Regional stocks trimmed gain late afternoon after comments by U.S. Federal Reserve officials suggested the central bank could raise interest rates as early as next month.
Remarks from regional Fed presidents Jeffrey Lacker of Richmond, Va., James Bullard of St. Louis and John Williams of San Francisco signalled that many central-bank objectives had been met and that Thursday's on-hold decision was a close call.
Federal Reserve Bank of Atlanta president Dennis Lockhart, a characteristically dovish Fed official, said at a speech he put the decision of the Fed last week to keep rates at near zero on "prudent risk management around recent and current market volatility". Mr Lockhart said while that volatility raised risks to the US economic and inflation outlook, he said "I am confident the much-used phrase 'later this year' is still operative". His comments echoed those of other Fed officials over the past days since the Fed surprised markets late last week with keeping rates on hold and striking a dovish tone in the explanation of its decision, citing worries about the global economy as a reason for inaction.
Investors are looking to a reading on Chinese manufacturing activity for September due Wednesday from Caixin Media Co. and research firm Markit. The August reading was the lowest in more than six years.
In the latest sign of headwinds hitting the Chinese economy, U.S. credit-rating firm Standard & Poor's Ratings Services said China's banks face growing risk tied to rising bad loans and problems in its real-estate sector. S&P on Monday said it revised its assessment of the economic risks facing China's banking industry to negative from stable. The industry is one of Beijing's major levers as it tries to lift the world's second-largest economy out of its growth slowdown.
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Among Asian bourses
Australia market rises on bargain buying
The Australian share market recovered a part of yesterday's losses, as investors chased for bottom fishing on heavily battered stocks. All but one ASX sectors ended higher, with energy, telecom industrial, utilities and consumer staples issues being major gainers. The benchmark S&P/ASX 200 index and the broader All Ordinaries index both climbed 0.7% to end at 5103.60 points and 5130.80 points, respectively.
Energy stocks were the gainer on the benchmark index, after crude oil prices had surged 4.5% overnight on signs that low prices are starting to impact drilling activity and curb the pace of oil production in the U.S. Among energy shares, Woodside Petroleum advanced 2.8% to A$29.65 and Papua New Guinea-focused takeover target Oil Search rallied 4.3% to A$7.80. Origin Energy was up 1% to A$6.86 and Santos gained 4.4% to A$4.99.
Banks and financial stocks were also higher. Among top lenders, Westpac Bank added 0.8% to A$31.11, Australia & New Zealand Banking Group 0.4% to A$27.83, National Australia Bank 0.1% to A$30.51, and Commonwealth Bank 0.2% to A$73.80.
Materials and resources stocks were down, on caution ahead of a reading on Chinese manufacturing later today. Among top miners, mining heavy weights BHP Billiton finished slightly higher, up 0.04% to A$23.86, thanks to its oil exposure, but Rio Tinto fell 1.2% to A$49.19 and Fortescue Metals Group lost 3% to A$1.915. Gold miners also suffered, with Newcrest Mining down by 3% to A$12.15.
Woolworths shares jumped 1.2% to A$24.79 after the supermarket operator yesterday revealed a plan to spend A$65 million over the next year fixing trolleys, patching holes in shop floors, and improving lighting and signs. The supermarket plans to boost man hours by the equivalent of three extra full-time staff in each of its 950 stores in an effort to improving on-shelf availability, especially in fruit and vegetables and at checkouts.
PAS Group shares have shot up to A$0.64, up 23% from Monday's close at A$0.52, after announcing that it had received an unconditional offer from a subsidiary of Coliseum to buy all of its shares on market at a price of A$0.63 apiece. Coliseum already has control of a 19.2% stake in the Melbourne-based company.
The average price of houses across Australia's capital cities rose by 4.7% in the second quarter from the first, the Bureau of Statistics said on Tuesday. House prices rose by 9.8% compared with the same quarter a year earlier. In the first quarter, house prices rose by only 1.6%, on average, from the previous quarter.
China market gains on small-cap shares demand
The Mainland China's stock market advanced for third consecutive session as optimism grows over President Xi Jinping's state visit to the US. Most of the SSE sectors advanced, led by brokerages on prospects of an exchange link between London and Shanghai. But, market gains was limited as investors cautiously awaiting for China's flash factory activity survey later today for clues on whether the economy is deteriorating more rapidly than earlier thought. The Shanghai Composite Index climbed up 0.92%, or 29.08 points, to 3185.62 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.71%, or 12.27 points, to 1750.91. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, was marginally down 0.02%, or 0.34 point, to close at 2078.72.
Shares of brokerages rallied sharply today in Beijing on prospects of an exchange link between London and Shanghai after British officials remarks they will study the feasibility of setting up a London-Shanghai stock trading link. Shanxi Securities Co. and Western Securities Co. locked at 10% upper circuit, meanwhile Orient Securities, Huatai Securities and Founder Securities climbed more than 4% each.
China's economy is expected to grow 6.9% this year, largely in line with the official target of around 7%, an annual report by the Chinese Academy of Social Sciences said yesterday. The think tank cited an inefficient relocation of capital and the holding back of fiscal spending as factors behind the slowdown from last year's pace of 7.3%.
Hong Kong market holds gain
Hong Kong stock market ended slightly higher after trimming intraday gain late afternoon. The benchmark Hang Seng Index (HSI) opened up 37 points and widened its gains to 350 points at one stage as Fed officials tried to soothe fears over the world economy and investors expected good news from Chinese President Xi Jinping's state visit to US. But it pared nearly all of its gains by market close ahead of a reading on Chinese manufacturing activity for September due later today. The Hang Seng Index added 39.65 points, or 0.18%, at 21796.58 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, lost 63.98 points, or 0.65%, to 9835.39 points. Turnover increased slightly to HK$74.4 billion from HK$70.2 billion on Monday.
Shares of telecom operators were biggest gainers in the Hong Kong market, led by China Mobile (00941), up 4% to HK$96.95, after Credit Suisse expects its service revenue growth to accelerate in 3Q. China Telecom (00728) gained 1% to HK$3.95. China Unicom (00762) rose 1.8% to HK$10.24 after the telecom carrier issued CUBE-Net white paper. It expects its 4G base stations to hit 500,000 by year-end, while mobile network base stations reach 1.6 million.
Li & Fung (00494) soared 10.4% to HK$5.62 after BofAML upgraded its rating for the stock to "buy", with a higher target price of HK$7.
ANZ-Roy Morgan Hong Kong Consumer Confidence fell to 134 (down 4.2pts from a record high of 138.2 in August) in September, according to the compilers. The fall in ANZ-Roy Morgan Hong Kong Consumer Confidence in September was driven mainly by less confidence about family financial situations over the past year and in the next year.
Sensex tumbles to one-week low
Selling intensified in mid-afternoon trade as a setback for European stocks and fall in US index futures weighed on Indian stocks. At 14:16 IST, the Sensex was down 422.90 points or 1.61% at 25,770.08. The Nifty was down 134.25 points or 1.68% at 7,842.85.
SpiceJet and Jet Airways India gained after the data published by directorate general of civil aviation (DGCA) showed that SpiceJet had a domestic market share of 12.3% in August, while Jet Airways had a share of 22.8%.
Reliance Industries declined after the Mukesh Ambani-led Reliance Industries (RIL) has received a setback with the government clarifying that the prevailing natural gas prices will apply to coal bed methane (CBM) producers as well. This means RIL will have to settle for one-third of the $12 per mmBtu (million British thermal unit) it had sought for gas set to be generated from next month at its Madhya Pradesh CBM blocks
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.7% to 8365. South Korea's KOPSI jumped 0.9% to 1982. New Zealand's NZX50 grew 0.2% to 5696. Singapore's Straits Times index fell 0.5% at 2868. Indonesia's Jakarta Composite index sank 0.7% to 4344. Malaysia's KLCI declined 0.7% to 1628. Japan stock market closed on Tuesday for Holiday
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