Asian markets bobbed in and out of negative territory today as fears snowballed over the potential impact of slowing growth in China, the world's second-largest economy and the driver of much of global growth over the past decade.
Plunging share prices in China, and the apparent inability of regulators there to stabilize the markets, have spooked investors already fretting over when the U.S. Federal Reserve will raise interest rates.
The People's Bank of China announced later today that it would provide 140 billion yuan ($21.8 billion) of six-day loans to commercial banks. The central bank launched these so-called short-term liquidity operations in 2013, and last provided such loans in February.
The stimulus measure follows the central bank's decision on Tuesday to cut key interest rates in an effort to support the economy. The central bank also said it would require large banks to keep less cash on reserve starting in early September, which should boost activity by making it easier for banks to lend money. The China central bank lowered the benchmark rate for a one-year loan by 0.25 percentage points to 4.6% and the one-year rate for deposits by a similar margin to 1.75%. The bank also increased the amount of money available for lending by reducing the minimum reserves banks are required to hold by 0.5 percentage points. The move came as Beijing appeared to be abandoning a strategy of having a state-owned company buy shares to stem the market slide.
Among Asian bourses
Also Read
Australia market swings to gain
The Australian share market ended higher for second day after a volatile ride, as investors chased for bottom fishing on battered blue chip stocks. Most of the ASX sectors closed higher, with energy, materials, technology, and financial stocks were the biggest gainers. The benchmark S&P/ASX 200 index advanced 35.50 points, or 0.7%, to 5172.80 points. The broader All Ordinaries index closed 35.10 points, or 0.68%, higher at 5178.90.
Shares of financial companies were up, with top four lenders leading rally. Commonwealth Bank led gains among major banks, rising 1.4% to A$76.13, meanwhile National Australia Bank rose 1% to A$31.39, Australia & New Zealand Banking Group added 0.3% to A$28.07, and Westpac Bank jumped 1.2% to A$31.28.
Shares of energy and material companies extended gains, with BHP Billiton gaining 2.6% to A$23.94 and Rio Tinto adding 0.9% to A$48.89. Oil and gas producer Woodside Petroleum added 2.6% to A$30.97. Oil Search advanced 4.9% to A$6.19, extending yesterday's 1.6% rally, after reporting a jump in its half-year profit as a surge in production offset weaker prices.
WorleyParsons was up 6.3% to A$8.13 despite warning its markets had "deteriorated" since May. The engineering group halved its final dividend and reported an annual net loss of A $54.9 million because of project write-downs and dispute settlements.
Nikkei rebounds 3.2%
Japanese share market advanced for the first time in seven consecutive sessions, as investors chased for bottom fishing on battered blue chip stocks after heavy selloff in recent sessions. Risk sentiments also improved after the Chinese central bank's easing decisions allayed market concerns over a global economic slowdown. All TSE industry groups rebounded, with shares of utilities, financials, electric appliances & precision instruments, automobile & transportation equipment, logistics and metal & mining companies being biggest gainers. The Nikkei Stock Average advanced 570.13 points, or 3.2%, to end at 18376.83 points, following six consecutive sessions of drops that totalled a 14% fall. The broader Topix index ended up 3.23% or 46.32 points at 1478.97.
Electronics parts makers rebounded. Murata Manufacturing Co rose 11% to and Nitto Denko Corp gained 9.3%. However, export-related stocks hammered due to stronger yen. A higher yen is typically negative for Japanese exporter stocks. Kyocera Corp. shed 4.8% and Honda Motor Co. fell 4.2%.
Kyushu Electric Power Co. jumped 5.2% after saying it will boost output at a nuclear reactor it restarted this month.
Insurers gained after reports stated Nippon Life Insurance Co. agreed to buy a local rival. Nippon Life will pay between 300 billion yen ($2.5 billion) and 400 billion yen to purchase Mitsui Life Insurance Co.
Wild ride continues in China
Mainland China's stock market ended lower after a volatile ride, despite a new round of stimulus measures from the central government aimed at boosting the flagging economy and slumping shares. The benchmark Shanghai Composite Index fell 37.68 points, or 1.3%, to 2,927.29 on turnover of 461.8 billion yuan (US$72.1 billion). It surged up to 4.3% and was down as much as 3.9% during the day. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 3.05%, or 53.31 points, to 1,695.76 on turnover of 432.2 billion yuan.
Investors sold Chinese stocks, even after central bank reduced interest rates and cut the amount of money banks need to hold in reserve on Tuesday -- its second such double move in two months -- in a bid to bolster its economy and end the worst stock market rout in almost two decades.
Steel makers were among the biggest losers, with Hangzhou Iron and Steel plunge by its 10% daily limit to 6.81 yuan while Baoshan Iron and Steel fell 6.18% to 5.16 yuan.
Property developers also fell, with Shanghai-listed Greenland Holdings down by its 10% daily limit to 13.30 yuan while Shenzhen-listed AVIC Real Estate Holding also lost 10% to 8.96 yuan.
Hong Kong market falls despite China rate cuts
Hong Kong stock market closed down after surrendering early gains, as excitement over China's rate cuts cooled and sentiment was soured by a renewed sell-off in mainland markets in the afternoon. The Hang Seng Index (HSI) opened up 29 points and reversed its trend. In afternoon trade, the index soared briefly by 281 points, but pared all its gains by late trade. The Hang Seng Index ended lower by 324.57 points, or 1.52%, at 21080.39 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, sank 86.11 points, or 0.91%, to 9427.93 points. Turnover reduced to HK$108.9 billion from HK$134.5 billion on Tuesday.
Financial stocks closed down as investors shrugged off potential benefits from China's overnight cuts in interest rates and reserve ratios. Bank of China slid 2.22% to close at HK$3.53. China Construction Bank fell 1.47% to HK$5.38. Bank of Communication went down 0.34% to HK$5.86. ICBC lost 0.86% to HK$4. 59. Banking giant HSBC, which accounts for the largest weighting of the Hang Seng Index, retreated 1.78% to HK$60.6. Bank of East Asia, one of the largest local banks in Hong Kong, dropped 0.76% to close at HK$26.3. Local bourse operator HKEX edged down 0.83% to HK$178.5.
Property stocks closed mixed. Sun Hung Kai, one of Hong Kong's largest property developer by market value, rose 0.42% to HK$96.6. Henderson Land dropped 1.49% to HK$46.15. CKH Holdings lost 1.96% to HK$100.3. CKH Holdings (00001) and CK Property (00001) announced their post-restructuring interim earnings reports, which beat market expectations. But both firms still weakened. CKH slipped 2% to HK$100.3. CK Property slid 3.6% to HK$50.3.
Oil majors showed muscles after crude prices stopped falling. Kunlun Energy (00135) gained 3.5% to HK$5.06. CNOOC (00883) added 1.9% to HK$8.06. PetroChina (00857) inched up 0.8% to HK$6.29. But Sinopec (00386) slipped 1.8% to HK$4.95. China Shenhua (01088) rose 2.5% to HK$13 after the company said the construction of its Qingyuan power generation project was approved by the Guangdong authorities. Shenhua said the total dynamic investment of the project is RMB8.918 billion.
Sensex settles at lowest level in more than a year
Private sector banks, public sector oil marketing companies (PSU OMCs) and index heavyweights HDFC, L&T and Infosys led losses as key benchmark indices edged lower in choppy trade. The Sensex lost 317.72 points or 1.22% to settle at 25,714.66. The 50-unit CNX Nifty lost 88.85 points or 1.13% to settle at 7,791.85. The Sensex fell below the psychological 26,000 mark. The barometer index hit its lowest closing level in more than a year. The Nifty hit its lowest closing level in more than 10 months. The market breadth indicating the overall health of the market turned negative from positive in late trade.
Bharti Airtel fell 2.57% at Rs 339.75 after it announced that it has signed a definitive agreement to acquire 100% equity stake in Augere Wireless Broadband India (Augere), which holds 20 MHz of BWA spectrum in the telecom circles of Madhya Pradesh and Chhattisgarh.
State Bank of India (SBI) dropped 3% at Rs 245.80 after lender announced after market hours yesterday, 25 August 2015, that the Central Board of the bank has cleared a proposal of preferential allotment of equity shares to Government of India, the principal shareholder of the bank. The size of the proposed preferential issue is Rs 5393 crore.
Foreign portfolio investors (FPIs) pressed substantial sales of Indian stocks yesterday, 25 August 2015. FPIs sold shares worth a net Rs 1938.19 crore into secondary equity market yesterday, 25 August 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 1963.09 crore yesterday, 25 August 2015, as per provisional data released by the stock exchanges.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.5% to 7715.59. South Korea's KOPSI added 2.6% to 1894.09. New Zealand's NZX50 jumped 0.1% to 5613.29. Singapore's Straits Times index lost 0.5% at 2873. Indonesia's Jakarta Composite index grew 0.2% to 4237.73. Malaysia's KLCI added 1.1% to 1580.37.
Powered by Capital Market - Live News
