current financial year are quite ambitious one but he hopes to achieve that or reach near the same.

Sugar shares surged. Capital goods stocks edged higher. Realty stocks declined. Shares of Reliance Anil Dhirubhai Ambani (ADA) group edged higher. Shares of jewellery firms declined. Shares of insurance companies advanced. Telecom stocks rose across the board on reports Defence Ministry and Telecom Ministry will coordinate to resolve spectrum issue.

Aurobindo Pharma edged higher after issuing a clarification with regard to its capital expenditure plans. Ranbaxy Laboratories dropped after media reports suggested that the company has sued the US Food and Drug Administration (FDA) for revoking approvals granted to the firm to launch copies of two drugs including AstraZeneca Plc's heartburn pill Nexium. Reliance Industries rose after its unit Reliance Jio Infocomm (RJIL) signed syndicated term loan facilities aggregating to $1.5 billion.

Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.28% to 8859.07. South Korea KOSPI rose 1.2% to 1967.01. New Zealand's NZX50 added 0.27% to 5505.03. Singapore's Straits Times index rose 0.76% at 3313.73. Malaysia's KLCI rose 0.66% to 1818.38. Indonesia's Jakarta Composite index jumped 0.96% to 5102.47 after Bank Indonesia convened an extraordinary meeting today, fuelling speculation it will raise interest rates to deal with a potential rise in inflation after the government hiked subsidised fuel prices by more than 30% late on Monday.

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