Asia Pacific market: Stocks fall on early US rate hike woes

Asia pacific share market closed down in thin trade on Monday, 28 March 2016, amid worries about potential U.S. rate increases after fairly strong consumer spending led to an upward revision in US economic growth in the fourth quarter of 2015.

Data out Friday showed that the U.S. economy grew at a 1.4% seasonally adjusted annualized rate in the fourth quarter, compared with a previous estimate for 1% growth. The increase came on the back of a surge in consumer spending, which was also much stronger than first thought. The news ramped up expectations that the Federal Reserve will announce another hike in interest rates

All eyes will be on Fed Chair Janet Yellen who speaks on the US economy and monetary policy on Tuesday, with investors looking for further clues on the number and timing of rate hikes this year.

Hawkish comments from several US Federal Reserve officials last week put investors on guard for the possibility of at least two rates increases this year, triggering a widespread correction across commodities and bolstering the dollar, in which they are denominated.

Among Asian bourses

Nikkei gains 0.8%

Japan share market advanced on Monday, 28 March 2016, as investor's sentiments boosted by the dollar strengthened against the yen after fairly strong consumer spending led to an upward revision in US economic growth in the fourth quarter of 2015. The Nikkei Stock Average rose 131.62 points, or 0.8%, to 17134.37 after gaining 1.7% last week.

Stocks that cater to domestic demand, such as pharmaceutical and food companies, led the market higher. Ono Pharmaceutical Co. rose 3.7% to 24,175 yen. Chocolate and yogurt maker Meiji Holdings Co. gained 2.3% to Y9,260.

Seven & i Holdings Co. added 2% after activist investor Daniel Loeb urged the convenience store operator to avoid letting nepotism determine its next chief executive officer, and to shrink and divest some of its other businesses.

Sharp Corp. climbed 4% after the struggling electronics maker and Taiwan's Foxconn Technology Group said they're pushing to close the rescue deal that has been held up by disagreement for more than a month.

Drugmaker PeptiDream Inc. surged 12% after saying it signed a joint research and development agreement with Asahi Kasei Pharma Corp.

China Market falls 0.73%

Mainland China stock market closed down after reversing initial gains on Monday, 28 March 2016, as investors opted withdrawing profit off the table on caution ahead of key economic figures later this week. Mainland Chinese shares have recovered 12% since hitting a January low, on hopes for fresh measures from Beijing to kickstart the economy, which is growing at rates not seen for a quarter of a century. Traders are now awaiting the release of closely watched manufacturing data at the end of the week, hoping for fresh signs of improvement in the Asian economic giant. The benchmark Shanghai Composite Index declined 21.61 points, or 0.73%, to 2957.82. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, dropped 0.9%, to 3169.73.

The indexes were firm in morning trading, helped by data on Sunday showing industrial profits of Chinese firms returned to growth in the first two months of the year despite a slowing economy. Data released yesterday showed the end of seven months of negative growth in industrial profits in January and February, with a 4.8pc rise marking the fastest growth since July 2014. However, the equity gauges were dragged lower by property shares in afternoon trade, amid media reports that financial regulators in the eastern province of Zhejiang had begun to closely scrutinize real estate financing, and warned against financial risks associated with rapid property price rises in cities such as Nanjing and Suzhou.

Major developers including Gemdale Corp properties and Poly Real Estate fell, apparently on fears that real estate curbs, already adopted in Shanghai and Shenzhen, could spread to other cities in the country.

Sensex, Nifty hit lowest closing level in more than a week

Fears of an early interest-rate increase in the United States pulled Indian stocks lower, with the barometer index, the S&P BSE Sensex, falling below the psychologically important 25,000 mark. The Sensex fell 371.16 points or 1.46% to settle at 24,966.40. The Nifty fell 101.40 points or 1.31% to settle at 7,615.10. The Sensex and the Nifty, both, hit their lowest closing level in more than a week. Stocks of metal and mining firms, public sector banks and index heavyweight HDFC led losses for the two key benchmark indices. All the nineteen sectoral indices on BSE declined.

ONGC declined in volatile trade after the company's board of directors approved the field development plan (FDP) for the development of fields falling under cluster 2 of deep water NELP block KG-DWN-98-2 with estimated capital expenditure of a staggering $5076.37 million (Rs 34012 crore). NTPC edged higher after the company announced that the unit-4 of 195 megawatts (MW) of Muzaffarpur Thermal Power Station of Kanti Bijlee Utpadan Nigam, a subsidiary company of NTPC has been commissioned on 24 March 2016.

Elsewhere in the Asia Pacific region: Taiwan's Taiex index slipped 0.2% to 8690.45. South Korea's KOPSI dropped 0.1% to 1992.54. Malaysia's KLCI slipped 0.1% to 1702.41. Singapore's Straits Times index closed 0.6% down at 2830.29. Indonesia's Jakarta Composite index declined 1.1% to 4773.63. Markets in Hong Kong, Australia and New Zealand were closed for the Easter break.

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