Asia Pacific Market: Stocks sluggish ahead of US payroll data

Asia Pacific share market ended lower on Friday, 02 December 2016, as investors flew to lock-in recent gains on caution ahead of the release of U.S. jobs data for November later on Friday and Italy's national referendum on constitutional amendments on Sunday

Investors are closely watching the U.S. employment data in search of a clue about whether the Fed will carry out an interest rate hike at its Federal Open Market Committee meeting in December in line with growing market expectations.

On Sunday, Italy votes on constitutional reform. The result is being closely watched for its potential to topple the government with Italy's heavily indebted banks already close to peril.

Crude Oil prices slipped on Friday as some investors opted to cash out after Brent touched a 16-month high on Thursday, with optimism over this week's OPEC-Russia accord on cutting output giving way to questions on the "sticking point" of implementing the deal. Crude prices on Friday were pressured by data showing oil output in Russia rose in November to a post-Soviet high and news that Moscow would use its record November oil production as its baseline when it cuts output. U.S. West Texas Intermediate (WTI) futures settled up 62 cents, or 1.2%, at $51.68. The 5-day gain of 12.2% was the best weekly performance since February, 2011. The Organization of the Petroleum Exporting Countries, which accounts for a third of global oil supply, will reduce production starting in January by 1.2 million barrels per day, or over 3%, to 32.5 million bpd. As part of the OPEC deal, Russia has promised to gradually cut its crude output by up to 300,000 barrels per day in the first half of 2017. Russia and other non-OPEC producer are set to meet with OPEC on Dec. 9.

Among Asian bourses

Nikkei closes down

The Japan share market ended lower, as investors opted to lock in profits prior to closely watched events (US jobs data and a weekend Italian referendum). The 225-issue Nikkei average lost 87.04 points, or 0.47%, to close at 18,426.08. The Topix index of all first-section issues finished down 5.29 points, or 0.36%, at 1,477.98. Falling issues outnumbered rising ones 1,172 to 700 in the TSE's first section, while 118 issues were unchanged. Volume slightly increased to about 2.83 billion shares from Thursday's about 2.82 billion shares.

A pause in the yen's recent weakening battered export-oriented names, including automakers Toyota, Honda and Fuji Heavy and industrial robot manufacturer Fanuc. Apple parts suppliers, such as Murata Manufacturing and Alps Electric, met with selling on a new report that the U.S. technology giant is reducing orders for iPhone 7 with suppliers due to worries about excess inventories. Other major losers included mobile game site operator DeNA, game maker Nintendo, mobile phone carrier KDDI and retail giant Seven & I Holdings.

By contrast, mega-banks Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, brokerage firm Nomura and insurer Tokio Marine were buoyant in line with higher yields on Japanese government bonds after yields on 10-year U.S. Treasuries jumped to their highest levels since June 2015.. Oil Company Inpex, trading houses Mitsui and Mitsubishi and steel makers JFE Holdings and Nippon Steel & Sumitomo Metal were also on the plus side.

Australia Market falls on profit taking

Australian share market finished session deeply in red, as a reversal of the mining rally and profit taking. With the exception of gold producers, every sector was down, with energy and financial issues leading losses on profit booking. At the closing bell, the benchmark S&P/ASX 200 index fell 56.20 points, or 1.02%, to 5444, while the broader All Ordinaries index declined 57.80 points, or 1.04%, to close at 5502.60.

Energy and mining stocks were biggest drag on the benchmark index today on profit taking following strong yesterday gain. Among energy players, Woodside Petroleum sank 1.9% to A$30.94, Oil Search 0.1% to A$7.03, and Santos 0.5% to A$4.37. Among mining shares, BHP Billiton dropped 2.3% to A$25.02 and Rio Tinto 1.1% to A$58.04. Iron ore miner Fortescue Metals Group fell 3.2% to A$6.15.

Shares of financial players snapped their three-day winning streak, with big four banks being major losers. Among major banks, Westpac declined 1% to A$31.34, Australia & New Zealand Banking Group 0.8% to A$28.46, Commonwealth Bank of Australia 1.2% to A$78.60, and National Australia Bank 1.1% to A$29.07.

Bellamy's was down 44% to close at A$6.85 after baby foods maker said that new import rules in China had created a supply glut that was hurting sales. Other China-exposed plays such as Bega Cheese and Blackmores were also languishing down 6.3% and 3.6% respectively.

China Stocks fall back on profit-taking

Mainland China stock market turned down on Friday, 02 December 2016, pushed down by selling to lock in profits following previous gains and on caution ahead of closely watched events. The Shanghai Composite Index dropped 0.9%, to 3,243.84, while the smaller Shenzhen Component Index closed 1.58% lower at 10,912.63 points. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, lost 1.76% to close at 2,143.45 points.

Securities, insurance, and telecommunications were among the day's biggest losers. Leading telecom company China Unicom slumped 6.68% to close at 6.84 yuan per share. Bucking the trend, oil and gas shares extended strong performances on Friday, with oil giant Sinopec gaining 4.36% to end the day at 5.5 yuan per share.

Next week, China's stock market will see around 54.8 billion yuan of locked-up shares released for trading, and the stock connection between Hong Kong and Shenzhen will open on December 5, allowing investors to buy and sell shares on each other's markets.

Hong Kong Stocks end sharply lower

The Hong Kong stock market finished session lower, as investors locked in gains ahead of U.S. jobs data later in the session and a weekend Italian referendum on Sunday. The Hang Seng Index ended down 1.37%, or 313.41 points, to 22,564.82 while the Hang Seng China Enterprises index declined 1.12%, or 111.08 points, to 9,781.23. Turnover increased to HK$80.9 billion from HK$74.8 billion on Thursday.

Casino players tumbled after reports that visitors carrying more than MOP120,000 cash entering Macau need to declare to the customs. Deutsche Bank said the curb add risks to Macau gaming industry. Sands China (01928) and Galaxy Entertainment (00027) slid 4% and 5% to HK$35.6 and HK$35.75. The stocks were the top blue-chip losers. Wynn Macau (01128) plunged 5% to HK$13.16.

HKEx (00388) softened 1% to HK$202.8 as the Connect factor failed to inspire buying. Mainland insurers retreated, with China Life (02628) and Ping An (02318) falling 3% and 2% to HK$21.7 and HK$41.9.

China Taiping (00966) acquired a 9% stake in Emperor Capital (00717). China Taiping dipped 3% to HK$17.42. Emperor Capital weakened by 1.2% to HK$0.81.

Sensex falls on global worries

Indian stock market extended losses for second straight session as investors hit the exit button amid mounting global concerns. Participants are in a wait-and-watch mode ahead of US jobs report as well as Italy's constitutional referendum on Sunday, which could determine whether or not the country will remain in the Eurozone. Caution also prevailed ahead of the Reserve Bank's policy review next week, leading to fall in banking counters. Sustained foreign capital outflows also affected the market sentiment. Foreign funds sold shares worth a net Rs402.62 crore on Thursday, as per provisional data released by the stock exchanges. All the sectoral indices, led by consumer durables, FMCG and auto, ended with losses up to 2.32% as selling pressure intensified. The BSE Sensex ended down 329.26 points, or 1.24% , lower at 26,230.66, its lowest closing since 28 November. The NSE 50-share Nifty dropped by 106.10 points or 1.30% to close at 8,086.80.

IndusInd Bank lost 2.1%. The bank said it proposes to raise funds by issue and allotment of senior unsecured redeemable non-convertible long term bonds in the nature of debentures (infrastructure bonds) for cash aggregating to Rs 1500 crore on private placement basis. The borrowing shall be within the overall borrowing limits of the bank as may be approved by the shareholders from time to time.

Tata Motors fell 3.5% after the company reported flat sales in November 2016. Tata Motors said its passenger and commercial vehicle total sales in November 2016 were at 38,900 units, almost flat compared with 38,918 vehicles sold in November 2015. The company's domestic sales of Tata commercial and passenger vehicles declined 6% to 33,274 units in November 2016 over November 2015. Exports surged 57% to 5,626 units in November 2016 over November 2015.

Elsewhere in the Asia Pacific region: New Zealand's NZX50 was down 0.4% to 6904.85. Indonesia's Jakarta Composite index added 0.9% to 5245.96. Taiwan's Taiex sank 0.8% to 9189.49. South Korea's KOSPI index was down 0.7% to 1970.61. Malaysia's KLCI grew 0.2% to 1628.96. Singapore's Straits Times index fell 0.3% to 2919.37.

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