Asia Pacific share market declined on Tuesday, 13 October 2015, amid deepening concerns about slowdown in the world's second-largest economy after weaker than expected China trade data. The MSCI Asia Pacific Index fell 0.9% to 132.94.
The latest data from the General Administration of Customs of China showed Chinese exports fell 1.1% in yuan terms from a year earlier in September, after a 6.1% decline on year in August. Meanwhile, imports fell 17.7% in yuan terms compared with a 14.3% decrease in August. This left a trade surplus of 376.2 billion yuan. The results deepened concerns about slowdown in the world's second-largest economy and has shaken regional financial and commodity markets that rely heavily on Chinese demand.
However, losses in the regional bourses were limited as speculation global central bankers will maintain stimulus, at least through the end of the year.
Fed governor Lael Brainard urged FOMC to hold off from rate hike until the risks to recovery from global developments are cleared. She viewed that "the risks to the economic outlook as tilted to the downside". And those risks "make a strong case for continuing to carefully nurture the US recovery - and argue against prematurely taking away the support that has been so critical to its vitality." Chicago Fed president Charles Evans said that it's "way too early" to judge warrant a hike in December. But he noted that " the best choice is middle of 2016 until I see data that are stronger that lead me to have more confidence in inflation."
ECB governing council member Vitas Vasiliauskas said that there is "no need" for additional stimulus measures. And, there isn't any need for "additional fine-tuning" of the quantitative easing program. He said the current program is working and the "best evidence of effectiveness" could be seen through the lending channel. And, Eurozone economy is "in better shape" and the main challenges is "related with international factors".
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Among Asian bourses
Australia market logs second straight losses
The Australian share market declined for second straight day amid deepening concerns about slowdown in the world's second-largest economy after China's trade data showed a larger-than-expected slide in imports. Most of the ASX industry blue-chip stocks slid, with material and energy producers being major losers. The benchmark S&P/ASX 200 index declined 30 points, or 0.57%, to 5202.90 points, while the broader All Ordinaries index sank 32.80 points, or 62%, to 5234.60 points.
Shares of material and oil explorer companies were top losers in the Sydney financial market today, after pullback in crude oil prices overnight and latest trade figures out of China rekindled concerns over demand from the world's second-biggest economy. Among top miners, BHP Billiton lost 2.2% to A$24.81 and Rio Tinto sank 2.6% to A$53.40. Iron-ore producer Fortescue Metals Group tanked 8.8% to A$2.19 despite iron ore actually rising overnight. Among energy stocks, Woodside Petroleum declined 2.1% to A$31.36, Origin Energy 5.4% to A$5.93, and Santos 6.2% to A$5.56.
The latest National Australia Bank survey showed a partial recovery in business confidence in September as the Government's leadership uncertainties were resolved, while financial market volatility and emerging market concerns have moderated from the heights of the previous month - although market concerns remain elevated. The business confidence index rose 4 points, to +5, which more than unwound last month's decline, but is still well below the mid-year peak. Business conditions held steady at an above average +9 index points in September.
Nikkei falls after China trade data signals slowdown
The Japanese share market ended softer, due to profit-taking after Chinese export data added more evidence about slowdown in the world's second largest economy. Total 22 out of 33 TSE first-section sector sub-indexes weighed down, with Mining, Banks, Insurance, Real Estate, and Securities & Commodities Futures issues being major losers. The Nikkei Stock Average stumbled 203.93 points, or 1.1%, to end at 18234.74 points, meanwhile the broader Topix index slid 0.79%, or 12 points, to 1503.13 at the close. Japanese market was closed for a holiday on Monday.
Shares of resource-related counters were the hardest-hit after a more than 5% tumble in crude oil prices overnight. The drop in crude oil largely after the Organization of the Petroleum Exporting Countries reported that its output rose to a more-than-three-year high last month, pointing to supply glut. Inpex Corp plummeted 3.4% to 1228. yen, while JX Holdings Inc sank 1.3% to 487 yen and Idemitsu Kosan lost 1.3% to 2018 yen.
Shares of Rakuten Inc dropped 3.3% to 1588.50 yen after the e-commerce giant said it is investing in Madrid-based taxi-booking app Cabify.
Sharp Corp shares leaped 6.5% to 148 yen on reports that government-backed fund Innovation Network Corporation of Japan (INCJ) is considering a range of options to help the troubled Japanese electronics maker.
The Bank of Japan (BOJ) released minutes from its recent policy meeting where it maintained its pledge to increase base money at an annual pace of 80 trillion yen ($666 billion).
China market ends higher
The Mainland China's stock market finished higher in volatile trade, extending its winning streak to fifth straight session, after China's central bank expanded a pilot program to boost the banks' lending ability to shore up the real economy. Meanwhile, buying momentum also underpinned on possibility of further stimulus measures when Beijing meets later this month to discuss the 13th five-year plan. However, market gain was limited after weaker than expected trade data. Total 6 out of 10 SSE sectors added strength to the key index, with technology, telecommunication, and consumer goods stocks being major gainers and helping to offset losses in energy, financial and healthcare stocks. The Shanghai Composite Index advanced 0.17%, or 5.57 points, to close at 3293.23 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.05%, or 19.84 points, to 1907.12. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, grew 1.09%, or 25.26 points, to close at 2342.04.
China's central bank announced over the weekend that it would expand a pilot scheme on relending, the latest effort by the government to help support a slowing economy. The scheme, which allows banks to refinance high quality credit assets rated by the central bank, was introduced in Guangdong and Shandong provinces last year. It will be expanded to include nine municipalities and provinces, namely Shanghai, Tianjin, Liaoning, Jiangsu, Hubei, Sichuan, Shaanxi, Beijing and Chongqing. The move is expected to cut borrowing costs and guide more funds into agriculture and small enterprises to boost the real economy. The PBOC said the move will enhance the effectiveness and flexibility of monetary policy operation, solve the problem of insufficient qualified assets for re-lending at financial institutions and guide lending towards agricultural and small-medium enterprises.
The Communist Party of China Central Committee will hold a key meeting during Oct. 26-29 to deliberate on an economic and social development plan for China over the next five years.
China's exports and imports fell in September as global demand remained weak, signaling that the world's second-largest economy continues to struggle into the end of the year. The latest data from the General Administration of Customs of China showed Chinese exports fell 1.1% in yuan terms from a year earlier in September, after a 6.1% decline on year in August. Meanwhile, imports fell 17.7% in yuan terms compared with a 14.3% decrease in August. This left a trade surplus of 376.2 billion yuan. The results deepened concerns about slowdown in the world's second-largest economy and has shaken Australia markets, which counts China among its biggest trading partners.
Shares of technology and consumer staples companies were biggest gainers among SSE industry groups. People.cn Co., the online business of the Chinese Communist Party's official newspaper, jumped by the 10% daily limit. Bright Dairy & Food Co. gained 2.7%.
Hong Kong market ends softer
Hong Kong stock market ended down in volatile trade, in tandem with losses in the other regional markets after Chinese trade data signaled latest evidence of weakening global and domestic demand slowdown in the world second largest economy. The Hang Seng Index declined 130.47 points, or 0.57%, to 22600.46 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, slid 100.50 points, or 0.95%, to 10437.69 points. Turnover reduced to HK$79.9 billion from HK$87.2 billion on Monday.
Shares oil oil-explorers declined after crude prices dipped more than 5% on oversupply woes as members of OPEC saw their output reach new 3-year high. CNOOC (00883) slipped 3% to HK$9.13. PetroChina (00857) slid 2% to HK$6.26. Aviation counters were boosted by lower fuel prices. China East Air (00670) rose 3% to HK$4.8.
China Resources Land (01109) shares declined 0.2% to HK$21.35 after the realty developer said the group achieved contracted sales of about Rmb6.92 billion in September with contracted GFA of about 624,700 square metres, a decrease of 8.2% and 9.4% from a year earlier. For the first nine months of 2015, the accumulated contracted sales of the group amounted to about Rmb63.5 billion with corresponding GFA sold of about 5.22 million square metres. Total rental income from investment properties achieved about HK$518 million for September and about HK$4.66 billion for the nine months ended 30 September 2015.
Gemdale Properties (00535) shares declined 2.4% to HK$0.40 after the developer said its contracted sales for September amounted to about Rmb823 million, with an aggregate contracted sales area of about 48,300 square metres, a decrease of 29.2% and 42.9% from a year earlier. The average selling price was about Rmb17,000 per square metre. For the first nine months of 2015, the aggregate contracted sales amounted to about Rmb6,841 million with contracted sales area of about 399,500 square metres.
Sensex, Nifty trades lower in afternoon
A bout of volatility was witnessed as key benchmark indices on tracking weakness in global stocks. Asian and European stocks dropped after Chinese trade data signaled weakening global and domestic demand, the latest evidence that the world's No. 2 economy is stalling. At 14:16 IST, the barometer index, the S&P BSE Sensex, was off 136.15 points or 0.51% at 26,767.96. The 50-unit CNX Nifty was off 36.55 points or 0.45% at 8,107.05.
Pharma stocks declined. Glenmark Pharmaceuticals (down 1.92%), Wockhardt (down 1.27%), Sun Pharmaceutical Industries (down 1.35%), Strides Arcolab (down 0.34%), Divi's Laboratories (down 0.33%), GlaxoSmithkline Pharmaceuticals (down 0.33%) and Dr Reddy's Laboratories (down 0.21%) edged lower. Cipla (up 0.1%), Lupin (up 0.28%) and Ipca Laboratories (up 1.18%) edged higher.
FMCG stocks also edged lower. Dabur India (down 2.64%), Godrej Consumer Products (down 2.54%), Britannia Industries (down 2.09%), Nestle India (down 2.33%), Tata Global Beverages (down 1.93%), Bajaj Corp (down 2.02%), Marico (down 0.97%), Jyothy Laboratories (down 1.03%), GlaxoSmithkline Consumer Healthcare (down 0.25%) and Colgate Palmolive (India) (down 0.36%) edged lower. Procter & Gamble Hygiene and Health Care (up 0.24%) edged higher.
The latest data showed acceleration in consumer price inflation in September 2015, mainly due to increase in vegetable prices. Another data showed that a surge in production of two items contributed to more than half of the 6.4% increase in industrial production in August 2015. Inflation based on the consumer price index (CPI) increased to 4.4% in September 2015 from with 3.7% in August 2015. The core CPI inflation rose to 4.1% in September 2015 from 3.9% in August 2015. Growth in industrial production (IIP) hit its highest level in almost three years on the back a surge in the output of the manufacturing sector. Gems and jewellery and rubber insulated cables contributed to more than half of the 6.4% increase in industrial production in August 2015.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.1% to 8567.92. South Korea's KOPSI lost 0.1% to 2019.05. New Zealand's NZX50 climbed up 0.2% to 5702.82. Singapore's Straits Times index fell 1.6% at 2984.88. Indonesia's Jakarta Composite index sank 3.2% to 4483.08. Malaysia's KLCI rose 0.1% to 1711.14.
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