Asia Pacific share market mostly advanced on Monday, 07 December 2015, as risk appetite buying encouraged by sharp gains in U.S. equities late last week after data showed the strength of the world's largest economy.
The regional share market started the day with a resurgent note powered by 2% gains on US markets on Friday night following the latest non-farm payrolls print, which showed an increase of 211,000 in November, and upward revisions for September and October. The upbeat US job data doused the jitters over a possible US interest rate hike in December for the first time in almost a decade.
Market participants now expect the U.S. Federal Reserve to raise its key interest rate for the first time in more than nine years at its policy-setting meeting next week, but there are growing hopes that the U.S. economy will withstand the anticipated Fed rate hike.
The healthy US job data that added cheer to the investors even though energy sector stocks were affected by the weakness in oil prices induced by oil exporters club OPEC's decision not to cut production volumes. Crude oil prices were near their lowest since 2009 in the wake of the Organization of the Petroleum Exporting Countries' (Opec) decision to keep production high despite depressed demand. Brent was last down 24 cents at $42.76 a barrel, while US crude lost 41 cents to $39.56.
Among Asian bourses
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Australia stocks ends little changed
The Australian share market finished the session marginally higher, as wave of optimism following fresh signs of robust health in the world's largest economy offset by weakness in oil prices. Among the ASX industry category, gold, realty, and consumer discretionary issues were among major gainers, while energy issue was a major decliners in the market. At the close, the benchmark S&P/ASX 200 index ended 4.10 points, or 0.08%, up at 5155.70 points. It was up as much as 1.5% earlier in the session.
Shares of materials and resources companies ended mixed after iron ore falling to a new 10-year low beneath the $US40 mark. Global miner BHP Billiton was off 0.3% to A$17.99 while Rio Tinto sank 0.2% to A$44.30 and Fortescue Mining dropped 1.9% to A$1.86. Iluka improved 1.9% to A$5.47 after the minerals sands miner said it had abandoned its bid for Ireland-based Kenmare Resources. Gold miner Newcrest Mining grew 1.9% to A$11.97, after the price of the precious metal surged, jumping over 2% to $1084 an ounce.
Oil producers were down as crude-oil prices slipped further in Asian trading Monday after the Organization of the Petroleum Exporting Countries held its production quota steady at a meeting Friday, fueling worries about a growing global supply glut. Oil and gas producer Woodside Petroleum dropped 3.7% to A$28, Oil Search declined 5.4% to A$7.52, and Origin Energy was down 5.5% to A$5.12. Santos shares tanked 9.9% to A$3.81.
Shares of banks and financials were also higher. Australia & New Zealand Banking Group added 0.6% to A$27.27, Commonwealth Bank of Australia 0.4% to A$80.51, Westpac Banking Corp 0.7% to A$32.52. National Australia Bank fell 0.2% at A$29.56. Elsewhere, insurance comparison firm iSelect was collapsed 11.1% to A$1.08 after it announced it had turned down a takeover bid from private equity.
Nikkei rallies on strong overseas lead, softer yen
The Japanese share market advanced, following the gains of US markets on last Friday, amid a wave of optimism following fresh signs of robust health in the world's largest economy. 28 out of 33 TSE industry groups advanced, with the day's notable gainers comprised Foods, Retail Trade, Services and Precision Instruments issues. The Nikkei 225 index at the Tokyo Stock Exchange rebounded 0.99%, or 193.67 points, to 19698.15. The wider Topix index of all first-section shares added 0.71%, or 11.19 points, to 1585.21.
Shares of export-related companies advanced as the yen softened to lower 123 level per dollar today after weakening 0.4% on Friday. The weaker yen boosted Japanese exporters' earnings prospect when they repatriate it home. Automakers Toyota, Fuji Heavy and Honda attracted buying as hopes grew that new vehicle sales will increase in North America on the back of a robust rise in nonfarm payrolls and the average hourly wage in the United States in November, brokers said.
Industrial robot-maker Fanuc, Amada Holdings and other machinery producers were buoyant on news that Japan's ruling bloc may halve the fixed asset tax rate for fresh capital spending by small companies.
Retailers were also higher, led by Ryohin Keikaku Co, up 3.5% after reports that operating profit at Muji brand-operator rose to a record in the March-to-November period. Shares of other retailers such as Aeon Co. and Fast Retailing Co. advanced at least 1.7%.
Railway stocks ended stronger, with West Japan Railway Co. rising 1.7% after Mizuho Financial Group Inc. raised its rating on shares of the railway operator. East Japan Railway Co. increased 1.8%.
Shares of energy explorers slipped after OPEC opted not to impose a limit on output. Energy explorer Inpex Corp. fell 1.5%, while Japan Petroleum Exploration Co. dropped 1.6%.
China market jumps 0.34%
The Mainland China stock market ended higher, as investors chased for value buying, led by health-care, technology and consumer-discretionary stocks. The Shanghai Composite Index ended 0.34%, or 11.94 points, up at 3536.93 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, advanced 1.26%, or 28.15 points, to close at 2261.41. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, added 1.71%, or 46 points, to close at 2738.15.
Investors appeared on Monday to favour sectors seen benefiting from a government-engineered economic restructuring. President Xi Jinping's government is trying to boost the role of privately owned technology and service businesses, while downsizing state-run industrial and financial giants.
Shares of health-care, consumer-discretionary and technology companies were top gainers among SSE industry groups. Chinese traditional medicine maker Beijing Tongrentang Co. jumped 10% daily limit. Huayi Brothers Media Corp., China's biggest listed film maker, gained 5.9%, while Wangsu Science & Technology Co. added 2.7%.
Shares of realty and financial companies were major drag among SSE industry groups, amid profit booking following sharp recent gains. China Vanke Co slumped more than 5%, after disclosing that the recent jump was the result of Shenzhen Jushenghua Co buying additional shares, and becoming Vanke's top shareholder.
CITIC Securities fell 1.8% after the company said on Sunday that it was not able to contact two of its top executives, following media reports that they had been asked by authorities to assist in an investigation.
Sensex, Nifty hit almost three-week closing low
Indian stock market ended softer, as losses for index heavyweight ITC and stocks of oil exploration and production (E&P) companies. The barometer index, the S&P BSE Sensex, lost 108 points or 0.42% to settle at 25,530.11. The Nifty declined 16.50 points or 0.21% to settle at 7,765.40.
Index heavyweight and cigarette major ITC declined sharply after a committee headed by the Chief Economic Adviser Dr. Arvind Subramanian on possible tax rates under goods and services tax (GST) in its report recommended a steep 40% tax on tobacco and tobacco products. The committee has suggested standard GST rate at 17% to 18%. Typically, the majority of the goods and services will be taxed at the standard rate under the GST regime. FMCG stocks gained. Index heavyweight HDFC edged higher.
Shares of oil exploration and production (E&P) firms declined and stocks of state-run oil marketing companies (PSU OMCs) rose as global crude oil prices fell.
NMDC declined 1.47% at Rs 90.40 after the company reduced prices of lump ore by Rs 300 per tonne to Rs 1,800 per tonne with effect from 4 December 2015. In its monthly price review, the state-run iron ore miner has kept prices of iron ore fines unchanged at Rs 1,560 per tonne. The prices are excluding royalty, taxes, DMF, duties, levies etc.
Maruti Suzuki India (MSIL) fell 0.87% at Rs 4,566 after the company reported 11.8% fall in its production to 1.03 lakh units in November 2015 over November 2014. The announcement was made after market hours on Friday, 4 December 2015.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.66% to 8454.27. South Korea's KOPSI slipped 0.54% to 1963.67. Malaysia's KLCI added 0.25% to 1672. Singapore's Straits Times index gained 0.76% at 2900.92. Indonesia's Jakarta Composite index jumped 0.29% to 4521.39. New Zealand's NZX50 fell 0.5% to 6064.43.
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