Investment rationale were mostly bearish across the regional bourses as better than expected reports on U.S. nonfarm payrolls for October rekindled worries that the Federal Open Market Committee might start tapering its quantitative easing program (bond-buying program) yet this year after all.
The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
U.S. nonfarm payrolls rose by 204,000 during October, the Labor Department said. This is well ahead of consensus expectations for jobs growth of 100,000 to 120,000. Further, previously reported data for September and August were revised upward by a combined 60,000 jobs. The unemployment did tick up slightly as expected, however, to 7.3% from 7.2%.
Meanwhile, sentiments were also weighed down on caution ahead of the outcome of Third Plenum of the 18th Party Congress tomorrow, where the new leadership is expected to provide an outline for economic policy for the next decade. Hopes are high that the plenum will announce changes to give private businesses a greater say in the economy but reforms will face resistance from officials and state companies who benefit from the status quo. Failure to implement reforms on issues from interest rates to local government debt and land ownership risks impeding boosting incomes and spurring hundreds of millions of rural residents to move to the cities.
Investors largely shrugged off better than expected economic data from the China. The Chinese government reported during the weekend that China's industrial production rose 10.3% YoY in October. Retail sales grew at 13.3% in October and producer prices fell 1.5%. Fixed-asset investment (CNFAYOY) excluding rural households in the first 10 months of the year gained 20.1%. Consumer price index (CPI), a main gauge of inflation, grew 3.2% year on year in October, up from 3.1% in September.
Among Asian bourses, Australian shares finished mostly lower after erasing early gain, with shares of precious metal, resources and financial companies led losses. The benchmark S&P/ASX 200 index declined 13.60 points, or 0.25%, to 5387.10. The broader All Ordinaries dropped 13.60 points, or 0.25%, to 5380.80.
Shares of precious metal producers were top losers in the Australian bourses on the back of pullback in bullion prices in the international market. Gold fell in heavy trade on Friday as the greenback rose with the Comex December futures gold price down by US$23.90 or 1.8pct to US$1,284.60 per ounce. Newcrest Mining fell 1.4% to A$9.74 and Perseus Mining 4.9% to A$0.39.
Orica shares climbed up 10.77% to A$21.81 after the explosives and chemicals maker posted an almost 50% gain in its fiscal-year profit. Orica's 2012/13 profit was up more than 49% from the previous year's A$403 million, which was skewed by A$247 million in write-downs. Orica expects net profit in 2013/14, before material items, to exceed the A$602 million it made in the 12 months to September 30, 2013.
In Japan, Japanese share market finished sharp higher with export related stocks leading rally on the back of yen depreciation against dollar and surprisingly strong U.S. jobs report added to signs of growth in the world's biggest economy. The benchmark Nikei225 index rose 1.3% to 14269.84 while broader Topix index gained 0.78% to 1185.65.
The greenback bought 99.01 yen in Tokyo afternoon trade, slightly weaker than 99.04 yen on Friday in New York but well up from the 98-yen level before the fresh jobs figures.
Export-related stocks advanced the most in Tokyo in the wake of yen weakness against US dollar. Tokyo Electron rose 2.45% to 5440 yen and Advantest Corp jumped 2.68% to 1149 yen. Shares in Olympus Corp dropped 2.28% to 3000 yen after the camera maker posted second-quarter operating profit that beat guidance but fell short of several forecasts.
The Ministry of Finance said on Monday that Japan's current account balance came to a surplus of Y587.3 billion in September, up 14.3% from a year-before surplus of Y513.7 billion.
In China, Chinese shares closed slight higher after recouping losses late afternoon, with the Shanghai Composite Index rising 3.34 points, or 0.16%, to 2109.47, helped by upbeat economic data for October released over the weekend. Market gains were, however, limited as investors awaiting sideline cautiously to see the outcome of Third Plenum where the new leadership is expected to provide an outline for economic policy for the next decade.
Shares of railway-related companies advanced the most in Shanghai bourse on reports China Railway Corp. will increase investment in new projects this year to 471.3 billion yuan, up from a previously planned 416 billion yuan. CSR Corp, the nation's biggest train maker, gained 7.2% to 5.08 yuan. China CNR Corp, the second largest, added 8.4% to 5.56 yuan.
Shares of Chinese property developers were weak today on reports that Beijing may ban the presale of some new homes. Shanghai raised the minimum down payment after home prices surged 17% last month, the biggest gain in the 70 cities the government tracks after Shenzhen and Guangzhou. Poly Real Estate Group Co shed 2.1% to 8.95 yuan and Gemdale Corp dropped 1.2% to 5.91 yuan.
In Hong Kong, shares in HK market surged sharply, sending the benchmark Hang Seng Index higher by 1.43% to 23069.85 while the Hang Seng China Enterprises Index jumped 1.85% to 10582.90.
Among the HK 50 blue chips, 2 stocks rose and 7 fell, with 1 stock remaining steady. China Merchants Holdings (International) Co was top blue-chip winner, raising 3.5% to HK$28.10. Belle International Holdings fell 2% to HK$9.82, becoming the top blue-chip loser. HSBC (00005) jumped 1.6% to HK$86.75. China Mobile (00941) put on 1.2% to HK$81.45. IT-related players were up, with Netdragon (00777) shot up 9.9% to HK$17.98. Kingsoft (03888) soared 7.5% to HK$19.42 ahead of its earnings report tomorrow. Tencent (00700) also put on 2.4% to HK$411.2.
In India, Indian benchmark indices declined on first trading session of the week as market sentiment was impacted adversely on concerns the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. As per provisional figures, the S&P BSE Sensex was down 163.27 points or 0.79% to 20,502.88.
The Indian rupee fell below the 63 level against the dollar. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
Central Bank of India dropped 2.91% after the bank reported a reverse turnaround in Q2 September 2013. The bank has reported during market hours a net loss of Rs 1508.74 crore in Q2 September 2013 compared with net profit of Rs 329.92 crore in Q2 September 2012. Total income rose 9.78% to 6236.51 crore in Q2 September 2013 over Q2 September 2012.
Tata Motors declined 1.95% despite the company reported a strong Q2 result. The company's consolidated net profit surged 70.7% to Rs 3542 crore on 31.1% rise in revenues to Rs 56882 crore in Q2 September 2013 over Q2 September 2012. The company said revenues grew despite weak operating environment in the India business which was more than offset by increase in wholesale volumes and richer product and market mix at Jaguar Land Rover (JLR).
Suven Life Sciences surged 15.38% on strong Q2 result. The company's net profit surged 602% to Rs 45.50 crore on 202% spurt in revenues to Rs 151.50 crore in Q2 September 2013 over Q2 September 2012. The result was announced during trading hours today, 11 November 2013. EBITDA (earnings before interest, taxes, depreciation and amortization) surged 550% to Rs 71.50 crore in Q2 September 2013 over Q2 September 2012.
Elsewhere in the region, New Zealand's NZX 50 index fell 0.59%. Indonesia's Jakarta Composite index fell 0.78%. South Korea's KOSPI fell 0.38%. Taiwan's Taiex index lost 0.57%. Malaysia's KLSE Composite shed 0.01%. Singapore's Straits Times index rose 0.3%.
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