Asia Pacific Market: Stocks fall; ECB meeting, US jobs report in focus
Turnover decreased across the regional bourses as global investors opted to be on the sideline on caution ahead of report on US jobs and a decision from the European Central Bank on monetary policy later in the week. Data on Tuesday showed eurozone inflation hitting a four-year low in May, which experts say may be the final trigger to bring about new stimulus measures from the European Central Bank on Thursday. Friday's U.S. nonfarm payrolls report was also in focus.
Among Asian bourses, Australian share market finished lower, as risk aversion selloff continued for second day despite solid economic growth figures for the March quarter. All sectors declined, exception being property trust and bullion counters, with shares of retailers, consumer goods, financials, industrials, and mining companies leading losses. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 0.6% to 5448.80 and 5426.80, respectively.
The Australian Bureau of Statistics said on Wednesday that Australian economy expanded at a stronger-than-expected seasonally adjusted 1.1% YoY in the March quarter, with an annual growth rate of 3.5%. The figures were up from a 0.8% expansion in the three months to December. Seasonally adjusted, the mining industry expanded 8.6% in the March quarter, accounting for around 80% of the headline GDP figure. GDP, excluding mining, grew just 0.3%.
Shares of retailer and consumer goods manufacturers continued decline for second day in Sydney as a monthly Australian Industry Group survey indicated retail spending declined in the wake of May's federal budget. A decision by the Fair Work Commission to lift the minimum wage by $18.70 a week to $640.90 was also negative for consumer stocks. Woolworths lost 1.4% to A$37.01, while Wesfarmers, owner of Coles, shed 0.6% to A$42.74. Harvey Norman dropped 1.6% to A$3.04, Myer 1.4% to A$2.08 and David Jones 2.8% to A$3.83.
Australand Property Group surged 5.6% to A$4.55 after Frasers Centrepoint, a Singapore property company spun off from Fraser & Neave, trumped Stockland's offer to buy the firm. Stockland gained 1.8% to A$4.01. Frasers offered A$4.48 per share compared with Stockland's A$4.43 all-share bid. Australand's board said it intends to recommend the offer in the absence of a superior proposal.
In Japan, Japanese share market closed higher after moving in and out of the boundary line. The market got a lift from a weaker yen, and building on Tuesday's 2-month closing high. But, profit-taking holding back further gains after the previous day saw the market post its best finish in two months. The benchmark Nikkei 225 index added 0.22% to 15067.96, while the Topix index of all first-section shares rose 0.44% to 1233.95.
Shares of exporters and inflation-sensitive stocks such as brokerages and real estate companies climbed up, on the back of yen weakening against the US dollar. As of the close of TSE trading, the dollar was trading at 102.72 Yen, compared with 102.29 Yen at the previous day's close. Tokyo Electron surged 3.6% to 6625 yen and Daikin Industries gained 2.6% to 6378 yen. Among financials, Daiwa Securities Group rose 0.9% to 864 yen.
Steelmakers rallied after Credit Suisse raised the stock ratings of Nippon Steel & Sumitomo Metal and JFE Holdings. Shares of Nippon Steel & Sumitomo Metal rose 3.8% to 302 yen and JFE Holdings added 3.2% to 2032 yen. Nisshin Steel climbed up 5% to 1151 yen.
Automakers gained on news that U.S. auto sales surged to 1.6 million vehicles in May, its strongest annual sales rate since before the financial crisis. Nissan Motor closed up 1.7% to 945 yen while Mazda Motor Corp rose 2.6% to 471 yen.
Japanese utilities retreated. Tokyo Electric Power Co Inc fell 2% to 435 yen, Tohoku Electric Power Co. retreated 1% to 1,096 yen and Kansai Electric Power Co. declined 0.8% to 921 yen.
SoftBank Corp added 2.3% to 7792 yen on brokerage rating up-grade. Nomura Securities said SoftBank has "significant upside," as it looks likely the company and KDDI will follow NTT DoCoMo in introducing new mobile billing plans centered on flat voice charges and data share.
In China, Mainland China market declined for fourth session in row, with shares of property developers leading losses on concerns about price cuts, while environment-protection firms surged on steps to curb pollution. However, fall on the downside was limited on optimism that economy may be steadying after a weak start to the year, thanks to better than expected factory and services sectors PMI data. The benchmark Shanghai Composite declined 0.66% to finish at 2024.83, on turnover of 57.47 billion yuan.
The final HSBC/Markit purchasing managers' index (PMI) rose to 49.4 in May, a four-month high and compared with April's 48.1. The buoyancy was mirrored by a similar acceleration in growth in the services sector, where a government-released PMI climbed to a six-month high of 55.5, up from April's 54.8. The services PMI, a barometer for the health of the economy, showed new orders jumped to an eight-month high of 52.7 in May, compared with April's 50.8.
Shares of property developers declined after media reports cited soft property demand in the mainland. Mainland media reported that China's real estate market has softened this year after last year's stellar performance due to slowing sales and funding issues. Prices rose at their slowest pace in 11 months in April. No improvement was seen in May and record-low turnover in major cities during the past holiday weekend added to concerns that an oversupply in the housing market will result in more price cuts, mainland media reported. China Vanke Co fell 2.4% to 8.20 yuan and Poly Real Estate Co 2.8% to 4.86 yuan.
Shares of environmental protection-related counters rose sharply on reports that China is considering an absolute cap on its CO2 emissions from 2016. On Friday, the central government released stricter emission standards, which take effect in July. Xuzhou Combustion Control Technology surged the maximum allowed 10% to 11011 yuan. CNlight Co locked 10% upper circuit at 10.27 yuan.
In Hong Kong, HK equity market closed weaker, catching up weak cues from Wall Street overnight drop and losses in the regional markets today. The benchmark Hang Seng Index closed 139.33 points lower at 23151.71. Turnover decreased to HK$48.16 billion from yesterday's HK$67.31 billion as global investors opted sideline on cautious ahead of an expected announcement of more stimulus from the European Central Bank on Thursday.
Shares of property counters dropped as investors fretted that soft demand for new homes in the mainland could cut prices and hurt developers. China Overseas Land & Investment was down 2.2% to HK$19.42 and China Resources Land slid 2.3% to HK$15.38.
Macau gaming players remained under pressure after May's GGR growth declined. Sands China (01928) and Wynn Macau (01128) slid 0.18% and 1.1% to HK$55.6 and HK$31.5. SJM Holdings (00880) dropped 0.93% to HK$21.35. Melco Crown (06883) and Melco (00200) plunged 4.04% and 2.45% to HK$86.65 and HK$23.9. MGM China (02282) fell 0.56% to HK$26.7 while Galaxy Ent (00027) dipped 2% to HK$58.85.
Shares of Hong Kong retailers recovered loss in the morning, after data showed April's retail sales dropped 9.8% year-on-year. Sa Sa (00178) nudged up 0.38% to HK$5.23 and Bonjour (00653) was flat at HK1.14. Chow Tai Fook (01929) put on 2.5% to HK$10.68 but Luk Fook (00590) dipped 0.51% to HK$19.7.
In India, key benchmark indices closed down today amid profit taking pressure in IT, TECk and oil & gas sector stocks amid weak global cues. The Sensex was lower by 0.21%, or 52.76 points, at 24,805.83 points, while the National Stock Exchange's (NSE's) broader 50-share Nifty was down 0.18%, or 13.60 points, at 7402.25 points.
Shares of firms involved in life insurance business rose on renewed buying following recent media reports the finance ministry could recommend an increase in the limit on foreign direct investment in insurance sector. As per recent media reports, the finance ministry could recommend an increase in the limit on foreign direct investment (FDI) in insurance sector to 49% from 26%.
Max India Bajaj Finserv (up 4.57%), Reliance Capital (up 5.08%), Religare Enterprises (up 2.58%), Aditya Birla Nuvo (up 1.4%), Exide Industries (up 3.47%), State Bank of India (up 1.54%), and ICICI Bank (up 0.86%) gained. HDFC fell 1.19%. All these firms have their presence in the life insurance sector either directly or through joint venture with foreign companies.
Markit Economics said today, 4 June 2014, its seasonally adjusted HSBC India Composite Output index edged up to 50.7 in May from 49.5 in April to 50.7 in May, indicating growth of India's private sector output for the first time in three months. The rate of expansion was, however, slight overall and well below the series average. Higher output was noted at manufacturing and services companies.
The headline HSBC Services Business Activity Index posted 50.2 in May, rising from April's reading of 48.5 and pointing to the first expansion of output in 11 months. That said, the latest increase in activity was only marginal and weak in the context of historical data. Divergent trends were seen at the sub-sector level, with only Post & Telecommunication and Renting & Business Activities registering higher output, Markit Economics said.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index fell 0.04%. South Korea's KOSPI index was up 0.33%. New Zealand's NZX50 fell 0.09%. Singapore's Straits Times index fell 0.5%. Indonesia's Jakarta Composite Index dropped 0.19%. Malaysia's KLSE Composite sank 0.39%.
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First Published: Jun 04 2014 | 4:23 PM IST