Asia Pacific Market: Stocks fall on slowing factory activity in China and Europe

Asia Pacific share market closed down on the first trading day of the week, Monday, 01 December 2014, pressured by risk aversion selloff after slowing factory activity in China and Europe. MSCI's broadest index of Asia-Pacific shares outside Japan fell 2%, hitting six-week lows

The two gauge of China's factory activity indicated manufacturing had lost momentum in November despite a recent cut in interest rates, in a new sign an economic slowdown is deepening. China's official measure of manufacturing activity slipped to its lowest showing since March while a private gauge compiled by HSBC and research firm Markit touched a six-month low. China's official PMI index fell to 50.3 in November compared with 50.8 in October, the National Bureau of Statistics said in a statement on Monday. The competing PMI released by HSBC and data provider Markit came in at 50.0 in November compared to 50.4 in October, HSBC Holdings PLC said on Monday.

Investors also weighed a fresh round of economic data from throughout Europe, highlighted by further slowing in manufacturing activity in the eurozone. Clouds over Europe's recovery remained dark as the Markit Economics eurozone manufacturing gauge fell from 50.6 in October to 50.1 in November, below its earlier flash estimate of 50.4, with Markit chief economist Chris Williamson warning that "there is a risk that renewed rot is spreading across the region from the core."

Crude oil price, meanwhile, extended its fall to below $65 a barrel following a surprise move Thursday by the world's biggest oil producing nation to maintain their production target levels, meaning a glut in the market is likely to remain. Analysts predict prices could fall as low as $60 a barrel in the near term. On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded as low as $64.10 a barrel on Monday, down $2.05 from late Friday in New York. They slid 17.9% in November.

Among Asian bourses

Aussie market falls 2%

Australian share market closed steep lower today, as selloff pressure across the board, with mining and energy companies being major losers after fall crude oil, copper and other commodities to multiyear lows. The S&P/ASX 200 index stumbled 105.3 points, or 2%, to end the day at 5207.7. That adds to Friday's 1.6% fall in the benchmark index.

Energy was the worst-performing sector, driving the losses as it shed 6.4% after crude oil prices plunged another 2.6% to an almost six-year low with Brent crude oil fetching $US68.34 per barrel after OPEC's decision not to cut production on last Thursday. Among energy shares, Australia's biggest oil producer Woodside Petroleum lost 4.3% to A$34.20. Oil Search lost 8.5% to A$7.29, Origin Energy dropped 4.5% to A$11.70 and Santos slid 9.8% to A$9.11.

In the minerals sector, Resources giant BHP Billiton lost 5.3% to A$29.27, while main rival Rio Tinto fell 4.1% to A$56.66 amid weaker than expected manufacturing PMI data. Fortescue Metals Group shed 10.9% to A$2.62 after slashing its capital expenditure estimates for the current financial year from A$1.3 billion to A$650 million.

Financial stocks were also down, with top four lenders being major decliners on caution ahead of the Reserve Bank of Australia's interest rate decision on Tuesday. Commonwealth Bank of Australia lost 1.1% to A$79.80, while Westpac Banking Corporation lost 1% to A$32.24. ANZ Banking Group fell 0.8% to A$31.66, and National Australia Bank shed 1.4% to A$32.15.

Grocery wholesaler and retailer Metcash, which owns the IAG supermarket franchise, dropped 16.5% to A$2.18 after showing a 9% drop in interim profit and lowering its full-year earnings guidance.

Nikkei hits seven-year high on yen depreciation, oil prices

Japanese financial market began December with positive note, sending the benchmark Nikkei Stock Average higher by 130.25 points, or 0.75%, to 17590.10, a fresh seven-year high, as market participants chased for value buying across the board, with exporters, airline and transport logistics stocks being major gainers propelled by drops in the yen's value and the price of energy.

With Nymex oil futures hitting fresh multiyear lows, airlines, shippers and other fuel-intensive industries continued moving upward. Japan Airlines gained 4.2% to 3635 yen. ANA Holdings Inc. added 4% to 303.80 yen.

Shipping lines also saw some upside with Nippon Yusen K.K., Japan's biggest shipper, adding 1.8% to 341 yen. Kawasaki Kisen added 0.3% to 312 yen. Fuji Heavy Industries gained 1.5% to 4381 yen. Tire maker Bridgestone also ended up 1% to 4122 yen.

Power companies similarly cheered the cheaper oil prices, with Chubu Electric Power Co adding 2% to 1416 yen, Kansai Electric Power Co up 1.6% to 1209 yen, and Hokkaido Electric Power Co up 1.1% to 983 yen.

Forex-sensitive exporters were also higher amid renewed weakness for the Japanese yen against the dollar. Sony Corp. added 1.5% to 2640 yen, Canon Inc improved by 2.8% to 3906 yen, Renesas Electronics Corp rose 3.6% to 847 yen, Toyota Motor Corp jumped 1.6% to 7429 yen, and Mazda Motor Corp was up 2.7% to 3147 yen.

China stocks fall on profit booking, weak manufacturing data

Mainland China share market closed slight down, pressured by profit booking after strong rally last week and signs that China's economy continues to weaken. The Shanghai Composite Index fell 2.68 points, or 0.1%, to 2680.16 at the close. Full-day turnover was strong, with 446.79 billion shares changed hand worth of 401.12 billion yuan. The benchmark measure advanced 7.9% last week, after the central bank unexpectedly lowered deposit and lending rates to support an economy.

Among the most active stocks in Shanghai were Everbright Bank, up 3.2% to 3.92 yuan; Hainan Airlines , up 10.14% to 3.15 yuan and Agricultural Bank Of China, down 0.7% to 2.83 yuan. In Shenzhen, TCL Corp, up 3.7% to 3.38 yuan; BOE Technology, up 1.1% to 2.75 yuan and Ping An Bank, down 2% to 12.19 yuan were among the most actively traded.

Hang Seng slips 2.58% down

Hong Kong share market ended sharply down, pressured by pro-democracy protests in the city and disappointing China's manufacturing surveys which pointed to further economic weakness. The Hang Seng Index declined 620 points, or 2.58%, to 23367.45, off an intra-day high of 23731.76 and low of 23318.48. Turnover increased to HK$105.14 billion from HK$72.88 billion on Friday.

As for the Shanghai-HK stock connect flow, the northbound quota balance was RMB11.602 billion, while the southbound quota balance was RMB10.219 billion, accounting for 89.25% and 97.33% of the daily allowed quotas respectively.

Shares of energy companies were worst-performer in Hong Kong after crude oil prices plunged another 2.6% to an almost six-year low with Brent crude oil fetching $US68.34 per barrel after OPEC's decision not to cut production on last Thursday. Among energy shares, Kunlun Energy (00135) slid 5.5% to HK$7.93. CNOOC (00883) slipped 5.5% to HK$10.72. PetroChina (00857) declined 4.4% to HK$8.04. Sinopec (00386) dropped 4% to HK$6.09.

Airline stocks extended gains, with Cathay Pacific adding 3.4% to HK$17.66. It was the top blue-chip winner. China Southern Airlines (01055) gained 2% to HK$3.6. Air China (00753) inched up 0.5% to HK$5.98. China Eastern Airlines (00670) was up 0.3% to HK$3.89.

Shares of casino players declined after Macau government announced that November gross gaming revenues (GGR) fell 19.6% to MOP24.3 billion. Galaxy Ent (00027) fell 2.6% to HK$51.55. Sands China (01928) dipped 2.1% to HK$45.5. Wynn Macau (01128) softened 1.4% to HK$24.95. MGM China (02282) slipped 1.3% to HK$23.15.

Sensex snaps 3-day winning streak

Indian stock market closed down after official data showing a slowdown in the nation's economic growth in Q2 September 2014 and on tracking weakness in global stocks, with shares of oil exploration & production companies and mining & metal stocks leading the decline. The Sensex fell 134.37 points or 0.47% to settle at 28,559.62, its lowest closing level since 27 November 2014. The Nifty skidded 32.35 points or 0.38% to settle at 8,555.90.

Shares of FMCG major Hindustan Unilever scaled record high. Shares of oil production and exploration firms dropped as crude oil prices declined. Maruti Suzuki India edged higher in volatile trade after reporting strong sales growth for the month just gone by. Mahindra & Mahindra (M&M) declined on reporting drop in auto and total tractor sales in November 2014. TVS Motor Company rose after reporting strong sales in November. IT stocks gained on weak rupee. Shares of power generation and power distribution companies edged lower.

Metal and mining shares fell as a Chinese manufacturing gauge dropped in November 2014. Realty stocks edged lower. Airline stocks jumped on reports that state-owned oil marketing companies have reduced the prices of aviation turbine fuel (ATF) by 4.1% with effect from 1 December 2014.

On the macro front, the latest data showed India's economic growth eased in Q2 September 2014, mainly due to moderation in the growth of the agricultural and industrial sectors. Meanwhile, the result of a survey today, 1 December 2014, showed that manufacturing operating conditions in India improved for the thirteenth month in a row in November 2014, supported by stronger growth of output and new work intakes.

Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.76% to 917.71. South Korea KOSPI was down 0.79% to 1965.22. New Zealand's NZX50 rose 0.1% to 5429.62. Singapore's Straits Times index slipped 1.34% at 3305.64. Malaysia's KLCI declined 2.34% to 1778.27. Indonesia's Jakarta Composite index added 0.28% to 5164.29.

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