Asia Pacific Market: Stocks fall amid geopolitical risk jitters

Asia Pacific share market ended down on Wednesday, 25 November 2015, as risk appetite was sapped by heightened geopolitical tensions in the Middle East following Turkey's downing of a Russian fighter jet the previous day.

Turkey shot down the warplane on Tuesday after Ankara claimed it entered Turkish airspace, but Moscow has rejected those claims. President Vladimir Putin called the downing "a stab in the back," and warned it would have serious consequences for the Russian-Turkish relationship.

Among Asian bourses

Australia Market declines for second day in row

The Australian share market declined for second straight session on Wednesday, 25 November 2015, as investors continued withdrawing profit off the table, echoing weakness across the region after the Turkish military shot down a Russian fighter jet, with shares of A-REITs, Telecoms Services and Utilities sectors being major losers. At the close, the benchmark S&P/ASX 200 index ended 32.70 points, or 0.63%, lower at 5193.70 points, while the broader All Ordinaries index declined 31.80 points, or 0.6%, to 545.20 points. Falling stocks outnumbered advancing ones on the Australia Stock Exchange by 549 to 399 and 139 ended unchanged.

Shares of energy companies bucked the market to advance after oil prices gained overnight on expectations for possible supply disruptions amid heightened tensions between Russia and Turkey. Among energy stocks, Santos and Origin Energy gained 3.5% and 3.1%, respectively, while AWE rose 3.4% and Liquefied Natural Gas advanced 7.4%.

Shares of resources companies were down after price of iron ore fell 1.8% on Tuesday to US$43.40 a metric tonne, on news of further falls in the iron ore price. Societe Generale announced a downgrade of its iron-ore price projections overnight, citing expectations of slowing Chinese steel output at a time when cheap Australian supplies of ore are rising. The bank cuts its annual iron-ore price forecast until 2018 to US$45/tonne from US$50/tonne. Among mining stocks, BHP Billiton was down 0.2%, Rio Tinto was 0.6% lower and Fortescue Metals Group lost 1.4%

Bank stocks remained vulnerable to profit-taking after steep gains over the past couple of weeks. Australia & New Zealand Banking Group shed 1.2% for the day. National Australia Bank and Commonwealth Bank of Australia both lost 0.8%, although Westpac was flat.

Nikkei snaps five-day winning streak

The Japanese share market ended down for the first time in six sessions on Wednesday, 25 November 2015, as nervous investors sought low-risk assets after a mixed performance on Wall Street overnight and worries about geopolitical tension after Turkish jets shot down a Russian warplane near the Syrian border. The day's notable losers comprised Securities & Commodities Futures, Banks, Pulp & Paper, and Air Transportation issues, while Electric Power & Gas, Mining, Oil & Coal Products, and Iron & Steel issues were among major gainers. The Nikkei 225 index at the Tokyo Stock Exchange has lost 0.39%, or 77.31 points, to 19847.58, while the wider Topix index of all first-section shares finished down 0.7%, or 11.27 points, at 1594.67. Falling issues outnumbered rising ones 1,294 to 518 on the TSE's first section, while 106 issues were unchanged. Volume decreased slightly to 2,007 million shares from Tuesday's 2,062 million shares.

Shares of exporters were major drag on the market as yen gained against the U.S. dollar, with declines were led by smartphone parts maker Alps Electric Co, which fell 4.0%, and agrochemicals exporter Nippon Soda Co, which also fell 4.0%. Carmaker Mazda Motor Corp slid 1.5%, while electronics maker Panasonic Corp fell 1.7%.

Shares of brokerages and lenders were also down. Brokerage Nomura Holdings Inc shed 2.3%, while Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group Inc both fell 2.1%.

Shares of defensive companies such as utilities Tokyo Electric Power Co, was up 2.9%, and Chubu Electric Power Co, was up 2.0%, amid concerns about the impact of further turmoil in the Middle East.

China Market rises to two-week high

The Mainland China stock market advanced to a two-week high on Wednesday, 25 November 2015, with technology and gold companies leading rally, amid sense of calm after announcement of resumption of initial public offerings and scrapping a rule requiring brokerages to hold net long positions and limited leveraged bets. The Shanghai Composite Index advanced 0.88%, or 31.82 points, to close at 3647.93 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, grew 1.9%, or 43.53 points, to close at 2343.62. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, was up 2.89%, or 81.52 points, to close at 2897.57. The Shanghai gauge has rebounded 25% from its August low, after tumbling 43% from its June peak.

Shares of technology companies jumped, with East Money Information Co., the second-biggest stock in the ChiNext, surging 3.9%. Hundsun Technologies Inc., whose financial investment platform known as HOMS allows trust firms and online lenders to provide leveraged trading facilities to clients, jumped 5.6%.

Shares of for bullion producers rose as gold prices jumped on spurring demand for haven assets amid rising geopolitical tensions after Turkey said it downed a Russian fighter jet. Zhongjin Gold Corp. led gains, advancing 3%, while Shandong Gold Mining Co. surged 4.2%.

Hong Kong Market fall 0.4%

The Hong Kong stock market to finish lower, following the soft tone of other regional bourses today amid escalating geopolitical tensions following Turkey's downing of a Russian fighter jet a day earlier. The benchmark Hang Seng Index declined 89.63 points, or 0.4%, to 22498 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, has lost 28.76 points, or 0.28%, to 10127.87 points. Turnover increased to HK$64.8 billion from HK$57.2 billion on Tuesday.

Shares of energy players gained after crude oil prices rose, with Brent and US oil futures rising nearly 3% amid escalating geopolitical tensions after Turkey shot down a Russian fighter jet on Tuesday near Syrian border. CNOOC (00883) gained 3.3% to HK$8.81. PetroChina (00857) added 0.4% to HK$5.73. Sinopec (00386) softened 0.6% to HK$4.94.

StanChart (02888) fell 1.4% to HK$66.65 after it was reported that the banking group plans to consolidate its South Korean financial company into the bank to streamline its businesses. HSBC (00005) also dipped 0.7% to HK$61.95.

HTSC (06886) jumped 4% to HK$20.55 on the bullish comments from HSBC Research. The research house initiated coverage on the broker, with a "buy" rating and target price of HK$24. Other Chinese brokerages were also higher. CC Securities (01375) soared 6.2% to HK$4.79. Haitong Sec (06837) added 1.2% to HK$14.68.

Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.2% to 8386.13. South Korea's KOPSI de-grew 0.34% to 2009.42. Malaysia's KLCI added 0.44% to 1684.42. Singapore's Straits Times index fell 1.1% at 2891.58. Indonesia's Jakarta Composite index rose 0.88% to 4585.55. New Zealand's NZX50 slipped 0.53% to 6069.14. Indian equity markets were shut on Wednesday on account of Gurunanak Jayanti.

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