Asia Pacific Market: Stocks closed mixed on US, Japan data

Asia Pacific share markets were mixed on Thursday, January 31, 2013, as investors chose to take out some gains following recent bull rally sent key regional blue chips to highest level in 17-months. The MSCI Asia Pacific Index, the benchmark regional equities gauge, was little changed around late afternoon after earlier dropping as much as 0.4%. An unexpected contraction in the US economy at the end of 2012 and weaker than expected industrial production data from Japan blamed the most for today's profit booking.

The market sentiment was hit adversely after data released by the US Commerce Department on Wednesday, 30 January 2013, showed a surprise fourth-quarter contraction in the US economy which is the world's biggest economy. Official data showed that US GDP unexpectedly fell for the first time since mid-2009, by 0.1% in the fourth quarter after surging up by 3.1% in the third quarter, hurt by big cuts in defense spending, falling exports and sluggish growth in company stockpiles.

The Ministry of Economy, Trade and Industry said on Thursday that Japan preliminary reading on industrial production dropped 7.8% year-on-year in December following the 5.5% fall in the previous month. Industrial output was up a seasonally adjusted 2.5% in December, following the 1.4% contraction in November.

Risk appetite was also subdued after statement from the Federal Reserve on Wednesday that US growth had paused in recent months. The Federal Reserve stated that it will continue buying bonds even as policy makers offered a mixed review of the economy. Fed officials noted that economic activity had paused in recent months, largely because of weather and other temporary factors, and stressed lingering down side risks to the economy. Fed officials, however, said they expected growth would continue at a moderate pace and that the jobs market would improve.

In the Asia Pacific region, the Nikkei 225 Stock Average climbed 0.2%, reversing a 1% loss. Australia's S&P/ASX 200 Index fell 0.4%, snapping a 10-day increase that was the longest since 2003. Hong Kong's Hang Seng Index slid 0.4% from its highest close since April 2011.

China's Shanghai Composite index ended 0.1% higher as gains in resources overshadowed losses in realty. India's BSE lost 0.55% due to selling mainly in metal, banking, IT and capital goods sectors. South Korea's Kospi shed 0.1% after Deputy Finance Minister Choi Jong Ku proposed taxing trading in currency and bonds to limit speculative capital inflows.

Elsewhere, key benchmarks in Thailand, the Philippines, Indonesia and Malaysia were little changed. New Zealand stock market rose 0.1%.

Back to country wise, the Japanese share market ended higher after recouping losses late afternoon, thanks to buying from foreign funds on hopes for futures gains. The benchmark Nikkei Stock Average advanced 24.71 points to end the day at 11,138.66, its highest point since April 27, 2010, while the broader Topix index escalated 5.58 points to finish at 940.25.

The Nekkei225 index nearly fell below briefly 11,000 level one point of time due to yen's strength, but the benchmark index recouped lost ground to close firmly above the psychologically important 11,000 line for second straight day as overseas investors began buying stocks on the dips toward the market close on hopes for future gains.

Almost two-third of the TSE sectors advanced today, with financials were key spot lighted after Sumitomo Mitsui Financial Group's announcement of a cumulative first-through-third quarter consolidated net profit of 550 billion yen, representing a 34% jump on-year rise. Shares of Sumitomo Mitsui Financial Group surged 5.2% to 3,670 yen, stoking buying in its rivals as well. Mitsubishi UFJ Financial Group added 3.6% to 521 yen and Mizuho Financial Group gained 2.8% to 183 yen. Nomura Holdings added 2.2% to 526 yen and Daiwa Securities Group was higher by 4.8% to 531 yen.

Oji Paper climbed up 5% to 296 yen on reports the company is likely to raise its group operating profit by about 20% on-year to nearly 19 billion yen in the December quarter, helped in part by a weaker yen.

Canon Inc also fell 0.6% to 3,365 yen after announcing a full fiscal year operating profit of 323.9 billion yen, well below the 356 billion yen forecast by management.

Nintendo declined 4.6% to 8,920 yen on disappointment after announcing a weaker than expected operating profit of 23.3 billion yen for the December quarter, as weak Wii-U and 3DS sales. The firm also revised down its full year guidance to 20 billion yen operating loss, down from 20 billion yen operating profit estimate.

In economic news out from Tokyo, the Ministry of Economy, Trade and Industry said on Thursday that Japan preliminary reading on industrial production dropped 7.8% year-on-year in December following the 5.5% fall in the previous month. Industrial output was up a seasonally adjusted 2.5% in December, following the 1.4% contraction in November.

The Ministry of Land, Infrastructure, Transport and Tourism said Japanese housing starts climbed at a slower than expected pace of 10% in December from a year ago, from 10.3% in November. The number of annualized housing starts totaled seasonally adjusted 880,000 compared to 906,000 in the previous month. At the same time, construction orders received by 50 big contractors recovered in December after easing for two consecutive months. Orders were up 4.8% annually, following a 2.1% drop in November.

In Australia, the Australian market declined for the first time in eleven straight days today as investors chose to cash out some gains off the table ahead of the beginning of reporting season next week and on tracking weak offshore cues. At close, the benchmark S&P/ASX200 declined 17.90 points, or 0.4%, to 4878.80, while the broader All Ordinaries index lost 18.10 points, or 0.4%, to 4901. For the month, the ASX200 was up 4.94%, the best monthly performance since January last year. Over the past 10 days alone, the market improved by around 3.7%.

Australian retailers and other consumer goods producers went lower, with Woolworths shares slumped by 1.3% to A$31.24 on disappointment after the Australia's biggest supermarket chain reported weaker than expected quarterly sales numbers, while rival Wesfarmers also lost ground, down 1.4% to A$37.60 and food manufacturer Goodman Fielder dropped 2.9%. Myer fell 2.7% to A$2.49, while rival David Jones lost 1.6% to A$2.50 and Harvey Norman dropped 1.8% to A$1.96.

In key economic numbers in Australia, the Australian Bureau of Statistics said on Thursday that Australian export price index was down 2.4% compared to the previous three months in the fourth quarter of 2012, following the 6.4% contraction in the third quarter. Import prices were up 0.3% on quarter in Q4, after declining 2.4% in the three months prior.

In China, Chinese share market closed slight higher after moving in and out of the neutral line, with gains in utilities, energy, and materials blue chips were more than offset by losses in the shares of realty, drug makers, consumer goods producers, and distilleries. The benchmark Shanghai Composite index ended the day at 2,385.42, increased by 2.95 points from prior day closure.

Mainland Chinese market moved zigzag in tight range for straight second day before settling tad higher as many investors hesitant to take more riskier stance on cautious ahead of the announcement of key economic numbers later tomorrow as well as on worried about market overheating after the benchmark has surged more than 22% from four-year low on Dec. 3, 2012.

Coal players shares in China's ended with firm footing today higher after the Ministry of Housing and Urban-Rural Development said that government should gradually develop warm supply facilities in a decentralized way in the southern part of the country. China Shenhua Energy Co gained 1.1% to 24.55 yuan and Yanzhou Coal Mining Co added 0.8% to 18.41 yuan. Shanxi Lanhua Sci-Tech Venture Co added 0.3% to 22.02 yuan, Shanxi Lu'an Environmental Energy Development Co 0.5% to 22.67 yuan, and Yang Quan Coal Industry (Group) Co 2.7% to 15.68 yuan.

Chinese developers stocks tumbled, dragging the SSE Real Estate index, benchmark measures of property developers in Mainland, declined 3.9% to 3716.46 on market talks that the Beijing government will introduce the property tax as early as the first half of this year. Among developers, China Vanke, the nation's biggest developer, declined 5.2% to 12.01 yuan. Poly Real Estate, the second largest developer, dropped 6.2% to 13.22 yuan. Gemdale Corp shed 5.6% to 7.40 yuan on profit taking following sharp gain prior day after announcing its HK listed subsidy raised HK$700 million through a private placement.

In Hong Kong, HK shares wrapped today's trading broadly in red terrain, with realty and resources players led falls as weak offshore cues propelled investors to book some gain after surge in key index to near two-year highs prior day. Hang Seng Index lost 92.53 points to 23,729.53 and the Hang Seng China Enterprises Index fell 41.65 points to 12,130.59.

34 out of 50 blue HK chips shares declined today, with materials and resources and energy players led retreat. China Coal Energy Co sank 1.1% to HK$8.65 and China Shenhua Energy Co 0.5% to HK$33.35. Aluminum Corp of China fell 0.5% to HK$3.74 after warning for full year loss in 2012. PetroChina Co melted 0.7% to HK$11.06 and China Petroleum & Chemical Corp declined 0.1% to HK$9.41. CNOOC dived 2.3% to HK$16.02 after issuing a below-forecast production estimate for 2013.

In India, the key benchmark indices declined today, with ICICI bank was hit by profit-booking after beating forecasts with its quarterly earnings, while the expiry of January derivatives kept trading volatile towards the end of the session. The BSE Sensex ended provisionally 0.55% lower, while the 50-share Nifty ended down 0.35%.

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