Headline indices of the Asia Pacific market advanced on Tuesday, May 07, 2013, taking cues from mild advances for US equity futures and last week's strong US jobs report that fuel optimism about the health of the global economy. Also underpinning appetite for risk assets was Monday's comments from Mario Draghi that the ECB is closely watching incoming data and is ready to take further action if needed, including pushing its key deposit rate into negative territory, to address economic weakness.
However, gains on the upside were largely limited, exception being Japan, as market traders awaited the release of a slew of Chinese economic data, starting Wednesday. China will release its monthly trade data Wednesday, followed by inflation numbers a day later. Figures released recently from the National Bureau of Statistics and HSBC showed Chinese economic activity had cooled in both the manufacturing and services sectors in April.
In Asian trading Tuesday, Japan's share market outperformed the region, with the Nikkei Stock Average surged 3.55% to14180.24, topping the 14,000-point level for the first time since June 2008. Investor sentiment for risk assets improved following gains on Wall Street on central-bank decisions and stronger-than-expected jobs data for April during Golden Week, when markets in Japan were closed. Meanwhile risk appetite for stocks also reinforced after the US dollar moved back above the 99-yen level, staying within reach of the psychologically important 100-yen level, after trading under 98-yen level during last Thursday's Japanese stock session.
Toyota Motor Corp rose 4.9% to 5760 yen, following a Nikkei prediction that the automaker post operating profit of around 1.3 trillion yen for the year ended March, 3.7 times more than the previous year. That figure will be 150 billion yen more than the forecast the automaker made in February, the Nikkei, said without citing its sources.
In Australia, Sydney shares ended mostly lower, weighing the benchmark S&P/ASX200 index down by 0.24% to 5143.70, as fall in construction sector to seven month low in April and as latest rate cut action already priced in yesterday following weak sales data. The Reserve Bank decided to trim the cash rate by widely anticipated 25 basis points to 2.75%, effective 8 May 2013. Anticipation for a rate cut among market players grew on Monday after the Australian government reported an unexpected decline in March retail sales. Sales fell by a seasonally adjusted 0.4%. Sales in February had risen 1.3%. In today's trade, banks and financials and consumer staples stocks tumbled despite the Reserve Bank decision to cut rates to a historical low. On the upside, shares in bullion, metal & mining, and energy shares continued uptrend for second straight day.
In New Zealand, shares in Auckland were modest higher, pushing the NZX 50 Index to a new record high, after Statistics New Zealand said labor costs there raised 0.4% q/q in the first quarter and 1.8% on a y/y basis. The NZX 50 gained 25.49 points, or 0.6%, to 4621.72. Within the index, 29 stocks rose, 11 fell and 10 were unchanged. The quarterly employment survey showed private sector average hourly wages jumped 1% in the first quarter and were higher by 2.3% on a year-over-year basis. Public sector earnings rose 1.6% and 1.4% year-over-year.
In China, Shanghai-listed shares closed choppy trading session tad higher after moving in narrow range entire day, on news report stating government would tighten rules on capital inflows. The benchmark Shanghai Composite ended the day at 2235.57, up by 4.41 points or 0.2%, after moving in the range of 2219.44-2240.26.
The top foreign exchange regulator said that China will increase scrutiny on importers and exporters who channel in money disguised as trade bills, after the yuan hit a record high last week. Yuan positions at Chinese financial institutions stemming from foreign-exchange transactions, a gauge of money flows, rose by 1.22 trillion yuan (US$197 billion) in the first quarter of 2013, more than four times as much as a year earlier.
The State Administration of Foreign Exchange (SAFE) said in a statement it would send out warning notices to companies whose goods and capital flows do not match, as well as those who are bringing large amounts of cash into China. Such companies will then be placed on the SAFE's B list, which is for companies that are more closely monitored, for three consecutive months and will only be moved back on the A list if all the relevant indicators return to the normal range, the regulator said in the statement
In Hong Kong, city shares ended inch higher after recouping losses in afternoon trade amidst broad regional gains. The benchmark Hang Seng Index ended the day 23,047.09, higher by 132 points or 0.58% from prior day. Among the 50 HK blue chips, 32 rose, while 14 fell and remaining 4 unchanged. CITIC Pacific advanced 2.8% to HK$9.96, while Hong Kong and China Gas Co dipped 1.7% to HK$23.05, making themselves the largest blue-chip gainer and loser. Market heavyweights ended largely higher. China Mobile rose 0.5% to HK$85.55, while HSBC Holdings plc rose 0.2% to HK$86.20 ahead of its earnings report after market hour.
In India, Indian stocks advanced for a second day, with the benchmark index heading for its highest level in more than 13 week, as overseas funds extended this year's record purchases of the nation's equities. The S&P BSE Sensex added 1% to 19,868 at 2:30 pm in Mumbai, bound for its highest level since 31 January. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 6 May 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 897.47 crore on Monday, 6 May 2013, as per provisional data from the stock exchanges
Elsewhere in the region, Indonesia's Jakarta Composite added 1.4%, Malaysia's KLSE Composite rose 1.4%, and Singapore's STI added 0.2%. Taiwan's Taiex fell 0.07%, and South Korea's Kospi was 0.36% down.
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