Asia Pacific Market: Stocks rebound on bargain buying

Asia Pacific share market, excluding Japan and China, rebounded on Tuesday, 25 August 2015, as some major blue chip companies which were hammered yesterday surged today, as bargain hunters moved in to pick up what they see as cheap stocks.

Late evening today, the China's central bank reduced its key interest rate in a bid to boost growth in the world's second-largest economy. China's central bank People's Bank of China (PBOC) today, 25 August 2015, lowered its one-year lending rate by 25 basis points (bps) to 4.6% effective 26 August 2015. It also cut deposit rate by 25 bps to 1.75% effective from Wednesday, 26 August 2015 and cut banks' reserve requirement ratio by 50 bps effective 6 September 2015. The PBOC also removed its control over fixed bank deposits with more than one-year maturity.

Among Asian bourses

Australia market rebounds from 2-years low /B>

The Australian share market rebounded from two-year low, as investors chased for bottom fishing on battered blue chip stocks after a catastrophic day of trading yesterday which saw almost $60 billion wiped off the value of Australian companies. All ASX sectors closed higher, with banks & financials, materials, and industrials stocks were the biggest gainers. The benchmark S&P/ASX 200 index reached a nadir of 4928.3 shortly after opening but then performed, at its peak, an impressive 223-point turnaround - equivalent to a 4.5 per cent intraday rally. The index ended the day up 136 points at 5137.3, a day after suffering the worst day of trading since the global financial crisis. The broader All Ordinaries index closed 130 points, or 2.6 per cent, higher at 5143.8.

Shares of financial companies were top gainers, with top four lenders leading rally. Westpac Bank led gains among major banks, rising 4.9% to A$30.90, meanwhile National Australia Bank rose 4.6% to A$31.09, Australia & New Zealand Banking Group added 4% to A$27.99, and Commonwealth Bank jumped 3.6% to A$75.08.

Shares of material companies rebounded sharply on bargain buying, with BHP Billiton gaining 2% to A$23.34 and Rio Tinto adding 3.2% to A$48.45. Iron ore miner Fortescue surged 11% to A$1.815, reclaiming some of the ground lost Monday after the release of their full-year numbers. Oil and gas producer Woodside Petroleum added 0.7% to A$30.2. Oil Search advanced 1.6% to A$5.90 after reporting a jump in its half-year profit as a surge in production offset weaker prices.

Nikkei hits a nadir since mid-February

Japanese share market finished the volatile trading session sharply lower, as fears about China's economy continued to spook investors. Tuesday's see-saw trading followed a brutal Monday session in which the Nikkei225 index posted the biggest daily drop in more than two years. Almost all TSE industry groups declined, with shares of steel & nonferrous metals, commercial & wholesale trade, transportation & logistics, automobiles & transportation equipment, and utilities companies being hardest hit. The Nikkei Stock Average tumbled 733.98 points, or 3.96%, to end at 17806.70 points, its sixth straight losing session and the lowest level since Feb. 10, after briefly clawing back into positive territory by the midday break. Tuesday's drop followed a 4.6% fall on Monday. The Nikkei has lost 13 per cent in the past six sessions. The broader Topix index of all first-section shares also zig-zagged between positive and negative territory, ending down 3.26 per cent or 48.22 points at 1,432.65.

Finance minister Taro Aso said there were no immediate plans for a fiscal stimulus package to counter any downturn at home, and added that Tokyo was in close contact with other G7 nations over the market swings.

Shares of trading firms, shippers and warehouse were among the biggest declines in the Tokyo on tracking drops in crude-oil and other commodity prices. the Bloomberg Commodity Index of 22 raw materials on Monday closed at the lowest level since 1999. Mitsubishi Corp. dropped 5.8%, while Sumitomo Corp. lost 5.4%. Shipper NS United Kaiun Kaisha dropped 8.6% and Nippon Yusen KK slid 4.5%, while warehouse operator Mitsubishi Logistics Corp. sank 6.1%. Oil services provider JGC Corp. dropped 4.2%. Nippon Steel & Sumitomo Metal Corp. lost 5.2%.

China market crashes another 7.6%

Mainland China's stock market tumbled again on Tuesday, 25 August 2015, as concerns about China's weak economy pressured risk aversion selloff across the board. Many companies, including some large state-owned firms, fell by the maximum daily limit of 10%. The benchmark Shanghai Composite Index closed down 7.6% to 2964.97, below the 3000 level for the first time since December 2014, on turnover of 358.7 billion yuan. The steep losses follow a drop of 8.5% on Monday, the worst single-day loss in more than eight years. China's stock-market crash has wiped out more than $1 trillion in value from equities and sent its main stock index down 22% over the past four days. The index is down 8.3% for the year and has fallen 43% since its June peak. The Shenzhen Composite Index, which tracks stocks on China's second exchange, slumped 7.09%, or 133.39 points, to 1,749.07 on turnover of 288.0 billion yuan. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, fell 7.52% to close at 1,990.71.

After markets closed Tuesday, Beijing launched new stimulus measures to boost the country's flagging economy. The People's Bank of China cut interest rates by a quarter of a percentage point and the amount of reserves banks are required to hold by half a percentage point. It was the second time since late June that China had taken the rare easing step of cutting both interest rates and the reserve-requirement ratio on the same day. The last time was during the height of the global financial crisis.

The People's Bank of China auctioned 150 billion yuan ($23.4 billion) of seven-day reverse-repurchase agreements. That compares with 120 billion yuan maturing Tuesday, which leaves a net injection of 30 billion yuan.

Hong Kong market rebounds

Hong Kong stock market closed higher in volatile trading, as 'bargain hunters' snap up the battered stocks. Some major blue chip companies which were hammered yesterday surged today, as 'bargain hunters' moved in to pick up what they see as cheap stocks. The Hang Seng Index (HSI) opened down 132 points but closed higher for the morning session, benefiting from the deal reached by the Korean peninsula and the rally of Asian markets. In afternoon trade, it was dragged down by the Shanghai market before recovering all of its losses by market close. The Hang Seng Index ended higher by 153.39 points, or 0.72%, at 21404.96 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, sank 88.25 points, or 0.92%, to 9514.04 points. Turnover reduced slightly to HK$134.5 billion from HK$139 billion on Monday.

Chinese banks were dragged down by tracking selloff in the mainland equity markets. CCB (00939) slipped 1% to HK$5.46. ABC (01288) edged down 0.96% to HK$3.11. BankComm (03328) fell 1.2% to HK$5.88. BOC (03988) dipped 2.4% to HK$3.61.

CK Property (01113) and CHK Holdings (00001) gained 2.7% and 3.8% to HK$52.2 and 102.3. Both companies will report their earnings after market close.

AIA (01299) shot up 5% to HK$42.85 on Credit Suisse's recommendation. It was the best performing blue chip.

ANZ-Roy Morgan Hong Kong Consumer Confidence rose to 138.2 (up 0.6pt) in August (the highest level ever recorded). The rise of the index in August was driven by the record high confidence in personal finances compared with a year ago and expectations for the next 12 months.

Indian indices snap 3-day losing streak

A rebound in global stocks aided recovery on the domestic bourses after the carnage witnessed yesterday, 24 August 2015. The barometer index, the S&P BSE Sensex, garnered 290.82 points or 1.13% to settle at 26,032.38. The gains for the Sensex in percentage terms were higher than those for the 50-unit CNX Nifty. The Nifty rose 71.70 points or 0.92% to settle at 7,880.70.

Oil, metal and banking stocks led recovery for key benchmark indices. Shares of oil exploration & production (E&P) firms edged higher as global crude oil prices rose. Shares of most pharmaceutical firms edged higher. Auto stocks edged higher on renewed buying. Most IT stocks declined.

Meanwhile, Parliamentary Affairs Minister Venkaiah Naidu reportedly said today, 25 August 2015, that the government is considering reconvening Parliament to get the Parliament's nod for the Goods and Service Tax bill.

There was massive selling of Indian stocks by foreign portfolio investors (FPIs) yesterday, 24 August 2015, when carnage was witnessed on the domestic bourses as part of a global rout in equities sparked by worries that China's economy is slowing down more than anticipated. FPIs sold shares worth a net Rs 5163.47 crore into secondary equity market yesterday, 24 August 2015, as per data from National Securities Depository (NSDL). Domestic institutional investors (DIIs) bought shares worth a net Rs 4097.83 crore yesterday, 24 August 2015, as per provisional data released by the stock exchanges.

Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 3.6% to 7675.64. South Korea's KOPSI added 0.9% to 1846.63. New Zealand's NZX50 jumped 0.1% to 5613.29. Singapore's Straits Times index gained 1.5% at 2886.29. Indonesia's Jakarta Composite index grew 1.6% to 4228.50. Malaysia's KLCI added 2.1% to 1563.94.

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