Asia Pacific share market closed mostly lower on Monday, 22 August 2016, following weak global markets trend, as investors ponder the possibility the U.S. Federal Reserve is preparing for a rate increase while investors trod carefully ahead of a meeting of central bankers in Jackson Hole, Wyoming later this week.
Central bankers will gather in Jackson Hole, Wyo., for a symposium at the end of the week. Market participants are watching for any signs that Federal Reserve officials see enough economic momentum to support raising interest rates in the coming months.
Bets on a near-term rate increase rose after comments Sunday by Fed Vice Chairman Stanley Fischer that the central bank was close to hitting its targets for U.S. employment and inflation. New York Fed President William Dudley had said last week a rate hike would be possible at the Fed's next policy meeting in September. That has heightened expectations for a hawkish speech Friday by Chairwoman Janet Yellen.
Among Asian bourses
Nikkei extends gain on softer yen
The Japan share market finished higher in volatile trade, supported by the yen's easing against the dollar and other major currencies on the prospect of higher U.S. interest rates in the coming months. Total 27 out of 33 TSE sectors advanced with Land Transportation, Construction, Rubber Products, Electric Power & Gas, Services, and Retail Trade issues being major gainers. The 225-issue Nikkei stock average advanced 52.37 points, or 0.32%, to end at 16,598.19 on the Tokyo Stock Exchange. The Topix index of all first-section issues grew 8.01 points, or 0.62%, to close at 1,303.68. Rising stocks outnumbered declining ones on the Tokyo Stock Exchange by 1461 to 479 and 117 ended unchanged. The Nikkei Volatility, which measures the implied volatility of Nikkei 225 options, was down 0.05% to 22.01.
The dollar rose broadly against other major currencies, including the yen, which benefited Japanese exporters. Auto parts maker Aisin Seiki Co. rose 1.9% to Y4,795. Video game maker Nintendo Co. gained 3.1% to Y22,890.
Chip maker Renesas Electronics Corp. fell 3.1% to Y595 after saying Monday it is in talks to buy U.S.-based chip maker Intersil Corp., a move that could strengthen the Japanese company's business of making semiconductor components for cars. Renesas shares opened higher but soon gave up gains amid concerns about the hefty price tag and uncertainty over its competitiveness in an auto industry rapidly shifting to self-driving, electric cars. According to a person familiar with the discussions, the deal, if reached, would be valued at around Y300 billion ($3 billion).
ASX200 falls 0.21%
Australian share market finished edged lower, following weak global market trend, as investors ponder the possibility the U.S. Federal Reserve is preparing for a rate increase. Shares of energy, materials and banks players led market decline. At close of trade, the benchmark S&P/ASX 200 index declined 11.60 points, or 0.21%, to 5515.10. The broader All Ordinaries dropped 13.10 points, or 0.23%, to 5612.30.
Shares of energy companies sank under the weight of lower crude-oil prices in Asian trade, as investors sought to cash in gains on concerns the push higher by prices of late would encourage more U.S. shale-oil producers to return to the oil fields. Santos, which last week suspended dividend payments after swinging to a first-half loss on a writedown and lower prices, stumbled 6.8%. Beach Energy fell 6.6%, and Oil Search lost 2%. Woodside Petroleum bucked the trend, rising 1.5% as brokerages issued generally positive reviews of the company's resilience in the first half. Miners were also down. Among mining companies, Fortescue Metals Group dropped 2.4% despite reporting a tripling of its annual profit and a sharp increase in its final dividend. BHP Billiton and Rio Tinto were down 1.6% and 1.2%, respectively.
BlueScope Steel jumped 5.7% after it said its annual profit more than doubled thanks to cost cutting, increased sales and the benefit from an improvement in steel prices toward the end of its fiscal year.
China Market falls on profit booking
Mainland China stock market finished in red terrain, as some investors took profits amid concern that a weaker yuan will limit prospects for further stimulus and state-backed funds will sell shares. Most of SSE sectors declined, with industrial, infrastructure and transportation shares leading losses. The CSI300 index, which tracks the largest listed companies trading in Shanghai and Shenzhen, fell 0.84% to 3336.79 points. The Shanghai Composite Index closed down 0.7% at 3084.81 points while the Shenzhen Composite index closed down 1.27% at 2018.26 points.
Shares of infrastructure and transportation sectors were among the top losers. The two sectors rose last week as state media reported that investment by Chinese firms into One Belt, One Road countries along the new Silk Road trade route has already reached $51.1 billion. Avic Capital Co. slumped 9.7%, while Avic Aircraft Co. fell 4.9%. Train maker CRRC Corp. slipped 2.4%. Beijing Originwater Technology, a designer and builder of sewage treatment plants, lost 5.9%. Offshore Oil Engineering Co. retreated 2.5% in Shanghai as crude fell in New York.
Bank shares gained in Shanghai before they release second-quarter earnings. Industrial & Commercial Bank of China rose 0.7%, while Agricultural Bank of China and Bank of China both advanced 0.6%.
Hong Kong Market gains 0.26%
The Hong Kong stock market closed up in volatile trade, after the exchange operator's launched a circuit breaker aimed at preventing extreme volatility. But gains were limited as investors sat on the fence before U.S. Federal Reserve Chair Janet Yellen's speech at a symposium in Jackson Hole, Wyoming, on Friday. The benchmark Hang Seng Index rose 60.69 points, or 0.26%, to 22997.91 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, dropped 3.52 points, or 0.04%, to 9602.65. Turnover decreased to HK$69.5 billion from HK$75.8 billion on Friday.
COLI (00688) announced its interim earnings during lunch break. Its net profit grew 20% to HK$19.7 billion, with an increase of dividend to 35 cents. But the share price softened 0.6% to HK$26.85. China Vanke (02202) gained 1.7% to HK$20.6 after it reported 10% earnings growth to Rmb5.35 billion.
CKI Holdings (01038) edged up 0.7% to HK$67.45 even though its bid for Australian power assets was rejected. CKH Holdings (00001) edged up 0.8% to HK$98.05.
Kunlun Energy (00135) slid 4% to HK$5.84 becoming the top blue-chip loser. Credit Suisse noted its operational incompetence and rated it "underperform", with a lower target price of HK$4.8 (was HK$5.7).
Sensex hits 1-1/2-week closing low
Indian benchmark indices registered modest losses after the government named Reserve Bank of India (RBI) deputy governor Urjit Patel who is known as an inflation hawk as the new RBI governor to succeed Raghuram Rajan. The barometer index, the S&P BSE Sensex, fell 91.46 points or 0.33% to settle at 27,985.54. The Nifty fell 37.75 points or 0.44% to settle at 8,629.15.
Patel who handles the monetary policy department as the RBI deputy governor will take charge as the new RBI governor on 4 September 2016, the day when Rajan's 3-year term as the RBI governor ends. Patel's term is also for a 3 year period. By naming Patel who is a deputy governor at the central bank as the new RBI governor, the government is sending signal to markets that there will be continuity of central bank's policies.
The government early this month notified consumer price inflation target of 4% with upper tolerance level of 6% and lower tolerance level of 2% to be achieved by RBI. This target is valid until 31 March 2021.
Stocks of most public sector banks edged lower and those of private sector banks witnessed a mixed trend after Patel was named new RBI governor. NTPC edged lower after the company announced uninspiring Q1 results. Sun TV Network dropped after the company's EBITDA margin declined 166 basis points in Q1 June 2016 over Q1 June 2015
Elsewhere in the Asia Pacific region: New Zealand's NZX50 rose 0.8% to 7462. South Korea's KOSPI index declined 0.7% to 2042.16. Taiwan's Taiex index fell 0.6% to 8981.81. Malaysia's KLCI was up 0.2% to 1691.07. Singapore's Straits Times index fell 0.1% to 2841.19. Indonesia's Jakarta Composite index added 0.2% to 5427.17.
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