China's economy is showing signs of improvement while capital outflows from the country are moderating, top Chinese officials said on Sunday. Easing outflows and the softer dollar are resulting in less pressure on the yuan currency, which could give the central bank more confidence to cut interest rates and banks' reserve requirements again after largely weak data in January and February
There are also expectations of a bigger rate cut of 50 basis points from the Reserve Bank of India (RBI) at its monetary policy review early next month after the government announced reduction in interest rates on various small savings schemes for Q1 June 2016 based on the prevailing G-Sec (government securities) yields.
Oil slipped for a second session, extending Friday's slide of over 1% after the U.S rig count rose for the first time since December, renewing worries of a supply glut after an output freeze proposal had helped boost the market to 2016 highs. US West Texas Intermediate (WTI) futures fell more than 1% to $38.85 per barrel after briefly topping $41, its highest since last December. Brent crude edged lower to $40.89 per barrel after hitting this year's peak of $42.54 per barrel.
Among Asian bourses
Australia Market drifts into the red
Australian share market declined for the first time in four straight sessions, as investors elected to book recent gains, after Prime Minister Malcolm Turnbull recalled parliament and brought the Budget forward, setting the scene for an early election. Most of ASX sectors ended down, with shares of mining and energy companies being major loser, hurt by weaker metals and oil prices. At the close, the benchmark S&P/ASX200 index declined 16.50 points, or 0.32%, at 5166.60, while the broader All Ordinaries index de-grew 14.40 points, or 0.27%, to 5224.90.
Prime Minister Malcolm Turnbull has been trying to pass through labour reform bills but has faced hostility to it from the senate. As a result, he's threatened to dissolve both houses of parliament and call an early election on 2 July. Polls indicate his party are likely to win, even though Mr Turnbull's approval ratings have recently fallen.
Commodity linked shares declined on profit booking, following 1-2% falls in global oil prices. Mining giant BHP Billiton grew 0.4% to A$18.17, while Rio Tinto lost 0.1% to A$44.10 and Fortescue Metals Group declined 0.4% to A$2.74. Santos declined 3% to A$3.94, Origin Energy 3.2% to A$5.20, and Oil Search 2.3% to A$6.83.
Virgin Australia jumped 9.3% to A$0.38 after securing a A$425 million ($323 million) loan facility from its four major shareholders: Air New Zealand, Etihad Airways, Singapore Airlines and Virgin Group, giving it breathing room to review its capital structure.
AGL Energy was down 0.1% to A$18.26 after the utility announcing it would have to shut its Liddell Power Station in stages after an external boiler leak at one of the four units recently. The utility said the unit shutdowns would weigh on net profit, but wouldn't affect underlying earnings guidance.
China Market surges on monetary easing
Mainland China stock market closed sharply higher, after authorities loosened controls on brokerages lending money to investors for share buying. The benchmark Shanghai Composite Index advanced 63.65 points, or 2.15%, to 3018.80, while the Shenzhen Composite Index grew 49.16 points, or 2.68%, to 1886.37. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 77.48 points, or 2.44%, to 3249.44.
Chinese brokerages rallied after policy makers loosened controls on margin lending. China Securities Finance Corp. said it will restart offering loans to securities firms for periods ranging from 7 days to 182 days. The state- backed agency, which provides funding to brokerages for margin trading, will cut interest rates on the debt to as low as 3%, it said in a Friday statement. The move is seen as providing support for the country's fluctuating markets. Citic Securities Co , Everbright Securities Co, Founder Securities Co. and Western Securities Co all jumped by the 10% daily limit Monday.
Hong Kong Stocks closed higher
The Hong Kong stock market closed tad above the boundary line, on the back of gains in brokerage stocks after Chinese authorities signaled a resumption of a portion of its short-term lending business and cut borrowing costs for brokerages. The benchmark Hang Seng Index added 12.52 points, or 0.06%, to 2068415 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, gained 45.64 points, or 0.51%, to 8928.65 points. Turnover reduced to HK$80.12 billion from HK$92.8 billion on Friday.
Shares of CR Beer (00291) dipped 2.4% to HK$20.3. COLI (00688) slipped 2.5% to HK$25.5 even though a slew of research houses are bullish for its prospects on its latest acquisition. HK & China Gas (00003) edged up 0.9% to HK$14.3. CR Power (00836) added 1.2% to HK$14.98.
HKEx (00388) soared 5.6% to HK$185.4, on reports that the SFC may lessen the rules on stock account opening in order to attract more overseas investors. Local brokerages also jumped on the bandwagon. Bright Smart (01428) shot up 10.5% to HK$2.31. First Shanghai (00227) surged 10.7% to HK$1.34. Emperor Capital (00717) hopped 9.7% to HK$0.68.
China Vanke (02202) declined 2.4% to HK$19.06 on renewed shareholding battle. China Resources Chairman Fu Yuning said he is regret that Vanke introduced Shenzhen Metro as its new shareholder.
Sensex reclaims 25,000 mark
Expectations of a bigger rate cut of 50 basis points from the Reserve Bank of India (RBI) at its monetary policy review early next month triggered the latest upmove on the domestic bourses, with barometer index, the S&P BSE Sensex, moving past the psychologically important 25,000 mark. The Sensex rose 332.63 points or 1.33% to settle at 25,285.37. The 50-unit Nifty 50 index rose 99.90 points or 1.31% to settle at 7,704.25.
Bank stocks edged higher on expectations of a bigger rate cut of 50 basis points from the RBI at its monetary policy review early next month after the government announced reduction in interest rates on various small savings schemes for Q1 June 2016 based on the prevailing G-Sec (government securities) yields. Ambuja Cements edged higher on media reports that a foreign brokerage has maintained its buy rating on the stock, stating that it remains a play on cement upcycle and should be a beneficiary of better pricing in the North India. Index heavyweight and cigarette major ITC edged higher after a foreign brokerage reportedly maintained its 'outperform' rating on the stock saying that most states have not hiked value added tax (VAT) on cigarettes in their Budget for the year ending 31 March 2017 (FY 2017). Asian Paints edged lower on reports that a domestic brokerage has reiterated its 'reduce' rating on the stock citing expensive valuations.
Aurobindo Pharma edged higher after the company said it has received final approval from the United States Food and Drug Administration to manufacture and market Naproxen Sodium Tablets USP, 220 mg (OTC). Lupin extended previous session's sharp losses triggered by speculation that widely followed investor Rakesh Jhunjhunwala is selling some of his stake.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 added 0.3% to 6641.94. Taiwan's Taiex index rose 0.02% to 8812.70. South Korea's KOPSI fell 0.1% to 1989.76. Malaysia's KLCI added 0.1% to 1718.36. Singapore's Straits Times index declined 0.9% at 2880.69. Indonesia's Jakarta Composite index ended 0.01% down at 4885.16. JAPAN MARKET CLOSED FOR PUBLIC HOLIDAY
Powered by Capital Market - Live News