Asia Pacific Market: Stocks down after China flash PMI data

Asia Pacific Market: Stocks down after China flash PMI data

Headline equities of the Asia Pacific market closed mostly weaker on Thursday, 20 November 2014, on concerns that the world's second biggest economy after a gauge of factory output slumped to a six-month low. The MSCI Asia Pacific Index slipped 0.6% to 138.90, after dropping 0.7% yesterday.

China's factory activity stalled in November as output shrank for the first time in six months, a private survey showed on Thursday. The HSBC flash Purchasing Managers' Index (PMI) for November clocked in at the breakeven level of 50.0 that separates expansion from contraction, compared with the 50.4 final reading in October. Overall, new orders picked up slightly but new export orders slowed markedly, dragging on activity. The factory output sub-index fell to 49.5, the first contraction since May.

China's top economic planning body said on Wednesday that the economy faces increasing downward pressure in 2015. China's gross domestic product grew at an annual rate of 7.3% in the third quarter, the slowest pace since the first quarter of 2009, when China's growth rate slumped to 6.6% amid the depths of the global financial crisis. The government has a growth target of around 7.5% for 2014.

HSBC chief economist for China noted that the fall in production was accompanied by disinflationary forces and slowdown in labor markets.

From Japan, the finance ministry said on Thursday that Japanese exports jumped nearly 10% last month, while imports ticked up 2.7%. That translated into a monthly trade deficit of 709.9 billion yen, or nearly 36% lower than a year-before shortfall of 1,100.4 billion yen.

Among Asian bourses

Nikkei ends higher on weaker yen

Japanese share market closed slight higher, boosted up by yen depreciation to a seven-year low against greenback. The Nikkei Stock Average ended ended up 0.1% at 17,300.86 following the prior session's 0.3% fall.

Shares of exporters benefited the most in Tokyo market today, thanks to the higher dollar against yen. The yen dropped 0.6% to 118.64 per dollar, its weakest level since August 2007. A weaker yen inflates the profitability of Japanese exporters, while giving them scope to price goods more competitively in foreign markets.

Toyota gained 1% to 7,098 yen. Honda Motor Co., which gets about 80% of its sales from outside Japan, rose 1.5% to 3,676.5 yen. Canon Inc., which gets more than 80% of its revenue internationally, added 1.1% to 3,676 yen.

Construction machinery makers Komatsu and Hitachi Construction Machinery fell 1.4% and 0.6% to 2711 yen and 2494 yen, respectively, hurt by the weak China PMI figures, as both firms have large exposures to the China market.

Industrial fiber-maker Toray Industries gained 6.4% to 930 yen after announcing that its carbon-fiber materials have been used in Toyota's Mirai fuel-cell vehicle. The Mirai's December launch represents the first time such fiber is used for structural parts in a mass-produced vehicle.

Sumitomo Mitsui Trust Holdings rose 1.7% to 480.60 yen after in its first half results briefing the company said it is possible that the bank's common equity Tier-1 ratio could reach about 10% at the end of the current fiscal year, two years ahead of plan.

Aussie market falls 0.98%

Australian share market closed down for fourth straight day, hit by more weak economic signs from China and a fresh drop in iron ore prices. All sectoral indices dived into sea of red, with shares in bullion, material, consumer staples, realty and financial companies being major decliners. The benchmark S&P/ASX 200 Index declined by 52.60 points, or 0.98%, to 5316.20 and the broader All Ordinaries Index fell by 50 points, or 0.93%, to 5302.50.

Shares of materials and resources companies extended fall after iron ore prices dropped to a fresh five-year low and due to disappointing Chinese factory data. HSBC's preliminary purchasing managers' index shows manufacturing activity in China fell to a six-month low in November, reinforcing fears about China's economy. The index fell to 50.0 this month from 50.4 in October. Resources giant BHP fell 2.7% to A$31.80 while main rival Rio Tinto down 2.7% to A$56.41. Fortescue shares dropped 3.7% to A$2.64, while fellow iron ore miners Atlas Iron fell 4.88% to 21.5 cents and Mount Gibson Iron was flat at 40 cents.

Shares of Fisher & Paykel rose 2.15% to A$5.23 after New Zealand appliance maker first-half net profit rose 10% to A$48.917 million and announced to pay a dividend of 5.8 cents, up from the year earlier 5.4 cents.

Shares of FlexiGroup plummeted 11.82% to A$3.06 after the diversified consumer finance products group projected a cash net profit guidance in a range between A$90-91 million for 2014-15 but bringing forward a one-off loss provision of A$2.5 million after tax in relation to a commercial leasing contract.

Shanghai Composite rises 0.07%

Mainland China share market closed marginally higher after fluctuating between gains and losses, as risk sentiments subdued after China flash PMI data showed factory output shrank for first time in 6 months in November. The Shanghai Composite Index rose 0.07%, or 1.67 points, to 2452.66 at the close.

Brokerages advanced after Premier Li Keqiang said yesterday the government will accelerate reform of initial public offerings. The China Securities Regulatory Commission said it's preparing to move toward an American-style IPO registration system and may announce a plan by the end of the year. The new framework would ensure issuers meet disclosure requirements, leaving investors to judge if companies are fairly priced. Citic Securities gained 1.4%, Haitong Securities added 1.8% and Guoyuan Securities Co. surged 5.6%.

Hang Seng falls 0.1% on the fourth day

Hong Kong share market closed down for fourth consecutive session in quiet trade, on waning enthusiasm over Shanghai-HK Stock Connect and after a gauge of factory output slid to a six-month low. The Hang Seng Index ended down 23.67 points to 23349.64, off an intra-day high of 23252.63 and low of 23461.02. Turnover fell to HK$61.10 billion from HK$65.12 billion on Wednesday.

The northbound quota balance was RMB10.72 billion, while the southbound quota balance was RMB10.3 billion, representing the utilisation rates of 17.5% and 1.9% respectively.

Bourse operator Hong Kong Exchanges and Clearing dipped dipped 1.3% to HK$165.8. The stock has fallen 10% since the Connect launch. CLSA said it may consider a downgrade of the HKEx on concerns of earnings pressure due to the slow start of the through train and less optimistic outlook.

Energy stocks rebounded on news that China has completed the phase one construction of four strategic petroleum reserve bases. CNOOC (00883) gained 2% to HK$11.48. PetroChina (00857) edged up 0.8% to HK$8.54. Sinopec (00386) gained 0.9% to HK$6.23.

Sensex, Nifty eke out small gains

In a sudden reversal, key benchmark indices staged a sharp recovery in late trade led by gains in IT shares and recovery in select bank shares. The barometer index, the S&P BSE Sensex maintained the psychological 28,000 mark after moving above and below that level during the day. The Sensex advanced 34.71 points or 0.12% to settle at 28,067.56. The market breadth indicating the overall health of the market was negative.

The provisional data released by the stock exchanges after trading hours yesterday, 19 November 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 71.80 crore on that day.

Shares of power generation, metal and mining and cement stocks declined. Capital goods stocks edged lower. IT stocks advanced on weak rupee.

NTPC lost 1.32% at Rs 142.20. The company during market hours today, 20 November 2014 said that it has launched a issue of $500,000,000 fixed rate unsecured notes due 2024 which were priced on 19 November 2014. The notes carry a coupon of 4.375% per annum payable semi-annually and are of 10 years tenor.

Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 1.29% to 9078.87. South Korea KOSPI was 0.45% down at 1958.04. New Zealand's NZX50 added 0.1% to 5526.95. Singapore's Straits Times index fell 0.57% at 3315.60. Malaysia's KLCI fell 0.12% to 1822.29. Indonesia's Jakarta Composite index fell 0.57% to 5093.57.

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