Asia Pacific Market: Stocks down on bomb scare, eyes on Fed minutes

Headline equities of the Asia Pacific market mostly down mixed on Wednesday, 18 November 2015, as risk appetites hurt amid another bomb scare in Europe and as encouraging U.S. economic data boosted the case for Federal Reserve policy makers to increase interest rates in December.

On Tuesday, Wall Street shares ceded earlier gains to end almost flat after news that German authorities called off a soccer game which German Chancellor Angel Merkel was due to attend, citing threats of bombing, sparking fears of another attack coming only days after the deadly assault in Paris. Media reports that separate Air France flights to Paris from the United States were diverted as a security precaution also weighed on sentiment.

Investors are awaiting the releases of minutes from the Federal Reserve's October policy meeting later in the global day. Traders are pricing in a 66% probability that the Fed will raise rates next month after latest U.S. data provided an encouraging reading on consumer inflation.

The Bank of Japan began a two-day meeting on Wednesday, with policy makers not expected to add to record quantitative easing despite a report Monday showing Asia's second-biggest economy has slipped back into recession.

Among Asian bourses

Banks lead Australia market rebound

The Australian share market closed firmer after recouping early losses, as investors continued hunting for major banks. The benchmark S&P/ASX 200 index ended 14.90 points, or 0.29%, higher at 5133.10 points, while the broader All Ordinaries index rose 14.80 points, or 0.29%, to 5189.10 points.

Financial stocks were stronger, with top four banks leading rally. Commonwealth Bank advanced 1% to A$77.84, Westpac Bank 0.6% to A$30.77, National Australia Bank 1% to $28.79, and ANZ Bank 1% to A$26.75.

Shares of resource players were down due to falls in oil, iron ore and copper prices overnight. Newcrest Mining was down 4.2% to A$11.09. BHP Billiton declined 2.8% to A$19.81 and its rival miner Rio Tinto fell 2.7% to A$46.80. Fortescue Metal fell 3.2% to A$2.15.

Explosives maker Orica climbed 2.3% to A$15.97. Orica has flagged improving earnings for this financial year after posting A$1.267 billion full year loss due to a huge asset write-down.

Airline Virgin Australia advanced 12.7% to A$0.445, after saying it is on track to return to profit and has unveiled plans to increase capacity on its trans-Tasman routes.

Nikkei ends firmer

The Japanese share market closed firmer due to yen weakness against the dollar and divergent monetary policy expectations. The day's notable gainers comprised real estate, nonferrous metal, transportation, and pharmaceutical issues, while insurance, utilities, mining, and oil & coal products issues were among major losers. The Nikkei Stock Average advanced 18.55 points, or 0.09%, to end at 19649.18 points. The broader Topix index has gained 0.03%, or 0.42 points, to 1586.53 at the close.

Shares of insurers were down after earnings releases by the non-life insurers disappointed investors. MS&AD Insurance lost 2.3% after posting a drop in first-half net income by 22% to 86 billion yen. Tokio Marine slumped 2.2% after cutting its full-year profit target following a 40% year-on-year decline in first-half profit.

Tohoku Electric Power Co. tumbled 7.5% after selling 120 billion yen ($974 million) of convertible bonds. The convertible bonds may dilute existing shares by as much as 12%, the company said in filings on Tuesday.

China market tumbles 1%

The Mainland China stock market finished the session deeply in red in volatile trade, as risk off selling triggered after Beijing moved to once again intervene in the market and President Xi Jinping statement that the world's second-biggest economy was facing considerable downward pressure. However losses were limited after data showing Chinese home prices rose for first time in over a year in October on an annual basis, suggesting a housing market stabilisation could help re-energise the listless economy. The day's notable decliners comprised industrial and technology stocks. The Shanghai Composite Index fell 1.01%, or 36.33 points, to close at 3568.47 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.85%, or 41.30 points, to close at 2189.88. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, was down 2.06%, or 55.89 points, to close at 2661.17.

Shares of industrial and technology companies declined the most among SSE 10 industry groups due to profit booking. CRRC Corp., China's biggest maker of railway equipment, declined 1.7%. Wangsu Science & Technology Co. slumped 3.6%, paring this year's rally to 172%.

The home price data gave major Chinese property stocks a boost. Home prices in China rose in 27 out of 70 cities for October, with Shenzhen and Shanghai saw the biggest% change year-on-year. Beijing saw a modest 6.5% increment in home prices. Nationally, the prices rose 0.1% on-year, after falling 0.9% on-year in September. Real estate developer Vanke was up by 4.8% while Gemdale was saw a 4% uptick. State-owned Poly Real Estate also gained 6% while Shanghai Shimao was up 3.5%.

Hong Kong market slides 0.34%

Hong Kong stock market ended down in volatile trade, as risk appetites hurt amid another bomb scare in Europe and bets that the Federal Reserve remains on track for a rate hike in December. The benchmark Hang Seng Index declined 75.99 points, or 0.34%, to 22188.26 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, has lost 18.15 points, or 0.18%, to 10055.28 points. Turnover decreased to HK$63.66 billion from HK$73.86 billion on Tuesday.

Casino operators bore the brunt of selling after Macau's Chief Executive delivered the 2016 Policy Address yesterday, predicting that domestic demand remains subdued. Daiwa Research estimated November GGR to see a 32%-33% YoY decline.. Galaxy Ent (00027) dipped 4.6% to HK$23.75. Sands China (01928) slipped 3.4% to HK$27.05. MGM China (02282) sank 3.2% to HK$10.82.

HKEx (00388) fell 1.6% to HK$205.2 after its CEO Charles Li said the Shenzhen-HK Connect program will not be launched this year.

CITIC Bank (00998) rose 1.2% to HK$5.15. The Chinese lender has agreed to establish a direct bank with Baidu. CITIC Sec (06030) also added 3.3% to HK$19.2 after it nominated Zhang Youjun to be its new chairman. Zhang has been the assistant to the general manager of CITIC Group since October 2015.

Shares of Oil & gas explorers went up after the National Energy Administration pledged to lift significantly natural gas consumption ratio in energy mix. Kunlun Energy (00135) put on 3.3% to HK$6.26. China Gas (00384) soared 8% to HK$12.22. CR Gas (01193) surged 8.5% to HK$22.3.

Sensex extends losses

Indian benchmark indices extended losses in the afternoon trade on fresh security concerns in Paris after reports stated that three people were killed as French police raided an address in the northern suburb of Paris linked to last week's terror attacks in Paris. At 13:16 IST, the barometer index, the S&P BSE Sensex, was down 103.57 points or 0.4% at 25,760.90. The Nifty 50 index was down 25.75 points or 0.33% at 7,811.80.

Tata Steel was down 1.92% at Rs 230. The stock hit a high of Rs 234.80 and a low of Rs 229.05 so far during the day. The company during market hours today, 18 November 2015, announced that it has taken a step towards beginning a new chapter by dedicating its Kalinganagar steel plant to Odisha. The Kalinganagar steel plant is the largest single-location Greenfield steel project in India. The first phase of 3 million tonnes per annum (MnTPA) of 6 MnTPA will produce world-class flat, lighter, high-tensile strength steel. Tata Steel will augment its Indian production to around 13 MnTPA of crude steel in India and will now expand its portfolio to high-grade flat products for ship-building, defence equipment, energy and power, infrastructure building, aviation and lifting & excavation, Tata Steel said. This expansion will also reinforce Tata Steel's leadership position in the domestic automotive segment, the company said in a statement.

Valiant Communications surged 16.39% at Rs 87 after the company said it has received the letter of awards from Power Grid Corporation of India (PGCIL) for supply, installation and commissioning for Communication Equipment Package (PDH Equipment), for West Bengal State Electricity Distribution Company (WBSETCL) and Jharkhand (Jharkhand State Electricity Board) Consultancy projects. The gross value of letter of awards is Rs 8.03 crore, Valiant Communications said. The company made the announcement during trading hours today, 18 November 2015.

Elsewhere in the Asia Pacific region: Taiwan's Taiex index dropped 0.94% to 8340.47. South Korea's KOPSI shed 0.04% to 1962.88. Malaysia's KLCI lost 0.3% to 1656.50. Singapore's Straits Times index declined 0.8% at 2892.55. Indonesia's Jakarta Composite index rose 0.16% to 4508.21. New Zealand's NZX50 added 0.2% to 5979.81.

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