Asia Pacific Market: Stocks up on hopes of China potential stimulus in China

Asia Pacific share market closed higher on Monday, 31 March 2014, thanks to a positive offshore lead on Friday and speculation Chinese policymakers could move to prop up their slowing economy by providing stimulus. MSCI's broadest index of Asia-Pacific shares outside Japan tacked on 0.4%.

US stocks climbed on Friday, 28 March 2014, as consumer shares rebounded amid data showing household purchases rose the most in three months. Household purchases, which account for almost 70% of the US economy, climbed 0.3% after a 0.2% gain in January that was smaller than previously estimated, Commerce Department figures showed.

China's Premier Li Keqiang on Friday sought to reassure jittery global investors that Beijing was ready to support the cooling economy, saying the government had the necessary policies in place and would push ahead with infrastructure investment. Li said the government had policies well prepared and would roll out targeted measures step by step to aid the economy. We have gathered experience from successfully battling the economic downturn last year and we have policies in store to counter economic volatility for this year, Li said.

Recent weak economic data and mounting signs of financial risks have dimmed the outlook for the world's second-largest economy, sparking talk of imminent government action or even a mini-stimulus plan to shore up growth.

But, gain in the regional bourses were limited, on caution ahead of euro zone inflation figures due later in the global session in light of last Friday's unexpected drop in Spanish and German inflation. Investors were also opted sideline to hear Yellen speech in Chicago later in the global day to gauge whether the frigid winter was really the key cause behind the string of soft U.S. data seen earlier this year.

Among Asian bourses, Japanese share market closed higher, as yen depreciation against the greenback and reduced geopolitical fears bolstered appetite for riskier assets, with insurers, banks, and exporters leading the rally. But gains on the upside were limited after surprise decline in Japan's factory output and on concerns over the impact of sales tax increases in the domestic economic growth. The benchmark Nikkei 225 index added 0.9% to close at 14,827.83, while the Topix index of all first-section shares rose 1.38% to 1,202.89.

Export related stocks were top gainers in the Tokyo market today, thanks to yen weakness against the greenback. A stronger dollar is good for large Japan manufacturers, who can price their products more competitively overseas. Sony added 4.0%, while Yaskawa Electric ended up 3.3%. Mazda Motor Corp., a Japanese automaker that gets about 30% of its revenue in North America, gained 4.3%.

Bargain hunting of oversold shares helped insurers such as Tokio Marine Holdings rise 3.3%, while Sumitomo Mitsui Financial Group led banks with a 2.5% gain. Sumitomo Realty & Development led inflation-sensitive real estate shares higher with a 1.6% advance.

The Ministry of Economy, Trade and Industry stated on Monday that Japan's industrial production fell 2.3% on the month in February, marking the first drop in three months after +3.8% in January and +0.9% in December.

In Australia, Australian stock market finished modest higher, on the back of gains in energy, mining and consumer related stocks trading. Australia's benchmark S&P/ASX200 and the broader All Ordinaries both finished 0.5% higher at 5394.80 and 5403, respectively. In March, the ASX 200 edged up 0.1%, while the All Ordinaries eked out less than a 0.1% gain.

Shares of Australian energy companies surged, with Woodside Petroleum up by 1% to A$39.02, while Santos added 1.4% to A$13.50 and Oil Search 1.2% to A$8.46.

Australian top four lenders also finished higher today. Commonwealth Bank of Australia added 0.4% to A$77.44, ANZ Banking Group 0.7% to A$33.06, Westpac Banking Corp 0.4% to A$34.56 and National Australia Bank 0.4% to A$35.46.

Shares of materials and resources companies climbed up, with index heavyweight BHP Billiton up 0.9% to A$36.47, while rival Rio Tinto added 0.5% to A$63.55. Junior iron ore miner Fortescue Metals Group fell 1.7% to A$5.25. Australia's biggest gold producer Newcrest was higher by 0.9% to A$9.89.

Recall (REC) rose 2.9% to A$4.65 after the document storage business announced a 10 year information management deal with financial services company HSBC. The agreement, once implemented, is estimated to represent more than 2% of Recall's current annual revenue.

Diversified energy infrastructure business SP AusNet (SPN) rose 0.4% to A$1.31 after resuming from a trading halt. The company will pay A$50 million to enable the early termination of a deal with SPI Management Services for the external management of its assets.

Billionaire Kerry Stokes' Seven Group Holdings (SVW) rose 0.4% to A$8.26 after lodging a A$26.6 million takeover bid for debt laden oil and gas company Nexus Energy (NXS). SVW wants to acquire all NXS shares for two cents each. NXS shares have been suspended from trade since February, last at 5.9 cents.

Australia's housing credit grew by 0.5% in February after a 0.6% rise in January. Housing credit is up 5.8% on a year ago - the strongest annual growth in over years. Owner occupier housing credit rose by 0.4% in February to stand 4.9% higher than a year ago. Investor housing finance lifted 0.6% in February to be up 7.6% over the year - strongest in three years.

The Australian Institute of Petroleum stated on Monday that the national average Australian price of unleaded petrol rose by 5.0 cents a litre to 157.3 c/l in the week to March 30. The metropolitan price rose by 7.2 c/l to 157.2 c/l, while the regional average price rose by 0.6 c/l to 157.7 c/l.

In New Zealand, New Zealand stocks fell, as the end of financial year saw investors square their books and take profit from tech and growth stocks. Diligent Board Member Services, Xero, Pacific Edge and A2 Corp paced the decline.

The NZX 50 Index fell 2.914 points, or about 0.1%, to 5139.982. Within the index, 16 stocks fell, 22 rose and 12 were unchanged.

Power stocks were mixed ahead of the government's listing of 49% of Genesis Energy on April 17. Meridian Energy fell 0.9% to NZ$1.16. MightyRiverPower was unchanged at NZ$2.1, as was Auckland lines company Vector at NZ$2.43.

In China, Mainland China equity market extended losses for fourth session in row, as lingering concerns about liquidity crunch in the market were overshadowing speculation China will do more to support growth. The benchmark Shanghai Composite Index, which tracks both A and B shares, declined 0.41% from prior day closure to finish at 2033.3, while the Shenzhen Composite Index, which covers the smaller mainland shares, slid 0.41% to 1039.88.

Money market rates were remain hovering above liquidity alarming level on growing concerns in the market about liquidity availability after People's Bank of China soaked up a net 98 billion yuan from the market last week, almost doubling the 48 billion yuan drain prior to last week. The overnight repo, a benchmark measure of interbank funding availability, traded at a weighted average of 3.30%, up 50 bps from previous session's closure. The seven-day repo rate, a gauge of interbank liquidity conditions, was quoted at 4.23% late afternoon, down 7 bps from previous session's closure.

PREMIER Li Keqiang sought to reassure jittery global investors that China was ready to support the cooling economy, saying the government had the necessary policies in place and would push ahead with infrastructure investment. Recent weak economic data and mounting signs of financial risks have dimmed the outlook for the world's second-largest economy, sparking talk of imminent government action or even a mini-stimulus plan to shore up growth.

China Cosco Holdings rose 0.3% to 3.61 yuan after the shipper posted a return to profit in 2013 thanks to investment gains from asset disposals during a global shipping downturn, avoiding a possible delisting after losses in the two previous years. The firm eked out a slim net profit of 235.47 million yuan (US$37.92 million) for the fiscal year ending December 2013, compared with a net loss of 9.56 billion yuan a year earlier, it said in a filing to the stock exchange Friday.

SAIC Motor Corp declined 0.2% to 13.85 yuan amidst concern of the company's slower revenue growth projection offsetting the China's biggest automaker announcement to boost its dividend payout. SAIC, which owns ventures with Volkswagen AG and General Motors Co., said in its 2013 earnings report that it planned to pay investors a cash dividend of 12 yuan (US$1.93) for every 10 shares held. That represents a dividend yield of 9%, compared with 4% a year earlier.

CHINA Merchants Bank Co., the nation's sixth-largest lender, said Friday its 2013 profit rose 14.3% from a year earlier to 51.7 billion yuan in 2013, driven by growth in interest income and higher fees. The bank's net interest income rose 12% year on year to 98.9 billion yuan and net fee and commission income climbed 48% year on year to 29.18 billion yuan. Its net interest margin, the difference of interest rates paid and received, fell to 2.82%age points in 2013 from 3.03 a year earlier. Its shares closed 0.4% down at 9.82 yuan

In Hong Kong, equities of the Hong Kong market climbed up, with the benchmark Hang Seng Index higher by 0.39% to finish at 22151.06, on the back of a positive offshore lead and speculation China to roll out specific growth-supportive policies.

Among the HK 50 blue chips, 31 rose and 15 fell, with 4 stocks remaining steady. New World Development Co advanced 3.7% to HK$7.80, contributing 4-points gains to the benchmark Index and becoming the best-performing blue chip, on improved turnover in primary property sales.

CNOOC declined 5.4% to HK$11.66, contributing 36-points losses to the benchmark Index and becoming the worst-performing blue chip, after the China's biggest offshore oil and natural gas explorer net income fell 11% to 56.5 billion yuan in CY2013 from 63.7 billion yuan in CY2012.

Mainland lenders were mixed after reporting earnings for 2013. CCB (00939) rose 1.3% to HK$5.43. Minsheng Bank (01988) dipped 1.9% to HK$7.78.

Intime Retail Group Co. declined 7.5% to HK$8. after it brought in Alibaba as shareholder. The department-store operator earlier surged as much as 17% after saying it will receive about $692 million in an investment from Alibaba Group Holding Ltd.

Provisional data from the Census and Statistics Department showed that Hong Kong's value of total retail sales declined 2.3% YoY to HK$40.5 billion in February 2014. The revised estimate of the value of total retail sales in January rose 14.4% over the same period a year earlier. For the first two months of 2014, total retail sales grew 6.6% in value over the same period a year earlier. After netting out the effect of price changes over the same period, the volume of total retail sales in February shrank 2.3% over a year earlier. The revised estimate of the volume of total retail sales in January grew 16.7% over the same period a year earlier. For the first two months of 2014, total retail sales rose 7.9% in volume over the same period a year earlier.

In India, Indian stock market closed edge higher on last trading session of the quarter and the financial year ended 31 March 2014 (FY 2014) in choppy trade, with the market sentiment boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Friday, 28 March 2014. The barometer index, the S&P BSE Sensex, was provisionally up 46.30 points or 0.21%, up 132.49 points from the day's low and off 80.94 points from the day's high.

Reliance Industries (RIL) gained 1.68% to Rs 929.50 after the company announced on Saturday, 29 March 2014, that it has been awarded two contracts for exploration of oil and gas in Myanmar.

Shares of metal and mining stocks extended their recent gains triggered by growing expectations that China will take steps to stimulate its sagging economy. China is the world's largest consumer of copper and aluminum. NMDC (up 0.98%), Sesa Sterlite (up 2.54%), National Aluminum Company (up 2.98%) and Hindustan Copper (up 2.09%) gained. Hindustan Zinc rose 3.14%.

Jindal Steel & Power (JSPL) gained 4.07%. Jindal Steel & Power after market hours said Jindal Power (JPL), a company promoted by the company has commissioned the second unit of 600 MW of the 4x600 MW expansion project at Tamnar in Raigarh district of Chattisgarh on 30 March 2014. The Tamnar plant is the country's first Mega Power Project in IPP (Independent Power Plant).

Elsewhere in the Asia Pacific region, Taiwan's Taiex index added 0.85%. South Korea's KOSPI index was up 0.23%. Singapore's Straits Times index added 0.65%. Indonesia's Jakarta Composite Index rose 1%. New Zealand's NZX50 fell 0.06%. Malaysia's KLSE Composite shed 0.08%.

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