Asia Pacific Market: Stocks jump on optimism over the US economy
Investor risk sentiment underpinned amid optimism the US economy is emerging from a worse-than-estimated contraction last quarter. Meanwhile buying pressure accelerated on expectations that the U.S. would delay raising interest rates after weak first-quarter growth in the world's largest economy.
US gross domestic product fell at a 2.9% annual pace in the first three months of 2014, much worse than the previous estimate of 1.0% and the sharpest decline in five years. The drop reflected weaker growth in consumer spending, a larger increase in exports and higher imports than previous estimates. Analysts said the market essentially saw beyond the report, regarding it as backward-looking as more recent data shows growth already appears and picking up.
Among Asian bourses
Australia market rises 1.2%
Australian share market rose for the first time in three consecutive days, thanks to window dressing ahead of the end of the financial year, coupled with a strong lead from Wall Street overnight. All ASX sectors ascended, with shares of consumer discretionary, consumer staples financials, property trusts, and materials counters leading advance. The benchmark S&P/ASX200 added 1.15% to 5464.30 and the broader All Ordinaries grew 1.11% to 5446.80.
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Sydney shares opened higher on tracking a strong lead from Wall Street overnight, which rose despite a large downward revision in GDP growth over the first quarter. Meanwhile, lift in the iron ore price and a better than expected local jobs report helped the market extend early gains. Further window dressing from investors and funds and gain on the major Asian markets also provided positive cues in the afternoon session.
Consumer discretionary spending was the best-performing sector, up 1.8%, boosted by a lift in gambling stocks ahead of a Supreme Court of Victoria decision expected after the market close with regard to state government compensation over cancelled licenses. Tatts Group, which is seeking A$590 million, jumped 4.4% to A$3.12. Tabcorp Holdings, which is seeking A$750 million, lifted 6.2% to A$3.60.
Financial stocks closed higher, with major four lenders leading rally after official data showed Australian household wealth posted the biggest quarterly rise in four years during the three months to March, while the job market improved in the three months to May. Commonwealth Bank of Australia rose 1.3% to A$82.06, Westpac Banking Corp 1.8% to A$34.43, ANZ Banking Group 1.4% to A$33.90 and National Australia Bank 1.3% to A$33.24.
Shares of material and resources companies climbed up on the back of rebound in the iron ore price. the spot price for iron ore, delivered in China, lifted 0.4% to $US93.70 a tonne on Wednesday. At the ASX closed on Thursday, Dalian iron ore futures trading in China was tipping a strong rise overnight. Resources giant BHP Billiton added 0.8% to A$36.50 and Rio Tinto rose 1.4% to A$59.90, while iron ore miner Fortescue Metals Group was up 2.5% to A$4.47.
Telstra Corporation lifted 1.2% to A$5.23 as the telecommunications company unveiled a new A$150 million deal with the National Broadband Corporation.
Nikkei bounces 0.27%
Japan share market clawed back parts of yesterday's losses, as investors chased for bargain hunting on tracking positive cues from Wall Street overnight. However, the market rise was hindered by a flagging dollar against the yen, after a downward revision of the US first-quarter economic growth. The benchmark Nikkei 225 index gained 0.27% to 15308.49 following a 0.71% decline the previous day. The Topix index of all first-section issues advanced 0.21% to 1263.43.
As of the close of TSE trading, the dollar was changing hands at 101.74 yen, marginally down from 101.86 yen in New York on Wednesday.
The e-commerce titan Rakuten Inc added 2.9% to 1309 yen after media reports that the firm's top executives, along with those of Malaysia's AirAsia Bhd., will hold a news conference in Tokyo on July 1 to announce a tie-up in the Japanese low-cost carrier market. The Nikkei reported that Rakuten's Hiroshi Mikitani and AirAsia's Tony Fernandes will announce plans to start operations next year.
Web portal operator Yahoo Japan gained 0.9% to 471 yen following an announcement that it and the SoftBank group will invest in a spinoff from credit-card company KC Card, a subsidiary of midsize nonbank financial institution J Trust. The move marks Yahoo Japan's entry into the credit-card business.
Fujitsu ended up 3.7% to 765 yen renewing its 2014 high, after an MUFJ Morgan Stanley Securities target price hike to Y850 from Y770, citing profitability in the company's April and May cellphone handsets, as well as strong IT service orders.
China stocks jump on successful debuts of three new listings
Mainland China share market closed higher, clawing back more than yesterday's losses, supported by huge interest in the debut of three new listings following a four-month hiatus. The benchmark Shanghai Composite closed 0.65% higher from prior day to 2038.68. Trading turnover increased to 66.53 billion yuan from yesterday's 55.99 billion yuan.
Three Chinese stocks that started trading Thursday rose sharply higher in their debut, as a four-month hiatus in new listings and cheap pricing lured investors into an otherwise depressed market.
Shandong Longda Meat Foodstuff Co closed 44.02% higher at 14.10 yuan, while Xuelang Environmental Technology rose 43.99% to 21.21 yuan and Feitian Technologies gained 44.01% to 47.71 yuan. The shares of a meat producer, a refuse-treatment equipment maker and a security-technology firm each gained by 10% or more in the opening minutes of trading, triggering a 30-minute suspension required by regulators after such sudden moves.
Brokerage stocks gained on hopes more active trading would boost their business. In Shanghai Industrial Securities rose 2.96% to 8.36 yuan and CITIC Securities gained 1.15% to 11.40 yuan, while Shenzhen-listed Changjiang Securities moved up 1.93% to 9.51 yuan.
Hong Kong market jumps 1.45%
Hong Kong share market closed sharp higher, on tracking gains on Wall Street overnight, with investors moving in for bargains following the previous day's sell-off and ahead of future contract settlement tomorrow. The benchmark Hang Seng Index closed 331.13 points higher from prior day to 23197.83. Trading turnover increased to HK$52.6 billion from yesterday's HK$43.97 billion.
Casino operators advanced on the denial that electronic payment devices are banned from July. Macau's finance secretary commented on payment card devices used by jewelry and watch retailers within gaming houses. While the vendors won't be allowed to add terminals from July, they won't be shut down, Francis Tam said. Sands China jumped 4% to HK$57.20, while Galaxy climbed 3.7% to HK$59.50. Wynn Macau (01128) soared 5.5% to HK$29.6.
Oil and banking segments were also upbeat. Sinopec (00386) and PetroChina (00857) rose 2.5% to HK$7.38 and HK$9.82. ICBC (01398) ascended 1.9% to HK$4.9.
Internet players were also pushed higher. Tencent (00700) put on 2.9% to HK$118.4. Kingsoft (03888) and Sinosoft (01297) rose 3.5% and 4.5% to HK$23.4 and HK$2.76.
Luk Fook gained 4.1% to HK$23.10. The jeweler said full-year profit rose 50% to HK$1.86 billion ($240 million), beating the HK$1.56 billion estimate by analysts. Same-store sales growth surged 25% from a year earlier.
Want Want climbed 5.3% to HK$10.66. The company was rated a new buy at Daiwa, which said snack sales growth in China will top soft drinks in the next three years.
China Gas Holdings, jumped 6.9% to HK$14.84. The company said yesterday after the close that it plans increase sales threefold by the end of the decade as Russian natural gas flows to the nation following a historic accord signed in May.
Data from the Census and Statistics Department showed that Hong Kong's value of total exports of goods (comprising re-exports and domestic exports) rose 4.9% in May over a year earlier to HK$306 billion, after a year-on-year decrease of 1.6% in April. Within this total, the value of re-exports grew 4.9% HK$300.7 billion in May, while the value of domestic exports rose 10% to HK$5.3 billion. Concurrently, the value of imports of goods rose 3.7% over a year earlier to HK$348.3 billion in May, after a year-on-year increase of 2.4% in April. A visible trade deficit of HK$42.4 billion, equivalent to 12.2% of the value of imports of goods, was recorded last month.
Sensex ends lower ahead of F&O expiry
Indian stock market closed sharp lower today, after the government deferred a decision to hike prices of locally produced gas, while the expiry of monthly derivatives contracts also weighed on sentiment. The benchmark ended 0.99% lower at 25,062.67 points, while the broader Nifty closed 1% lower at 7,493.20 points.
Oil and gas stocks led the fall with the BSE oil and gas index down 3.88% after the government decision to defer a gas price hike. India on Wednesday deferred a decision to raise prices of locally produced gas for the next three months, saying the matter requires more discussion, which some investors took as a first disappointment from the newly-elected Modi government. Shares in ONGC fell 5.84%, while Reliance Industries plunged 3.72%. Oil India Ltd closed down 2.8%, while Cairn India Ltd ended 1.35% lower.
Capital goods and auto stocks gained after the government extended excise duty concessions for automobiles, consumer and capital goods by six months to Dec. 31. L&T gained 1.42% while Bharat Heavy Electricals Ltd closed 0.54% higher.
Coal India was down 2.07% to Rs 389.45. The stock edged lower in late trade after a news agency quoted Sangita Chourre, joint secretary in the department of disinvestment in finance ministry, as saying that stake sale in Coal India is in "action plan".
Dewan Housing Finance Corporation jumped 7.81% to Rs 362 after the company said that credit rating agency Credit Analysis & Research (CARE) has up-graded the ratings assigned to the long term bank facilities and other instruments/securities of the company.
Elsewhere in the Asia Pacific region- Taiwan's Taiex index was up 0.85% to 9320.94. South Korea's KOSPI index was up 0.67% to 1995.05. Indonesia's Jakarta Composite Index rose 0.69% to 4872.42. Malaysia's KLSE Composite climbed up 0.02% to1889.97. New Zealand's NZX50 jumped 0.5% to 5130.15. Singapore's Straits Times index rose 0.52% to 3278.57.
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First Published: Jun 26 2014 | 5:00 PM IST