Asia Pacific Market: Stocks shine on China stimulus

Headline shares of the Asia Pacific market mostly advanced on Wednesday, 17 September 2014, following the strong show in the Wall Street overnight and on report that the Chinese central bank is boosting its stimulus program. The MSCI Asia Pacific Index advanced 0.2% to 144.54.

The US markets rebounded on Tuesday on speculation the Federal Reserve would maintain a pledge on low rates when a two-day policy meeting ends later in the session. The Wall Street Journal's Fed watcher Jon Hilsenrath said the central bank would keep the words considerable time in its policy statement, though it might qualify them. The phrase has become a touchstone in markets for when the Fed might start raising interest rates and dropping it would be taken as a hawkish step.

The buying pressure was also boosted by a report that China's central bank was pumping more liquidity into the country's five largest banks. The People's Bank of China will pump 100 billion yuan into each of the five biggest banks for a three-month period, according to articles in a number of Chinese and Western media outlets. There was no official confirmation on the story. Still, it fuelled market hopes Beijing was ready to add more stimulus given recent weakness in housing, imports and industrial output.

However, gains across the regional bourses were limited as global investors were idling ahead of a speech from US Federal Reserve chair Janet Yellen scheduled overnight on Wednesday hoping for guidance on future interest rate policy. Fed officials are considering how much progress toward their goals of full employment and stable inflation would be needed to prompt the first interest-rate increase since 2006. They will outline their outlook for the economy in quarterly projections for growth, unemployment, inflation and the benchmark federal funds rate.

Among Asian bourses

Aussie shares fall to six-week low

Australian share market ended lower for the sixth consecutive session amid caution ahead of a highly anticipated announcement at the conclusion of the September United States Federal Reserve Open Market Committee policy meeting later in the global day. Most of the ASX200 sectors declined, with banks and other high-yield equities tumbled the most on caution before the US Federal Reserve monetary policy announcement later in global day, whilst news of monetary stimulus in China fuelled gains in the material sector. The benchmark S&P/ASX 200 Index declined by 38.10 points, or 0.7%, to 5407.3 and the broader All Ordinaries Index lost by 34.80 points, or 0.64%, to 5411.40. Turnover was relatively stronger with 2.15 billion shares worth of A$5.33 billion traded today.

The financial stocks ended lower, with top four big banks leading losses on caution ahead of a speech from US Federal Reserve chair Janet Yellen scheduled later today. Commonwealth Bank of Australia lost 1.1% to A$77.35, Westpac Banking Corp fell 1.8% to A$32.90, ANZ Banking Group shed 2.2% to A$31.43 and National Australia Bank fell 1.4% to A$33.18.

Materials and resources stocks closed higher, following reports that the Chinese central bank is boosting its stimulus program. The media reports stated that the People's Bank of China is providing 500 billion yuan in liquidity to China's five largest banks. Resources giant BHP Billiton advanced 0.3% to A$35.84, while main rival Rio Tinto was up 0.4% to A$62.05. Fortescue Metals Group added 0.5% to A$4.02.

Shares in Whitehaven, the largest locally listed pure-play coal company, dropped 2.5% to A$1.78 after announcement out of China on Tuesday to ban imports of dirty coal.

Nikkei falls 0.14% on caution ahead of Fed

Japanese share market finished lower for second consecutive session, as investors were cashing out recent profit on caution ahead of an important U.S. monetary policy meeting outcome later in the global day. The Nikkei 225 index ended down 0.14%, or 22.86 points, at 15888.67, while the Topix index of all first-section shares fell 0.45%, or 5.90 points, to 1304.96.

Financial shares that tend to benefit from low-interest rate policy retreated. Mitsui Fudosan lost 2.2% to 3,288.5 yen. Mitsubishi UFJ Financial Group Inc., Japan's No. 1 lender, lost 0.8% to 609.7 yen. Mizuho Financial Group Inc. sank 1.2% to 199 yen.

Share of Japanese property developers fell due to concerns over sharp falls in residential development projects following a rise in the sales tax on April 1. Mitsui Fudosan Co fell 2.2% to 3288.5 yen, Mitsubishi Estate Co dropped 1.6% to 2337.5 yen, and Sumitomo Realty & Development Co declined 1.1% to 3905 yen.

Shippers retreated in Japan after the Baltic Dry Index slumped 2% yesterday, the most since July. Nippon Yusen K.K., the biggest, declined 1.6% to 300 yen. Mitsui OSK dropped 3.5% to 359 yen. Kawasaki Kisen Kaisha Ltd. lost 3.2% to 246 yen.

Shanghai Composite bounces 0.49%

Mainland China share market closed higher in volatile trade, after reports the central bank has injected cash into the country's biggest lenders, in a move to bolster the economy and calm fears that growth is slowing more than expected. The benchmark Shanghai Composite rose 11.34 points, or 0.49%, to finish at 2307.89.

The Commerce Ministry said on Tuesday that China attracted US$7.2 billion in foreign direct investment (FDI) in August, down 14% from a year earlier and at a level not seen since February 2012. That left China with US$78.3 billion of FDI in the first eight months of 2014, down 1.8% from a year earlier.

Electricity consumption, a broad measure of economic vitality, was down 1.5% year on year to 502 billion kilowatt-hours last month, the first decline this year, according to data from the National Energy Administration. That was in contrast to rises of 3% in July and 5.9% in June. The contraction in August dragged the growth rate in the first eight months down to 4%, from 4.9% in the January-July period.

Hang Seng rises for the first time in nine days

Hong Kong share market advanced for the first time in nine consecutive sessions, as investors chased for bottom fishing across the board after the strong show in the Dow overnight and on report that the Chinese central bank is boosting its stimulus program. The Hang Seng Index ended 240.40 points, or 1%, higher at 24376.41. The benchmark index has lost a total of 1182 points during last eight trading days. Market full-day turnover was HK$76.97 billion, compared to the yesterday's half-day turnover of HK$57.7 billion.

Shares of Macau gaming players extended their drop after Credit Suisse cut significantly its target prices. Credit Suisse Group AG cut its 2014 revenue growth estimate to 1% from 5%, while lowering its 2015 target to 8% from 11%. Nomura Holdings Inc. said Macau gaming companies may see further downgrades on weaker revenue outlook. Sands China (01928) plunged 3.8% to HK$42.5. Galaxy Ent (00027) slipped 2.6% to HK$49.3.

PetroChina shares soared 4% to HK$10.72, becoming top blue-chip performer today, after crude prices rebounded sharply as the OPEC said it could cut its production target for 2015.

Lenovo Group jumped 3.6% to HK$12.02 as China Mobile uncertain iPhone 6 start date gives rivals an opening to gain market share.

Sincere shares soared 27% to HK$0.7 on speculation of potential acquisition target after the company said its executive Chairman Walter Ma just passed away, and named Philip Ma as new Chairman.

Sensex rebounds

Indian stock market rebounded from nearly 2-1/2-week lows hit in the previous session, as hopes the U.S. Federal Reserve would keep its stimulus measures. The benchmark BSE Sensex rose 0.52%, or 138.78 points, to end at 26,631.29. The broader Nifty gained 0.54%, or 42.60 points, to end at 7,975.50.

Exporters led the gains on hopes of being safe bets ahead of U.S. Federal Reserve's policy outcome. Infosys rose 2.5%, Tata Motors Ltd ended 1.4% higher, while Dr.Reddy's Laboratories Ltd gained 2.4%.

Metal shares advanced after China's economic stimulus raised hopes of a boost in demand from the World's largest consumer. Tata Steel Ltd gained 1.7%, Hindalco Industries advanced 0.2% and JSW Steel rose 2.8%.

Cement stocks gained on hopes demand will pick up as construction activity will be in full swing as the southwest monsoon starts withdrawing. ACC (up 0.59%), Ambuja Cements (up 1.23%), and UltraTech Cement (up 1.8%), all gained.

Elsewhere in the Asia Pacific region-- Taiwan's Taiex index advanced 0.68% to 9195.17. South Korea's KOSPI index increased 0.96% to 2062.61. Singapore's Straits Times index rose 0.73% to 3296.48. Indonesia's Jakarta Composite index added 0.02% to 5144.90. Malaysia's KLCI dropped 0.19% to 1843.78. New Zealand's NZX50 slid 0.91% to 5142.34.

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