Asia Pacific share market advanced for second straight day on Wednesday, 09 September 2015, as appetite for risk assets bolstered globally on tracking strong rally in the United States and Europe overnight. Market gains were amplified further after China's Finance Ministry promised to implement stronger fiscal measures to achieve the annual growth target. The MSCI Asia Pacific Index climbed 4.3% to 129.55, heading for its biggest advance since April 2009.
Major Wall Street indices all posted gains of more than 2% overnight. The Dow Jones industrial average rose 390.3 points, or 2.42%, to 16,492.68, the S&P 500 gained 48.19 points, or 2.51%, to 1,969.41 and the Nasdaq Composite added 128.01 points, or 2.73%, to 4,811.93.
China's Ministry of Finance said on Wednesday that the government will strengthen fiscal policy, boost infrastructure spending and speed up reform of its tax system to support the economy, adding to other steps by authorities to re-energise sputtering growth.
Japan Prime Minister Shinzo Abe said that the government plans to reduce the corporate tax rate by a cumulative 3.3 percentage points over two years.
Among Asian bourses
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Nikkei posts biggest one-day rise since 2008
The Japanese share market ended sharply higher, as risk sentiments propelled by tracking strong rallies in the Wall Street overnight, reiterated pledge from Prime Minister Shinzo Abe to lower the corporate tax rate, and yen depreciation against the major currency baskets. All of the Topix's 33 industry groups rose, with Pharmaceutical, Insurance, Financial Business, Securities & Commodities Futures, Rubber Products, and Nonferrous Metals leading the advance. The Nikkei Stock Average spurted 1343.43 points, or 7.71%, to end at 18770.51 points, its biggest gain since October 2008. The broader Topix index surged 6.4%, or 90.66 points, to 1507.37 at the close in Tokyo.
Japanese yen depreciated against greenback as rally in the stock market globally prompted investors to sell the safe-haven currency. Around late afternoon, the U.S. dollar advanced to 120.25 yen from Y119.81 late Tuesday in New York. The Japanese currency was also lower against the euro, which rose to Y134.29 from Y134.24 late Tuesday.
Mr Abe, who just won a mandate to lead the ruling Liberal Democratic Party for another three years on Tuesday, told a meeting of investors that he would seek to lower corporate tax and sounded optimistic on reaching a trans-Pacific trade deal. Abe said that the effective corporate tax rate, currently at around 35%, would be lowered at least by 3.3% next year. He also pledged to "go beyond that if possible". Abe said that the government will "push forward in reducing the rate down into the twenties over several years, bringing it to a level that compares favourably in the international context." And he said that will change Japan into a country for sustainable growth. Market participant were expecting easing of the corporate tax burden is a step toward giving companies more profits to put into employees' pockets.
Exporters were mainly on the front foot as the yen was weaker against its rival currencies during Asian trade today. The yen traded at 120.49 per dollar, weakening for a third day. Fanuc Corp jumped 8.4% to 20570 yen and Softbank Group Corp added 5.5% to 6615 yen. Hitachi Construction Machinery rose 7.6% to 1877 yen and Komatsu added 3% to 2033 yen. Sony Corp surged 8.6% to 3114 yen and Canon Inc jumped 5.1% to 3796yen. Fast Retailing Co. jumped 10.1% to 49725 yen. Murata Manufacturing Co, a leading Apple Inc supplier, rose 9.1%, ahead of the unveiling of new iPhone and iPad models. Toyota Motor Corp. rose 6.3% to 7491 yen.
Fuji Heavy Industries surged 9.7% to 4348 yen after the reports that the maker of Subaru cars is considering a dividend increase
Australia market rises for second day
The Australian share market rallied for a second straight day, as strong rally in the United States and Europe overnight and gain in the other regional bourses today bolstered appetite for risky assets. Baring utilities, all ASX sectors advanced, with shares of financials, energy, materials, and consumer goods companies being top gainers. The benchmark S&P/ASX 200 index surged 105.90 points, or 2.07%, to 5221.0 points. The broader All Ordinaries index closed up 103.40 points, or 2.01%, up at 5236.90.
Financial stocks were top gainers in the ASX index, with the financial sector adding 3.1%, led by top four lenders as they recover from heavy selling recently. Westpac Bank led gains among major banks, up 4.2% to A$31.81, meanwhile Australia & New Zealand Banking Group jumped 3.7% to A$28.54, Commonwealth Bank 3.4% to A$76.72, and National Australia Bank 3.5% to A$31.27. Regional lender Bendigo & Adelaide Bank climbed up 1.7% to A$10.55 and Bank of Queensland rose 3.5% to A$12.54.
Resource stocks also ended stronger in the ASX index, with the materials sector adding 1.3% and energy rising 1.6%. Among the big miners, Rio Tinto rose 2.6% to A$51.51 and Fortescue Metal gained 4.1% to A$2.04. BHP Billiton ended 0.2% softer at A$24.56 as it went ex-dividend today. Energy heavyweight Origin Energy advanced 3% to A$7.95 and Santos jumped 5.9% to A$4.67. Oil and gas heavyweight Woodside Petroleum recovered from Tuesday's decline with a rise of 0.8% to A$29.90. Oil Search let go of some of its surge on Tuesday after receiving a takeover offer from Woodside with a fall of 0.6% to A$7.85.
Shanghai Composite extends gain
The Mainland China's stock market advanced for second straight session amid optimism the government will succeed in shoring up equities after a $5 trillion rout. Bargain buying amplified further after statement from finance ministry that China will implement stronger fiscal policy to boost its economy. The Shanghai Composite Index gained 2.29%, or 72.64 points, to 3243.09 points, on the top of yesterday's 2.9% gains. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was up 3.3%, or 57.30 points, to 1798.84. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, gained 3.53%, or 70.56 points, to close at 2071.72.
China's Ministry of Finance said on Wednesday that the government will strengthen fiscal policy, boost infrastructure spending and speed up reform of its tax system to support the economy, adding to other steps by authorities to re-energise sputtering growth.
Investors were also optimistic over the possible launch of an index circuit breaker system that is set to prevent sharp drops and surges.
Regulators have urged brokerages to clean up grey-market margin loans by the end of this month, potentially triggering forced liquidation worth over 200 billion yuan ($31.38 billion), local media reported.
The Ministry of Finance also said on Monday that it would remove personal income tax on dividends for shareholders who hold stocks for over a year, in a move aimed at encouraging longer-term investment in equities as opposed to short-term speculation. It would halve the tax on dividends for those holding shares between a month and a year. Full tax payment will be required for shareholders who hold shares for less than a month. The changes came into effect yesterday.
The Shanghai Composite tumbled 39% from its June high through Tuesday to erase $5 trillion in value on mainland bourses as leveraged investors fled amid signs of deepening slowdown in the economy. China's government spent 1.5 trillion yuan trying to shore up its stock market since the rout began three months ago through August, according to Goldman Sachs Group Inc.
Technology and energy shares led gains on mainland bourses, with Searainbow Holding Corp. rising 5.7%, taking its advance this week to 28%. PetroChina Co. climbed 3.6%.
Hong Kong market rises further 4.1%
Hong Kong stock market rallied on Wednesday, 09 September 2015, extending the previous day's gains, encouraged by signs of fresh stimulus to support the world second largest economy after China's Finance Ministry promised to implement stronger fiscal measures to achieve the annual growth target. The benchmark Hang Seng Index (HSI) opened 373 points higher and saw its gains widen to 900 points at one stage. The Hang Seng Index spurted 872.27 points, or 4.1%, at 22131.31 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, grew 496.05 points, or 5.23%, to 9975.53 points. Turnover soared to HK$115.43 billion from HK$82.6 billion on Tuesday.
Shares of oil majors were boosted up after Shanghai government forecast the petrochemical industry to grow 9% in 2015. Sinopec (00386) shot up 8.5% to HK$5.37. PetroChina (00857) surged 6.8% to HK$6.3. CNOOC (00883) added 4.4% to HK$9.42.
Chinese financials rose across the board in tandem with the market uptrend. BOC (03988) advanced 7.4% to HK$3.63. CCB (00939), ICBC (01398) and ABC (01288) ascended 5% to HK$5.5, HK$4.72 and HK$3.14 respectively.
CKH Holdings (00001) yesterday announced plan to merge CKI (01038) and PAH (00006). CKH jumped 6% to HK$109.9. CKI and PAH also shot up 4.2% and 5.8% to HK$68.9 and HK$71.55, respectively.
Sensex holds gain in afternoon trade
After a sharp intraday rally, key benchmark indices trimmed gains in mid-afternoon trade. At 14:20 IST, the barometer index, the S&P BSE Sensex, was up 373.64 points or 1.48% at 25,691.51. The 50-unit CNX Nifty was up 116.05 points or 1.51% at 7,804.30.
Telecom stocks jumped on reports that the Union Cabinet has approved spectrum trading guidelines, which will allow telecom companies to buy and sell radio waves from each other. Reliance Communications (up 11.93%), Idea Cellular (up 4.65%), Bharti Airtel (up 3.63%) and Tata Teleservices (Maharashtra) (up 6.89%) surged. The spectrum trading will allow telecom companies to trade unused spectrum with other operators, without waiting for the next round of spectrum auction, report added.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 3.6% to 8286.92. South Korea's KOPSI added 3% to 1934.20. New Zealand's NZX50 rose 1.1% to 5671.42. Singapore's Straits Times index added 1.5% at 2928.18. Indonesia's Jakarta Composite index jumped 0.7% to 4347.28. Malaysia's KLCI rose 1% to 1603.36.
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