Regional stocks commenced trade with firm footing on following record high close of Wall Street overnight. But early gains vapoured on caution before meeting of the Federal Reserve, which is expected to announce a drawdown of its massive bond holdings.
On Monday, the S&P 500 equity index edged up 0.2% to a second successive record close of 2,503, having earlier touched an all-time intraday peak of 2,508.32. The Nasdaq Composite also closed at a record high, while the pan-European Stoxx 600 rose 0.3% to its best finish in more than a month.
The Fed is due to begin a two-day monetary policy meeting today and markets will be watching to see how chairwoman Janet Yellen describes recent trends in inflation for the world's largest economy, hoping for clues about the timing of the next interest rate rise. At a two-day meeting beginning later on Tuesday, the Fed is expected to take another step toward policy normalization and announce plans to begin unwinding its $4.2 trillion portfolio of Treasuries and mortgage-backed securities.
Among Asian bourses
Australia Market ends softer
Australian equity market finished session marginally down after erasing intraday gain late afternoon, with real estate stocks and top lenders being major loser losses after the Reserve Bank of Australia's September meeting minutes highlighting worried about rising household debt and a strong local dollar. Growth in housing debt has outpaced incomes, a result that threatens economy-wide spending. The local market had made a promising start, gaining as much as 22 points before slipping into the red at lunch and unable to claw back in the afternoon's trade.
Real Estate and financial stocks were amongst the worst hit on the local market with the likes of Westfield (WFD) down 2%, Mirvac Group (MGR) losing 1.8% and Goodman Group (GMG) shedding 2.15%, the main drags. Among financial stocks, Commonwealth Bank of Australia retreated from a three-week high to close 0.5% lower, while Australia and New Zealand Banking Group stayed afloat, ending up 0.1%.
Telecommunications were the best performing sector thanks to a strong showing by TPG Telecom (TPM), which finished 5% higher on its FY17 full year result. This was despite cutting its dividend and announcing margin pressures as the national broadband network (NBN) continues being rolled out. TPM still managed to record revenue of A$2.5 billion and A$890 million in earnings before interest, tax, depreciation and amortisation (EBITDA) over the past financial year.
New Hope (NHC) shares rose after announcing a net profit of A$140.6 million and a 59% jump in revenue to A$844.1 million. NHC's bottom line benefited from strong Asian demand as well as improved coal prices over the year.
Nikkei rises to 20,000-point threshold
The Japan share market closed at the highest closing level in over two years, bolstered by record highs on Wall Street overnight ahead of a Federal Reserve meeting, dollar's strength against the yen, and the prospect of a snap election in Japan. Most of TSE sectors inclined, with insurance, marine transportation and bank-related issues comprised those that gained the most by the close of play. The Nikkei 225 index rose 1.96%, or 389.88 points, to end at 20,299.38, its highest since August 2015. The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 28.94 points, or 1.77%, to finish at 1,667.88. The Tokyo market was closed Monday for Respect for the Ages Day.
Exporters were higher after dollar briefly advanced to a two-month high above Y111.80 in Tokyo trading. Japanese carmakers were lifted by the weaker yen, with Toyota rising almost 4% and Nissan up 2.12%. Nintendo jumped more than 7% on strong sales prospects for its Switch games console.
Mega-bank group Mitsubishi UFJ, insurers Dai-ichi Life and Tokio Marine and brokerage firm Nomura were also upbeat after their U.S. peers gained ground in New York trading on Monday. Other major winners included game maker Nintendo and mobile phone carrier SoftBank Group.
By contrast, Nitori Holdings plunged 4.17% on news that the interior goods retailer is likely to post a lower than expected operating profit for March-August.
China Stocks fall on liquidity woes
The Mainland China equity market closed down, as caution prevailed over potentially tight liquidity before the National Day holiday. Most sectors lost ground, led by healthcare, material, automobile, electronic components, and infrastructure firms, but real estate companies continued to outperform with a 1.7% gain, tracking the strength in Hong Kong for domestic developers. The blue-chip CSI300 index fell 0.3%, to 3,832.12 points, while the Shanghai Composite Index shed 0.2% to 3,356.84 points. The Shenzhen Composite declined 0.4% at 1,995.60 and the Nasdaq-style ChiNext slipped 0.8% to 1,880.30.
Investor risk appetite was curbed by a mixed bag of recent China economic data showing signs of a slowdown in some areas of the economy, such as fixed-asset investment, but resilience elsewhere, such as stronger-than-expected lending.
There are emerging concerns over seasonal liquidly stress toward the end of the third quarter, due to the week-long National Day holiday and central bank health checks on commercial banks. China's stock market, dominated by retail investors, usually succumbs to outflows ahead of long holidays as investors pull money out for consumption.
Market sentiment was also weak as Xu Yilin, deputy general manager of Shanghai Stock Exchange, said yesterday that Shanghai Stock Exchange will continuously strengthen the supervision of listed companies and curb abnormal trading.
The China Insurance Regulatory Commission said that it will conduct inspections to rectify market irregularities and urge insurers to correct problems.
Hubei Sanxia New Building Materials Co fell 8.9% to 10.49 yuan, Shanghai Tongji Science & Technology Industrial Co lost 4.92% to 14.69 yuan and Zhejiang Zomax Transmission Co declined 3.83% to finish at 21.10 yuan.
Hong Kong Stocks retreat on profit booking before the Fed meeting
The Hong Kong stock market declined from its highest level in 27 months today, as investors elected to cash recent profit, with property developers among the notable decliners amid concern about valuations and caution ahead of the U.S. Federal Reserve's policy meeting this week. The Hang Seng Index closed down 0.4%, or 108.36 points, at 28,051.41. The Hang Seng China Enterprises Index eased 0.6% or 70.27 points to 11,125.71. Turnover decreased to HK$99.6 billion from HK$112 billion on Monday.
Shares of Chinese brokerages pulled back from yesterday's advances which were triggered by mainland regulators's decision to relax restrictions on index futures trading. Meanwhile Goldman Sachs said in a research report that brokers' near-term profit growth will benefit if a proposed policy to halt a commission war in China were to be implemented. Citic Securities eased 2.7% to HK$17.8 after surging 8.5% on Monday. Haitong Securities fell 2.1% to HK$12.96 after Monday's 4.3% gain. Ping An slipped 0.9% to HK$62.3 and AIA fell 0.9% to HK$59.8, taking 21 points from the Hang Seng Index.
Some mainland developers saw profit-taking pressure. China Overseas Land and Development was the biggest blue-chip underperformer, dropping 2.6% to HK$28.45. Wharf Holdings declined 1.3% to HK$71 and Cheung Kong Property fell 1% to HK$67.1. But Citigroup lifted target prices for Chinese developers amid the sector's traditional peak season in September and October. Sunac continued to rise for a seventh straight day, surging 9.1% to a record HK$37.6. Hopson Development Holdings surged 21% to HK$9.64.
Local property counters were lower. Cheung Kong Property (01113) fell 1% to HK$67.1. Sino Land (00083) slipped 1% to HK$13.82.
Geely Auto, however, rose 1.6% to hit a fresh record high of HK$22.70 and was the second best performer among index components. The Chinese car maker said it expected alternative energy cars to account for 90% of total sales by 2020.
India Market snaps recent gains amid mixed global cues
Key benchmark indices closed the lackluster trading session near the flat line. The barometer index, the S&P BSE Sensex, fell 21.39 points or 0.07% to settle at 32,402.37. The Nifty 50 index fell 5.55 points or 0.05% to settle at 10,147.55.
Gas utility stocks advanced on reports a global research firm has reportedly turned more bullish on gas utilities as it sees a multi-year growth cycle ahead. Tata Motors jumped amid huge volumes on reports that Tata Sons, the promoter of Tata Group is planning to increase its stake in the company.
Gas utility stocks advanced on reports a global research firm has reportedly turned more bullish on gas utilities as it sees a multi-year growth cycle ahead. GAIL (India) (up 4.87%), Indraprastha Gas (up 3.07%), Gujarat Gas (up 1.57%), Gujarat State Petronet (up 3.17%) and Petronet LNG (up 1.24%) edged higher. The growth path was supported by benign gas prices and favourable government policies. It expects the completion of the national gas grid and favourable government policies to support rapid earnings growth even beyond this decade.
Auto major Tata Motors jumped 4.58% at Rs 423.90 amid huge volumes on reports that Tata Sons, the promoter of Tata Group is planning to increase its stake in the company. Tata Sons' shareholders are scheduled to vote on 21 September 2017 to change its legal status to a private company rather than a public company which will restrict the Mistry family's ability to sell its stake to external investors. The Mistry family is planning to vote against the move. Tata Sons held 31.6% stake in Tata Motors as on 30 June 2017.
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