Asia Pacific Market: Stocks fall on weak offshore cues, downbeat China trade data

Asia Pacific share market declined on Tuesday, 08 December 2015, with investor sentiment stifled by declines in U.S. equities overnight amid drop in crude oil prices by more than 5%. Downbeat Chinese trade data has also lulled market sentiments.

The US market ended in the red on Monday as oil prices dipped to their lowest point in nearly seven years. The Dow Jones Industrial Average was down 117 points or 0.66% to 17,730.5. The S&P 500 lost 14.6 points or 0.7% at 2,077 while the Nasdaq ended 40.5 points or 0.8% lower at 5,101.8.

Crude oil prices suffered a sharp decline during U.S. trading as a result of a global supply glut. The Organization of the Petroleum Exporting Countries' (OPEC) failed to reach an agreement to reduce production levels when it met on Friday. In Asian trade, U.S. West Texas Intermediate (WTI) crude futures traded 14 cents or 0.37% higher at $37.79. Brent crude futures were also up marginally by 28 cents or 0.69% at $41.01, after hitting the lowest level since February, 2009 overnight.

The latest data from the General Administration of Customs showed that China's trade performance remained weak in November, with exports falling by a more-than-expected 6.8% from a year earlier, a fifth straight month of decline. Imports fell 8.7%, registering a 13th consecutive monthly drop. That left the country with a trade surplus of $54.10 billion for the month, down from October's record high of $61.64 billion.

Market participants are now keeping eyes on the U.S. Federal Reserve policy-setting meeting next week. The upbeat US job data doused the jitters over a possible US interest rate hike in December for the first time in almost a decade in December.

Fed Chair Janet Yellen gave an upbeat evaluation of the United States financial system final week, signaling that she is able to increase rates of interest later this month, stopping a shock in markets or the financial system.

Atlanta Fed leader Dennis Lockhart expressed strong support for hiking short-term rates off near-zero levels on Monday. Meanwhile, St. Louis Fed President James Bullard said that Fed forecasts, which kept the central bank from raising rates earlier, have been wrong over the last 18 months. Bullard's talk is expected to be the last speech by a Fed official before the central bank goes into a communication blackout ahead of its Dec. 15-16 meeting.

Among Asian bourses

Australia stocks falls 0.9%

The Australian share market finished the session down, as profit booking has begun on following a drop in the Wall Street overnight and as weaker than expected China's November trade data. Most of the ASX industry category declined, with shares of energy and raw-materials producers issues were among major decliners in the market. At the close, the benchmark S&P/ASX 200 index ended 47.10 points, or 0.91%, down at 5108.60 points.

Shares of materials and resources companies continued downward journey today, due to drop in iron ore to a new 10-year low beneath. Global miner BHP Billiton tanked 5.2% to A$17.05, its lowest level on a closing basis since July 2005. Rio Tinto sank 4.3% to A$42.40 and Fortescue Mining dropped 3% to A$1.805. Mining services firm Orica was off 2.6% to A$15.18 after it announced a $36m hit to its bottom line.

Shares of Oil producers continued falling streak, amid declines in the global oil price. Brent crude prices had fallen to the lowest level in nearly seven years after OPEC's meeting ended last week in disagreement over production cuts. Oil and gas producer Woodside Petroleum dropped 4% to A$26.89 and Origin Energy 2.7% to A$4.98. Santos shares tanked 13.1% to A$3.31. Oil Search surrendered 16.4% to A$6.29, after reports that Woodside Petroleum officially withdrew it's A$11.64 billion takeover bid to consolidate market position.

Shares of banks and financials were also down. Australia & New Zealand Banking Group dropped 1.7% to A$26.82, Commonwealth Bank of Australia 0.5% to A$80.14, Westpac Banking Corp 0.9% to A$32.24, and National Australia Bank 0.9% to A$29.31. Insurance Australia Group was off 1.4% to A$5.65 after it announced a business restructure and more leadership changes.

Nikkei falls 1%

The Japanese share market ended down, as risk aversion selloff flared on tracking declines of US markets overnight amid plunging oil prices. However, losses were limited on the back of stronger-than-expected revised July-September gross domestic product data. Total 31 out of 33 TSE industry groups declined, with the day's notable losers comprised Mining, Oil & Coal Products, Iron & Steel, Machinery, and Nonferrous Metals issues. The 225-issue Nikkei Stock Average declined 1.04%, or 205.55 points, to 19492.60. The wider Topix index of all first-section shares slipped 1.04%, or 16.48 points, to 1568.73.

Revised GDP for the July-September quarter 2015 released by the Cabinet Office on Tuesday, showing Japan's economy registered an above-potential growth of an annualized +1% (+0.3% on quarter) in the third quarter, reversing last month's initial reading of a second straight quarterly drop of an annual -0.8% (-0.2% on quarter) as business investment turned out to be much stronger than estimated when demand side information was added. The revised GDP data showed the economy averted a technical recession after marking a slight decline of an upwardly revised -0.1% on quarter (-0.2% previously), or an annualized -0.5% (-0.7%), in April-June.

BoJ Governor Haruhiko Kuroda has pointed out that the Japanese quantitative easing program was exerting desirable effects on the Japanese economy in terms of attaining the 2% inflation target.

Shares of oil explorers and other commodity-related companies met with selling due to a plunge in crude oil prices in the wake of the Organization of the Petroleum Exporting Countries' de facto approval of the current high oil output levels. Oil refiner JX Holdings Inc. lost 3.8%, while JGC Corp., which provides services to energy firms, slumped 5.8%. Sumitomo Metal Mining Co. dropped 2.6%.

Shares of Airlines, which stand to benefit from cheaper fuel costs, were one of the few standouts, with ANA Holdings Inc. climbing 2.3%.

Asahi Kasei Corp. lost 2.6% after the subcontractor at the center of a building scandal said home orders dropped 16% in November from a year earlier.

China market sinks 1.89%

The Mainland China stock market declined, as investor sentiment stifled by downbeat domestic trade data. Every industry category on the main section lost ground, with decliners led by energy and material producers after oil plunged to the lowest level in more than six years. The Shanghai Composite Index has surrendered 1.89%, or 66.86 points, up at 3470.07 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, declined 1.78%, or 40.14 points, to close at 2221.27. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, sank 1.7%, or 46.49 points, to close at 2691.66.

In Chinese currency terms, the value of China's exports dropped 3.7% in November, while imports slid 5.6%, thus, the trade surplus narrowed to 343.1 billion yuan in November from the previous month's 393.2 billion yuan.

Shares of energy and material producers suffered the steepest declines among 10 industry groups. PetroChina Co. lost 2%, while Yanzhou Coal Mining Co. declined 1.7%. Yunnan Copper Co. plunged 3.6%.

The PBOC said on Monday foreign-exchange reserves fell by $87.22 to $3.44 trillion billion in November, the lowest level since February 2013 and the third largest monthly drop on record.

Hong Kong stocks down in afternoon trade

The Hong Kong stock market was trading weaker in the afternoon trade, echoing slump in the US counterparts overnight and as China trade data signaled a deepening slowdown in the world second largest economy. Shares of energy and material producers were the worst- performing industry groups after oil plunged to the lowest level in more than six years and Chinese imports extended a slump to a record 13 months. The benchmark index opened down 144 points at 22,058, which marked the intra-day high. It then moved lower and fell as much as 430 points to 21,773. By midday, the Hang Seng Index ended down 374 points or 1.7% to 21,829.

US insurance giant AIG cut its stake in PICC P&C (02328), which plunged 7% to HK$15.94. Ping An (02318), NCI (01336) and CPIC (02601) all fell, with losses ranging from 2% to 4%.

Oil prices hit 7-year low as the OPEC has not taken actions to stop the oversupply woes. China Oilfield (02883) slid 4% to HK$7.13. CNOOC (00883) declined 4% to HK$8.24. PetroChina (00857) dropped 3% to HK$5.26. But aviation counters rose across the board as they benefit from lower fuel costs. China Eastern Airlines (00670), Air China (00753), and China Southern Airlines (01055) all rose 1% to HK$4.25, HK$6.29 and HK$5.71 respectively.

Sensex extends losses

Indian stock market continued to trade down in the afternoon trade today, with sentiment took a hit on sustained foreign fund outflows and a weak trend in other Asian markets as crude falls to 7-year low on international markets. By 12:50 IST, Sensex slipped 136 points to 25,393 and Nifty fell 34 points to 7,731.

Shares of Tata Motors rose after its luxury vehicle unit Jaguar Land Rover (JLR) posted a 27% growth in November sales.

3i Infotech surged after the company said that its board approved the proposal for debt realignment scheme for its creditors and restructuring of the foreign currency convertible bonds (FCCBs).

Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 1.3% to 8343.86. South Korea's KOPSI slipped 0.75% to 1949. Malaysia's KLCI slipped 0.1% to 1669.84. Singapore's Straits Times index lost 0.9% at 2875. Indonesia's Jakarta Composite index shed 0.7% to 4489.26. New Zealand's NZX50 fell 0.5% to 6035.

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