Asia Pacific Market: Stocks jump on China, Europe stimulus hopes

Asia Pacific share market advanced on Monday, 01 September 2014, as expectations of new monetary largesse in Europe and speculation the Chinese government will accelerate stimulus after drop in China manufacturing growth for August. The MSCI Asia Pacific Index added 0.2% to 148.20.

China's manufacturing growth decelerated in August due to weaker global demand and a slowdown in domestic investment, according to two separate surveys data released on Monday. HSBC Corp.'s purchasing managers index fell to 50.2 in August from July's 18-month high of 51.7 on a 100-point scale on which numbers above 50 show an expansion. An official industry group, the China Federation of Logistics and Purchasing said its separate PMI declined to 51.1 in August from 51.7 in July.

 

China's manufacturing PMI reports follow weaker-than-expected credit, production and investment data for July, suggesting the economy is losing momentum and adding to pressure on the government to step up efforts to meet its expansion target this year.

China's economic growth edged up to 7.5% in the three months ended June 30 from the previous quarter's 7.4%. But that was supported by higher government spending on building railways and other public works. Market pundits were expecting without further government support, China economic growth is likely to decline.

Market participants were awaiting for this week's ECB meeting. Investors are expecting a strong move from the ECB because Draghi said he will do something to help growth. French Prime Minister Manuel Valls yesterday urged the ECB to take more action to weaken the euro.

Among Asia bourses

Yen depreciation boosts Nikkei to 0.34% up

Japanese share market closed higher, as yen depreciation against basket of major currencies bolstered buying in export related stocks. Market gain was, however, limited due to less than estimated Japan's capital spending data for the second quarter and growth slowdown in Chinese manufacturing data. The benchmark Nikkei 225 index added 0.34%, or 52.01 points, to finish at 15,476.60, while the Topix index of all first-section shares climbed 0.40%, or 5.09 points, to 1,283.06.

Capital spending increased 3% in the second quarter from a year earlier, the Ministry of Finance data showed, slowing from a 7.4% pace in the three months before Japan raised its consumption tax on April 1.

Exporter shares closed mostly higher after Japanese yen extended declines. The yen slipped 0.1% to 104.17 per dollar after falling 0.4% on Aug. 29. A weaker yen is better for exporters, as it inflating the value of their earnings abroad in yen terms and enabling them to price their goods more competitively overseas. Tokyo Electron jumped 1.3% to 7223 yen, TDK Corp gained 1% to 5230 yen and Advantest Corp rose 2.1% to 1233 yen. Toyota Motor Corp added 0.5% to 5956 yen. Sony Corp jumped 1.3% to 2015 yen. Nikon Corp., the world's No. 2 camera maker, rose 0.1% to 1512 yen.

Shares of pachinko-related stocks plunged after industry magazine Yugi Nippon reported on tougher industry regulations. Sega Sammy Holdings Inc. plunged 8.8% to 1,808 yen despite pachinko machine maker narrowing its first-half loss forecast to 1.5 billion yen from 7 billion yen. Universal Entertainment Corp., gaming machines maker, declined 6.4% to 1,734 yen.

CyberAgent jumped 4.2% to 3,710 yen after the Internet Company said it will move on Sept. 5 its shares to the TSE's first section from the TSE's Mothers market for start-up companies.

Shares of manufacturing & engineering firm Hitachi Zosen soared 13% to 574 yen after the company's rating was raised to buy from neutral at Mizuho Securities. The brokerage also raised its target price to Y730 from Y540, citing a healthy order book for its mainstay plant-building operations.

All Ordinaries ends higher

Australian share market closed higher on first day of the week, amid expectations that interest rates will stay low for longer. But gain was marginal due to absence of any major corporate news and growth slowdown in Chinese manufacturing data. The benchmark S&P/ASX 200 Index closed 3.90 points higher at 5629.80 and the broader All Ordinaries Index gained 4.70 points to 5629.30.

The financial stocks closed mixed on caution ahead of the Reserve Bank of Australia's monthly board meeting on Tuesday. Commonwealth Bank of Australia fell 0.02% to A$81.30 and National Australia Bank shed 0.2% to A$35.12. Westpac Banking Corp rose 0.3% to A$35.14. ANZ Banking Group shares closed steady at A$33.43.

Materials and resources stocks were mostly up as Chinese figures appeared to have had limited impact on major miners. Resources giant BHP Billiton rose 0.1% to A$36.70 while main rival Rio Tinto gained 0.3% at A$62.80. Junior iron ore miner Fortescue Metals fell 1.9% to A$4.09.

Westfield's shopping centre landlord, Scentre Group jumped 1.8% to A$3.49, following reports it was in talks to sell half of its New Zealand portfolio, which is worth about A$2.6 billion.

Shanghai Composite jumps on stimulus hopes

Mainland China share market advanced amid growing speculation policy maker would come-up with further stimulus measures after two surveys showed that China's manufacturing growth decelerated in August. The benchmark Shanghai Composite advanced 18.31 points, or 0.83%, to 2235.51 at the close.

Shares of military linked stocks jumped after the Shanghai Securities News reports China will announce detailed rules for restructuring military research institutes in October, with about 16 listed companies are expected to be injected with military research institutes' assets. Beijing Aerospace surged 7.3%, while China Avic climbed 4.9%, adding to a 10% jump on Aug. 29.

Shares of technology and automobile companies also rallied. Shenzhen O-film Tech Co. surged 10%. Chongqing Changan Automobile Co, the partner of Ford Motor Co. and Mazda Motor Corp., gained 1.7% after first-half profit jumped 195% from a year earlier. SAIC Motor Corp., the biggest-listed automaker, gained 1.4%.

PetroChina Co shares rose 0.3% to 7.91 yuan after the country's top oil and gas producer posted a 15% rise in second-quarter profit, partly due to higher upstream earnings and improved refining margins. Second-quarter net profit rose to 33.9 billion yuan (US$5.5 billion) in the April-June period from 29.5 billion yuan a year earlier, according to calculations based on PetroChina's first-half results. PetroChina said it expected oversupply to persist in the domestic oil product market in the second half of the year and forecast oil prices would be volatile.

Hang Seng ends little higher

Hong Kong share market closed little higher after swinging between gains and losses, as lower-than-expected manufacturing data from China fueled stimulus bets. The Hang Seng Index ended up 10.03 points, or 0.04%, to 24752.09. Market turnover reduced to HK$61.88 billion from HK$67.6 billion on Friday.

Shares of utilities were stronger today. Power Assets (00006) rose 2.8% to HK$72.6. CLP (00002) put on 1.1% to HK$66.3. HK & China Gas (00003) edged up 0.5% to HK$17.66.

Shares of casino operators declined after the city's Gaming Inspection and Coordination Bureau said that Macau's casino gross gaming revenues declined 6% from a year earlier to 28.9 billion patacas ($3.62 billion) in August. Sands China slid 3.2% to HK$48.90, falling for consecutive ninth day. Galaxy Entertainment Group retreated 2.9% to HK$56.70.

Lenovo Group shares climbed up 3.6% to HK$12.26, a 14-year high, after Credit Suisse Group AG named it as one of the stocks that will benefit from cross-border trading.

Dongfeng Motor Group Co. advanced 1.4% to HK$14.56 after the mainland automaker reported higher first-half profit. Dongfeng Motor (00489) said its profit rose 53.6% year-on-year to 8,506 million yuan for the six months ended 30 June 2014. The revenue was 30949 million yuan, an increase of 217.4% from a year earlier.

Sensex hits new peak

Indian stock market closed at record high today, on the back of positive economic growth data for the April-June quarter and after news reports filtered in that the Attorney General proposed to the Supreme Court that about 40 of the 218 coal mines it declared illegal should not be taken back from the companies that operate them as they were either producing or were close to producing.. The 30-share BSE index Sensex surged 229.44 points to end at 26,867.55 and the 50-share NSE index Nifty gained 73.35 points to close at 8,027.70.

India's gross domestic product (GDP) grew 5.7% in Q1 June 2014, its fastest pace of growth in two-and-half years. The GDP growth has shown sharp improvement from 4.6% in Q4 March 2014 and 4.7% in Q1 June 2013. The Central Statistical Office (CSO) released quarterly estimates of India's GDP on Friday, 29 August 2014, when Indian financial markets were closed for a holiday. The improvement in the GDP growth was facilitated by rebound in industrial sector growth after two sequential quarters of decline. More importantly, the GDP data showed that domestic investment demand has exhibited strong growth of 7% in Q1 June 2014.

Markit Economics said today, 1 September 2014, that the seasonally adjusted HSBC India Purchasing Managers' Index (PMI)-a figure designed to give an accurate overview of business conditions in the manufacturing sector -dipped slightly from July's 17-month high of 53 to 52.4 in August.

Elsewhere in the Asia Pacific region-- South Korea's KOSPI index fell 0.03% to 2067.86. Taiwan's Taiex index added 0.81% to 9513.06. New Zealand's NZX50 sank 0.15% to 5215.40. Singapore's Straits Times index declined 0.34% to 3330.22. Indonesia's Jakarta Composite index rose 0.79% to 5177.62.

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