Asia Pacific share market advanced on Thursday, 09 October 2014, as appetite for risky assets underpinned after reassuring pledges by U.S. Federal Open Market Committee policy makers to keep interest rates near zero until it deemed the economy could withstand it. The MSCI Asia Pacific Index gained 0.7% to 139.05.
The minutes from the Federal Open Market Committee's September 16-17 meeting released on Wednesday, 08 October 2014, showing officials talked about possible deflationary pressures from a stronger dollar, signaling that a U.S. interest-rate increase may come later than expected. A postponing of a rate rise would benefit Asia Pacific markets as investors would be less inclined to return to the U.S. to seek returns.
Fed Policy members were concerned that the growth in US could be "slower than they expected if foreign economic growth came in weaker than anticipated." That included that "slower economic growth in China or Japan or unanticipated events in the Middle East or Ukraine might pose a similar risk." Also, some members expressed concern over appreciation of dollar due to "persistent shortfall of economic growth and inflation in the euro area" and that could "have adverse effects on the U.S. external sector." Regarding the dropping of "considerable time" in the statement, some policymakers were worried that could give false signals to the markets and trigger a rise in borrowing costs. The minutes noted that such change would "likely present communication challenges" and "caution will be needed to avoid sending unintended signals about the Committee's policy outlook."
Among Asian bourses
Aussie market bounces after Fed minutes
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Australian share market rebounded sharply from eight-month low today, amid bottom fishing across the board, led by financial and materials players after minutes from the US Federal Reserve meeting dampened expectations for an earlier-than-expected interest rate hike. The benchmark S&P/ASX 200 Index gained 55.40 points to 5296.70 and the broader All Ordinaries Index jumped 51.70 points to 5293.30. Turnover was relatively healthy with 1.86 billion shares worth of A$4.28 billion traded today.
Shares of banks and financial companies were biggest winner of the day, with top four lenders leading rally. Commonwealth Bank of Australia rose .6% to A$76.23, National Australia Bank 1% to A$32.47, ANZ Banking Group 1.7% to A$31.82 and Westpac Banking Corp 1.8% to A$32.87.
The Australian Bureau of Statistics (ABS) said on Thursday, 09 October 2014, that Australia's seasonally adjusted unemployment rate increased 0.1 percentage points to 6.1% in September 2014. The seasonally adjusted number of people unemployed increased by 11,000 to 746,600 in September 2014, the ABS reported.
Nikkei falls 0.75% on stronger yen
Japanese share market finished lower, as a stronger yen dented early gains that inspired after the US Federal Reserve minutes indicated a rise in US interest rates is unlikely in the near future. The benchmark Nikkei at the Tokyo Stock Exchange was down 0.75%, or 117.05 points, at 15478.93, while the Topix index of all first-section shares slipped 1.10%, or 14.07 points, to 1260.78.
Shares of Exporters and other currency-sensitive companies extended losses for second day after yen appreciated to upper-107 level against the greenback. The yen rose 0.2% 107.84, taking its gain against the dollar to about 2% since it reached a six-year low of 110.09 on Oct. 1. A stronger yen is generally bad for Japanese exporters, as it gives them less room to cut prices on goods they sell overseas and reduces the yen value of any profits they send back home.
Industrial robot maker Fanuc Corp slipped 0.9% to 18665 yen, while chip testing equipment maker Advantest Corp fell 1.9% to 1316 yen. Toyota Motor Corp, the world's biggest automaker, slid 0.2% to 6240 yen. Honda Motor Co, a carmaker that gets 84% of sales abroad, dropped 0.4% to 3525 yen. Air-conditioner maker Daikin Industries fell 1.2% to 6331 yen. Canon Inc, the world's biggest camera maker, lost 1.7% to 3420 yen. Sony Corp., which gets 72% of its sales abroad, dropped 1.7% to 1882.50 yen.
Screen Holdings fell 1.7% to 516 yen after the stock was cut to neutral from outperform by Credit Suisse. Japan Display dropped 5.3% to 451 yen after its rating was reduced to neutral at Mitsubishi UFJ Morgan Stanley.
The Cabinet Office said on Thursday that Japan machinery orders rose 4.7% in August from the previous month, on the top of July's 3.5% increase, data showed today. The upbeat data suggesting business investment may be steadily recovering after companies reined in spending following an April sales-tax increase.
Shanghai Composite rises 0.28%
Mainland China market closed volatile trading session at fresh 19-months high, on renewed hopes for stimulus measures after Premier Li Keqiang said the government will use targeted measures to support the economy. The benchmark Shanghai Composite index advanced 6.58 points, or 0.28%, to finish at 2389.37, the highest close since 20 February 2013, when it finished at 2397.18.
Chinese Premier Li Keqiang said at a State Council departmental meeting on Wednesday that the government will use the targeted measures to tackle financing costs and difficulties to support economic growth. The government plans to launch a series of investment projects by year-end in sectors including water, environmental protection and information technology, according to reports.
Shares of construction companies advanced on hopes that Beijing will approve more infrastructure construction projects to shore up economic growth. Power Construction Corp. of China hit its 10% upper limit at CNY3.53, Metallurgical Corp. of China rose 5.8% to CNY2.75 and China State Construction Engineering Corp. added 1.7% to CNY3.50.
Shares of Chinese materials and resources firms also gained in response to stronger metal prices overseas. Zijin Mining Group advanced 2.8% to CNY2.54, Chalco climbed 1.6% to CNY3.94 and Zhongjin Gold Corp. closed 1.5% higher at CNY8.67.
World Bank cut its 2014-2016 growth forecasts for China, due to policies aimed at putting the economy on a more sustainable footing. The Washington-based lender expects the China likely to slow to 7.4% in 2014 and 7.2% in 2015, down from 7.7% in 2013. Growth in 2016 was seen at 7.1%. The World Bank had previously seen China's growth coming in at 7.6% in 2014 and 7.5% in 2015 and 2016.
Hang Seng gains after strong U.S. lead
Hong Kong equity market finished the session sharply higher, on tracking a strong rebound on Wall Street overnight on the back of reassuring pledges by U.S. Federal Open Market Committee policy makers to keep interest rates near zero. The benchmark Hang Seng Index advanced 271.20 points, or 1.17% to close at 23534.53.
HK blue-chip stocks advanced across the board, with several index heavyweights posting solid gains. Shares of footwear retailer Belle International Holdings jumped 4.3% to HK$9.15, making it the top blue chip gainer. HKEx (00388) nudged up 0.2% to HK$173.8 after the Court of Appeal has upheld the London Metal Exchange's (LME) appeal.
Telecom shares were higher. China Mobile (00941) put on 3.3% to HK$94.95. China Unicom (00762) and China Telecom (00728) also added 2.6% and 0.4%.
Casino stocks bounced back, with Melco Crown Entertainment advancing 3.2% to HK$67.10, MGM China Holdings rising 1.6% to HK$22.85, and Galaxy Entertainment Group up 1.6% to HK$47.90.
Great Wall Motor (02333) shot up 4.4% to HK$31.7 as Credit Suisse raised its H2 monthly volume assumption from 6.5K to 10K. Tianhe Chem (01619) resumed trading and plunged 40% to HK$1.39 even it has issued a statement to clarify the negative reports from Anonymous Analytics.
Sihuan Pharmaceutical (00460) rose 1.5% to HK$6.19 on news that it plans to cooperate with the Academy of Military Medical Sciences to develop anti-Ebola drug.
Sensex hits more than two-week closing high
Indian stock market urged after minutes of the Federal Open Market Committee (FOMC) eased concerns of a rate-hike in near-term. The 30-share S&P BSE Sensex closed 1.49%, or 390.49 points, higher at 26,637.28, while the National Stock Exchange's broader barometer 50-share CNX Nifty ended up 1.50%, or 117.85 points, at 7,960.55.
Hindalco Industries rose 6.01% to Rs.157.75 on hopes of strong quarterly results, after its global rival Alcoa Inc. posted better-than expected earnings in the September quarter. Bharat Heavy Electricals (Bhel) soared 8.37% to Rs.218.85 after it bagged Rs.7800 crore orders to set up a thermal power unit.
The International Monetary Fund (IMF) on Tuesday raised its medium-term assessment of the Indian economy, ignoring the setback of a deficient monsoon, arguing that the political stability arising from having a party with a clear majority in Parliament in charge will provide a launch-pad for long-overdue structural reforms. The fund, in its biannual World Economic Outlook (WEO), raised its growth projection for India to 5.6% for 2014-15 from 5.4% projected a little over six months ago. For 2015-16, the fund stuck to its April growth projection of 6.4%. The World Bank has the same growth projections for India for the two financial years.
Elsewhere in the Asia Pacific region-- Taiwan's Taiex index gained 0.13% to 8966.44. Indonesia's Jakarta Composite index grew 0.7% to 4993.88. Singapore's Straits Times index added 1% at 3259.25. Malaysia's KLCI rose 0.3% to 1829.73. New Zealand's NZX50 gained 0.4% to 5266.04. South Korea market closed for holiday.
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