Asia Pacific Market: Stocks end mixed

Asia Pacific share market closed mixed on Tuesday, 26 September 2017, following declines on Wall Street overnight, and as geopolitical tensions came to the fore again after North Korea's foreign minister said U.S. President Donald Trump had declared war.

Traders assessed fresh geopolitical threats after North Korea's foreign minister warned overnight that his country would shoot down U.S. warplanes even if they were outside the nation's airspace, in an escalation of the threat of a military confrontation. In the U.S., the White House dismissed assertions about war and the Pentagon brushed off the military threat.

Safe haven assets were buoyed, with spot gold remaining above the $1,300 level reached overnight. The yellow metal, often regarded as a safe haven in times of geopolitical uncertainty, was mostly unchanged from overnight levels at $1,309.42 an ounce at 2:55 p.m. HK/SIN compared with the $1,290 handle most of last week.

 

Among Asian bourses

Australia Market ends edge lower

Australian equity market finished session lower, snapping two straight sessions of gains, hurt by tracking weak lead from Wall Street overnight. Most of ASX sectors declined, with financials, materials and consumer discretionary stocks were the biggest drags on the index. However, losses were capped, supported most by strong gains from energy stocks thanks to a lift in the price of oil and a lift in property shares which were hit hard last week. The S&P/ASX 200 index fell 0.22%, or 12.73 points to 5,671 at the close of trade.

The financial index slipped 0.4%. Among the "Big Four" banks, Commonwealth Bank of Australia and ANZ fell 0.9% and 0.5%, respectively, while Westpac Banking Corp and National Australia Bank Ltd traded flat.

Mining stocks slipped 0.5% to almost a five-week low, hurt by a sharp decline in coking coal and iron ore prices. Coking coal was down more than 5% as some Chinese factories reopened after recent environmental inspections, adding to glut worries, while iron ore prices edged lower as the market continued to worry about waning restocking demand at mills. BHP Billiton and Rio Tinto dropped 0.7% and 0.2%, both hitting an intraday low of over a month. Fortescue Metals Group lost 2%, closing at its weakest since July 24.

Kathmandu (KMD) was up almost 7% after the adventure retailer handed down a lift in annual sales, profit and a record dividend this morning. The result was boosted most by growth across its 166 stores in Australia (its biggest market).

Nikkei falls on stronger yen, North Korea concerns

The Japan share market closed lower, dragged lower by yen appreciation against greenback amid heightened tensions between the United States and North Korea. Market players were also paying attention to see if Federal Reserve Chairwoman Janet Yellen indicates in a speech later in the day the possibility of the Fed carrying out another interest rate hike by the year-end. The Nikkei ended 0.3% lower at 20,330.19, moving away from a two-year high of 20,481.27 hit last week. The broader Topix was flat at 1,672.74.

The escalating war of words between North Korea and the United States lifted investor appetite for the perceived safe-haven yen. The dollar was at 111.63 yen after coming off a high of 112.530 the previous day. Tracking weak U.S. tech shares, chip-related stocks Advantest Corp and Tokyo Electron Ltd tumbled 2.3% and 2.7%, respectively.

Apple suppliers Murata Manufacturing Co declined 2.9%, Taiyo Yuden stumbled 5.4%, while Nitto Denko dropped 2%, after Apple Inc fell overnight following a report that the company had told suppliers to scale back shipments of parts for its upcoming iPhone X.

Bucking the weakness, Nippon Telegraph and Telephone Corp rose 2.3% after the company said that it will buy back up to 30 million of its own shares, or 1.5% of outstanding stocks.

Japan Post Holdings Co rose 1% to 1,363 yen after it set the price for its follow-up share sale at 1,322 yen per share, a 2% discount to Monday's closing price of 1,349 yen.

China Stocks end marginally higher

The Mainland China equity market finished session marginally higher, snapping three days of losses, as investors took a wait-and-see attitude before the National Day and Mid-Autumn Festival holidays. The Shanghai Composite Index edged up 0.06% to 3,343.58 points while the Shenzhen Component Index closed 0.18% higher at 10,950.77. Total turnover at the two bourses stood at 397.7 billion yuan, down from 468.5 billion yuan on Monday.

Property shares rebounded after a recent sell-off, with China Vanke Co jumping 2.45% to 26.76 yuan and Poly Real Estate Group adding 0.76% to 10.65 yuan.

Property developer shares suffered steep losses in recent sessions after eight large Chinese cities imposed more restrictions on home resales, in an effort to rein in home prices. A number of provincial capitals across China have rolled out new measures to further slow home property sales, and bear down on lingering speculators that could destabilise markets ahead of a key Communist Party congress next month. There were also signs the authorities are stepping up their efforts to crack down on illegal lending to the sector. The latest bans on home re-sales, mostly in China's second-tier cities, may indicate a new round of all-out property tightening from the central government, and more cities are likely to follow suit.

The Asian Development Bank maintained its 2017 and 2018 forecasts for China's growth at 6.7% and 6.4%. In an update of the Asian Development Outlook 2017, its flagship annual economic publication, ADB said better-than-expected external demand, proactive fiscal policy and strong domestic consumption have combined to drive up China's growth.

Hong Kong Stocks eke gain on bottom fishing

The Hong Kong stock market closed slight higher, as investors chased for bottom fishing after the previous session's sharp falls, but market gains were marginal amid rising tensions on the Korean peninsula. The Hang Seng index rose 0.1%, to 27,513.01, while the China Enterprises Index gained 0.5%, to 10,968.39 points. Turnover decreased to HK$97.1 billion from HK$111 billion on Monday.

Shares of energy players rose more as Brent crude rose to a more than two-year high. Sinopec (00386) added 1.7% to HK$5.91. PetroChina (00857) jumped 3.5% to HK$5. CNOOC (00883) put on 4% to HK$9.9.

Tencent (00700) dipped 1.2% to HK$337.6 after big-cap tech stocks in the US market dropped overnight, including Facebook and Alphabet.

Mainland developers were mixed after yesterday's stumble. China Overseas Land & Investment (00688) fell 1% to HK$25.2. Sunac China(01918) slipped 1% to HK$31.6. Agile Group (03383) dipped 0.9% to HK$10.7. China Vanke (02202) nudged up 0.2% to HK$24.85.

Sensex, Nifty hit lowest closing level in four weeks

Key benchmark indices settled with small losses in a range-bound session of trade. The barometer index, the S&P BSE Sensex, fell 26.87 points or 0.08% to settle at 31,599.76. The Nifty 50 index declined 1.10 points or 0.01% to settle at 9,871.50. Indices fell for the sixth straight session. The Sensex, and the Nifty, hit their lowest closing level in four weeks. Weakness in global stocks amid fresh threats from North Korea weighed on sentiment on the domestic bourses.

Bank stocks were mixed. Metal & mining stocks gained on bargain hunting after recent losses. Tata Motors edged higher after media reports suggested that its foreign unit Jaguar Land Rover (JLR) is eyeing potential acquisitions of international automakers. Infosys advanced after the company said that it has launched a private cloud solution in collaboration with Micro Focus SUSE, a pioneer in open source software, providing software-defined data center infrastructure and application delivery solutions.

State Bank of India declined 0.29% at Rs 257.90. The bank said that the prospectus of SBI Life Insurance Company was registered with the Registrar of the companies, Maharashtra yesterday, 25 September 2017. The offer price for the initial public offering of SBI Life has been decided to be Rs 700 per share aggregating Rs 8386.40 crore. The IPO of SBI Life was open from 20 to 22 September 2017, with IPO oversubscribed by 3.58 times. The announcement was made after market hours yesterday, 25 September 2017.

Tata Motors gained 0.66% at Rs 410.90 after media reports suggested that its foreign unit Jaguar Land Rover (JLR) is eyeing potential acquisitions of international automakers. JLR has reportedly been holding internal discussion on acquiring other brands in order to diversify its range of vehicles. It will consider purchases of luxury marques that fit with its current portfolio. The luxury vehicle unit is also said to be exploring acquisitions of technology companies to bolster the roll out of electric vehicles and autonomous driving systems.

Infosys rose 1.09% at Rs 906.45 after the company said that it has launched a private cloud solution in collaboration with Micro Focus SUSE, a pioneer in open source software, providing software-defined data center infrastructure and application delivery solutions.

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