Asia Pacific Market: Stocks rise on positive political and economic news from the US

Asia Pacific shares closed mostly higher on Friday, 22 November 2013, as positive political and economic news from the US supported sentiment, putting aside worries the Federal Reserve will cut its monetary stimulus soon. The MSCI Asia Pacific Index added 0.3 percent to 141.44

The overall sentiment was increasingly risk-on with dovish Federal Reserve chief candidate Janet Yellen moved one step closer to the top job at the Federal Reserve. The Senate Banking Committee voted to approve Ms. Yellen's nomination to become Fed chairwoman next year a move considered positive for the market, as she isn't expected to move aggressively to unwind central bank's easy-monetary policy, a process refearred to as tapering.

A strong U.S. jobs report also helped sentiment. US jobless claims in the week ended Nov. 16 dropped by 21,000 to 323,000, the fewest since the week ended Sept. 28, from a revised 344,000 the previous week, the Labor Department said on Thursday in Washington. The prior week's level was revised up to 34 4,000 from the initially reported 339,000. The four-week moving average of claims, which evens out volatility in the weekly data, dropped to 338,500.

Meanwhile high expectations for the start of U.S. Christmas sales, noting the approach of Black Friday--the official start of the Christmas gift-buying season in North America--on Nov. 28 also aided risk sentiments.

Market gains were however, limited as better than expected US jobless claims figures coupled with hawkish minutes of US Federal Reserve policymakers' last policy meeting reinforcing sign over beginning tapering of economic stimulus in coming months.

The Federal Open Market Committee left the $85 billion a month asset purchase program unchanged at its October meeting, but felt recovery in the labour market would allow them to begin tapering soon, minutes of the meeting reveal.

Among Asian bourses, shares on the Australian financial market advanced for the first time in five sessions in row, sending the benchmark S&P/ASX 200 index higher by 0.9% to finish at 5335.90. For the week, the ASX200 fell 65.77 points, or 1.2%. Investors chased for bargain buying across the board with industrials, realty, energy, lenders and resources players were leading rally.

Australian materials and resources went higher, with BHP Billiton gaining 0.7% at A$37.83 after the world's biggest mining company, yesterday said it was confident about China's announced reforms as the nation transitions to a consumption-led economy from export and capital-led growth. Meanwhile, Rio Tinto, second biggest miner, gained 0.1% to A$65.28 after saying proposed economic reforms unveiled this month by China had many positive signals, underpinning continued demand for raw materials. Fortescue Metals rose 0.5% to A$5.78.

Australian dollar declined from yesterday level against greenback and other major currencies on Friday after comments from the central bank governor tipped possible market intervention to drive the currency lower.

On Thursday evening, Reserve Bank of Australia governor Glenn Stevens repeated his belief the dollar is overvalued, adding he remains open minded about intervening in the currency market. At Friday's local close the dollar was buying US91.77, down from US93.44 at the previous week's close.

In Japan, Japanese share market finished slight higher after paring early gains late afternoon, as investors pocketed some gains from the table on renewed overheating fears following sharp gains in last two weeks. The benchmark Nikei225 index added 16.12 points to 15381.71, while broader Topix index rose 2.26 points to 1248.57. For the week, the Nikei225 index booked a net rise of 1.4%, giving it a two-week advance of 9.2%. Year-to-date, the Nikkei is now up almost 48%.

Bank of Japan (BOJ) Governor Haruhiko Kuroda said in parliament today, 22 November 2013, that the yen isn't excessively weak. Inflation will hit the BOJ's 2% target in the latter half of the central bank's two-year time frame and policy makers will adjust its bond-buying program as needed, he said. The central bank yesterday maintained its unprecedented monetary policy.

Export related stocks mostly higher in Tokyo after the dollar about 1 full yen to 101.26 overnight. Strong improvements for blue-chip exporters included a 4.2% rise for Nintendo Co to 13540 yen, a 2.6% improvement for TDK Corp to 4535 yen, a 1.1% climb for Mazda Motor Corp to 456 yen, and a 1.3% gain for Honda Motor Co to 4295 yen after its 2014 Accord won the Green Car of the Year honors at the L.A. Auto Show. On the downside, Sony Corp fell 1% to 1875 yen after its chief executive confirmed plans for major cost cuts, while Komatsu shed 0.2% to 2152 yen following a ratings downgrade by Credit Suisse to neutral from outperform.

Sharp Corp advanced 8.4% to 322 yen on reports that it is set to begin production of small- and mid-size LCD panels at a domestic factory to supply China's ZTE Corp.

SoftBank Corp rose 2.3% to 8150 yen after U.S. hedge fund Third Point's Chief Executive Daniel Loeb said Thursday his firm has taken a $1 billion position in the firm's surging stock.

In China, Chinese stock market declined, weighing the Shanghai Composite down by 9.39 points to 2196.38 while the CSI 300 Index shed 0.5% to 2397.96. Almost all sectors eased with shares in tech, telecom, pharma, retailer, industrial and energy players declined the most.

Selloff pressure dominated the overall market due to weaker than expected reading on the health of China's manufacturing sector. The Flash Markit/HSBC Purchasing Managers' Index (PMI), the earliest indicator of how the Chinese economy is faring each month, fell to 50.4 from October's final reading of 50.9. But it remained above the 50 line, which demarcates expansion from contraction for the fourth consecutive month.

The decline in flash reading came as new export orders shrank, a preliminary survey showed Thursday, bolstering expectations the economy could lose some of its vigor in the fourth quarter as the government shifts its focus to structural reform.

A sub-index in the PMI measuring new export orders fell to a three-month low of 49.4 in November from 51.3 in October, reflecting lethargic external demand due to patchy recoveries in developed countries. Overall new orders also edged down slightly, which could suggest that a revival in domestic demand is not yet strong enough to offset faltering external orders. Among the 11 sub-indices in the survey, nine pointed to either slower growth or a contraction, including jobs.

In Hong Kong, shares in the Hong Kong financial market finished modest higher in narrow and quiet trade, boosted by tracking overnight rally on the Wall Street. Hong Kong's benchmark Hang Seng Index advanced 115.99 points to finish at 23696.28, while the Hang Seng China Enterprises Index advanced 115.60 points to 11448.74.

Among the HK 50 blue chips, 32 stocks rose and 16 fell, with two stocks remaining steady. Ping An Insurance gained 3% to HK$73.15 after the China insurance regulator announced October premium growth of 12%, while Belle International Holdings fell 1% to HK$9.41, making themselves the biggest blue-chip winner and loser.

Chinese coal producers listed in Hong Kong shares were up, with China Shenhua rising 1.9% to HK$26.65 as the company expects November coal sales to hit new single-month record in the year. China Coal gained 1% to HK$5.14. Yanzhou Coal (01171) rose 3.2% to HK$8.63.

Glorious Property soared 33% to HK$1.65 after its major holder proposed to take the company private at a 45% premium.

Civil Aviation Department today approved the passenger fuel surcharges for December. The maximum levels of fuel surcharges for December will be maintained at HK$229 for short-haul flights and HK$935 for long-haul flights.

In India, Immense volatility was witnessed during the last one hour of trade as key benchmark indices regained positive zone after reversing intraday gains. The 50-unit CNX Nifty regained the psychological 6,000 mark after falling below that level in late trade. The barometer index, the S&P BSE Sensex, was provisionally up 37.61 points or 0.19%, up 128.99 points from the day's low and off 121.46 points from the day's high.

Indian index heavyweight Reliance Industries settled marginally lower after seeing high volatility. Index heavyweight and cigarette major ITC dropped in choppy trade. ONGC surged after the company's wholly owned subsidiary ONGC Videsh (OVL) after market hours on Thursday, 21 November 2013, announced that it has on 20 November 2013 signed Memorandum of Understanding (MOU) with Petrovietnam to promote the joint cooperation in hydrocarbon sector in Vietnam, India and other countries. Bajaj Auto extended intraday losses in late trade.

In the foreign exchange market, the Indian rupee edged lower against the dollar in choppy trade. The partially convertible rupee was hovering at 62.97, compared with its close of 62.93/94 on Thursday, 21 November 2013. The rupee had weakened past 63 against the dollar earlier during the day.

Elsewhere in the region, Indonesia's Jakarta Composite index shed 0.19%. South Korea's KOSPI rose 0.62%. Taiwan's Taiex index added 0.21%. Malaysia's KLSE Composite shed 0.01%. Singapore's Straits Times index rose 0.01%.

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