Asia Pacific share market declined on Friday, 16 January 2015, catching a negative lead from the Wall Street overnight, another downturn in oil prices, and Switzerland's Swiss National Bank (SNB) unexpected move to scrap some currency controls spurred a flight to haven assets.
The preemptive action by the Swiss central bank to front run a massive balance sheet expansion by the European Central Bank sent shock waves across the global markets. In less than a month after the Swiss National Bank (SNB) pledged to keep the franc above 1.20 per Euro with utmost determination, it, on Thursday, surprised the market by announcing to abandon this commitment. The move was accompanied by reduction of interest rates on sight deposits by -0.5 percentage point to -0.75%. The central bank indicated that Swiss franc has depreciated and helped the economic recovery during the period when the floor was imposed. Swiss Franc surged over 40% and was recorded as the large currency move on record since the Bretton Woods system in 1971.
WALL STREET: U.S. stocks fell for a fifth day on Thursday, with the S&P 500 finishing below 2,000 for the first time in a month, as crude prices fell, large U.S. banks reporting disappointing results, and Switzerland's central bank unexpectedly gave up its minimum exchange rate. The Standard & Poor 500 index was down 0.9% to close at 1992.67. The Dow Jones industrial average dropped 0.6% to 17320.71, while the Nasdaq composite fell 1.5% to 4570.82.
OIL: WTI for February delivery fell $2.23, or 4.6%, to end at $46.25 a barrel on the New York Mercantile Exchange on Thursday. Brent for February settlement, which expires today, fell $1.02, or 2.1%, to $47.67 a barrel on the London-based ICE Futures Europe exchange.
Among Asian bourses
Australia stocks suffer fifth straight loss
Australian share market finished lower, registering fifth session of consecutive drop, with shares of healthcare, energy, retailer, and financial companies being major losers. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both declined by 0.6% to 5299.20 and 5278.80, respectively.
Health Care stocks weighed most heavily on the local market, with the fall was led by CSL, which dropped 3.8% to A$83, as the US national health institute flagged issues with the biotechnology manufacturer's season's flu vaccines. Cochlear was down 2.6% to A$78.04 and ResMed declined 1.6% to A$7.22.
Energy stocks declined, as oil prices continued to fall, with Australia's biggest dedicated oil producer Woodside Petroleum erasing 2.6% to A$34.16, while Oil Search declined 1% to A$7.14 and Origin Energy dropped 1.4% to A$10.49.
Financial stocks also ended down, with Westpac Banking Corp erasing 0.1% to A$32.76, while ANZ Banking Group shed 0.8% to A$31.50 and National Australia Bank lost 0.5% to A$33.37. Commonwealth Bank of Australia was up 0.1% to A$83.57.
Nikkei drops 1.43% on stronger yen
Japanese share market closed steep lower, as risk aversion selloff triggered across the board, on tracking negative finish of Wall Street overnight and dramatic moves on the forex market. The Nikkei Stock Average was down 1.43% to 16864.16 and the broader Topix was weaker by 0.93% to 1363.73. For the week, the Nikkei index dropped 1.9%, putting it down 3.4% for 2015.
Shares of blue-chip exporters declined the most in Tokyo, hurt by the stronger yen, with Sony Corp falling 4.6%, Nikon Corp down 2.3%, Kyocera Corp down 3.1%, Nissan Motor Co lower by 0.5% and Subaru maker Fuji Heavy Industries down 1.7%.
Shares of semiconductor-related Japanese firms were mostly down Friday, after industry titan Intel offered a cautious first-quarter outlook. Chip testing gear maker Advantest fell 1.6%, while chip equipment maker Tokyo Electron slipped 1%. Among individual share movers, Skymark Airlines Inc added 1.4%, helped by a fresh plunge in oil prices and on a report that a planned tie-up with larger rival ANA Holdings Inc. had been called off. (Shares of ANA fell 1.4%).
Shares of Amada Co. rallied 1.7% after the machine-tool company posted an almost tripling of its nine-month operating profit.
China stocks extend gain for second day
Mainland China share market closed higher for second consecutive session, as risk appetite buying across the board, led by shares of gold miners and lenders, amid speculation the government will take more steps to boost economic growth. The Shanghai Composite closed up 1.2% at 3376.50, putting the market up a total of 2.8% for the week.
The Mainland market sentiments remained buoyant following Thursday's lending data. Loan growth is slowing in China but total social financing--which encompasses shadow banking credit--picked up. Chinese banks issued 697.3 billion yuan (US$112.6 billion) worth of new loans in December, down from 852.7 billion yuan in November, data from the People's Bank of China showed Thursday. At the same time, total social financing, a broader measurement of credit in the economy that include bank lending as well as shadow bank financing activities, rose to 1.69 trillion yuan in December from 1.15 trillion yuan in November. For the full year of 2014, Chinese banks extended a total of 9.78 trillion yuan in new yuan loans, a new high for annual credit growth.
Technology shares extended the biggest rally among industry groups after the State Council said this week it will set up a 40 billion yuan fund to support emerging industries. Yonyou Software Co. surged 10%. DHC Software Co. jumped 7.9%, while Shanghai Wangsu Science & Technology Co gained 7.5%.
Commodity stocks also pulled the market up, with gold miners shooting higher after global prices of the precious metal rose by 2.5% overnight, for a fifth consecutive gain. Zhongjin Gold Corp. rose by 5.3% and Zijin Mining added 3.9%.
Shares of financial companies registered substantial gains in the Beijing market, with Bank of Communications up 5.3% and Bank of China gaining 2.3%.
Hang Seng ends 1.02% down
Hong Kong share market closed lower, catching a negative lead from the Wall Street overnight and drop in the other regional bourses after Switzerland's surprise move to scrap some currency controls. The Hang Seng Index ended 247.39 points, or 1.02%, higher at 24103.52, off an intra-day high of 24253.09 and low of 24086.21. Turnover increased to HK$94.92 billion from HK$93.11 billion on Thursday.
Energy stocks declined, as global crude prices resumed their fall after a brief recovery. PetroChina Co led losses with a 1.6% drop to HK$8.72, while China Petroleum & Chemical Corp. (Sinopec) lost 1.4% to HK$6.19, and Kunlun Energy Co sank 0.4% to HK$7.65.
Financial stocks also ended lower, with Industrial & Commercial Bank of China down by 1.1% to HK$5.68 after reports said it plans to sell 11.3 billion yuan ($1.8 billion) worth of asset-backed securities.
Macau gaming counters were lower after Barclays Research lowered its target prices. Galaxy Ent (00027) slid 4.5% to HK$38.35 and Sands China lost 1.1% to HK$36.95.
Luxury watches retailers were mostly weaker after Swiss franc soared after the Swiss central bank abandoned attempts to cap the currency's value. Hengdeli (03389) plunged 5.4% to HK$1.4. Oriental Watch (00398) dipped 2.8% to HK$1.38. But Emperor Watch (00887) gained 2.8% to HK$0.37.
COLI (00688) dipped 2.8% to HK$24.55 even the company clarified that the temporary suspension of sale of the property was due to normal administrative measures.
Sensex ekes out small gains
Indian stock market eked out small gains amid divergent trend among the various index components. As per provisional figures, the S&P BSE Sensex was up 43.78 points or 0.16% at 28,119.33. The 50-unit CNX Nifty was up 21.15 points or 0.25% at 8,515.30, as per provisional figures.
Union Bank of India joined United Bank of India in cutting base rate after a surprise reduction in repo rate announced by the Reserve Bank of India (RBI) yesterday, 15 January 2015, morning. The RBI surprised financial markets by announcing a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review yesterday, 15 January 2015, and stated that easing of inflationary pressures provided headroom for a shift in the monetary policy stance. Capital goods stocks rose. TCS dropped after reporting disappointing growth in services revenue in Q3 December 2014. Shares of PSU OMCs declined.
Meanwhile, the Ministry of Commerce & Industry today, 16 January 2015, said that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs 75000 crore over the next 2-3 years.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 0.3% to 9138.29. South Korea KOSPI was down 1.4% to 1888.13. New Zealand's NZX50 fell 0.45% at 5616.73. Singapore's Straits Times index declined 1.14% at 3300.68. Indonesia's Jakarta Composite index slipped 0.78% to 5148.38. Malaysia's KLCI fell 0.08% to 1743.57.
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