The gain in regional market came as investors chased for bottom fishing on tracking rally on the Chinese bourses. The China's Shanghai Composite resumed trading today after the National Week public holiday, with the index last up 1.1%, after the latest data showed China's services industry continued to expand.
HSBC China Composite PMI data signaled a further expansion of output in September. Output growth has now been recorded for two successive months, according to Markit. The rate of expansion remained modest, despite having eased since August, with the HSBC China Composite Output Index posting at 51.2 in September, down from 51.8 in August, the global financial information services company said. Output levels increased across both the manufacturing and service sectors during September. That said the rate of expansion eased to only a fractional pace at manufacturers, and growth also slowed at service providers. Furthermore, growth in services activity remained substantially below trend. Overall, the HSBC China Services Business Activity Index signalled a moderate rate of increase, posting at 52.4 in September, down from 52.8 in August, Markit added. China's services activity growth appears to be stabilising at a faster pace than in 2Q. This led to a renewed expansion of employment from the contraction in August. Combined with the gradual improvement of the manufacturing PMI, the Chinese economy is still on the way to a modest recovery. But a more consolidated and sustainable recovery requires structural reforms. said Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC.
However, gains on the upside were limited as investors hesitant to take aggressive positions because of the political wrangling in the U.S. risk sentiments remain weak as the partial U.S. government closure is in its seventh day with still no end in sight and amid on-going uncertainty about political impasse over the debt ceiling hike.
The U.S. was forced to curtail government operations last week after a politically divided Congress failed to approve a short-term funding measure to allow the nation to pay its bills past the end of its fiscal year on Sept. 30. As a result, 800,000 federal workers were furloughed and scores of nonessential services were halted.
Now, Congress faces another deadline that could prove highly damaging to the U.S. economy if missed. The nation's debt ceiling, also known as its borrowing limit, must legally be raised before Oct. 17. The U.S. Treasury estimates it will have $30 billion of cash on hand on that day, but the money will be exhausted quickly government bills can run as high as $60 billion on a single day.
In the latest development, U.S. President Barack Obama yesterday reiterated that he would not consider conditions for a debt limit increase. He stated that the government would not negotiate under the threat of economic catastrophe. Meanwhile, Republican House speaker Boehner stressed that he would not pass a clean debt limit as the votes are not in the House to pass a clean debt limit. Both parties, however, reiterated that they do not expect a default. Regarding this, Treasury Secretary Lew warned that the House is playing with fire as failure to raise the US debt limit means credit markets could freeze, the value of the dollar could plummet, US interest rates could skyrocket.
From an economic stand point, the Federal Reserve Bank of San Francisco President John Williams said that a 2-week Government halt would shave 0.25 percentage points off Q4 GDP growth.
Among Asian bourses, the Japanese market rose for the first time in five straight sessions, sending the benchmark Nikkei Stock Average 41.29 points higher from prior day closure to 13894.61. The rebound in the Tokyo market came as investors chased for bargain buying on the back of yen depreciation against the greenback and on tracking positive showing of the Chinese bourses.
The dollar was last at Y97.14, compared to Y96.71 late Monday in New York, and making a mild recovery from a 0.8% fall in the previous session.
Fuji Heavy Industries rose 2.25% to 2732 yen after a Nikkei report said that the company will develop a hybrid sport-utility vehicle with Toyota
Sharp Corp declined 0.3% to 290 yen due to dilution concerns after the company said on Monday that it is setting its new share-offering price at 279 yen a share, which would allow the company to raise as much as 136.6 billion yen, around 30 billion yen less than originally expected.
In Australia, shares in the Australian market closed lower, with bullion, energy, realty and resources heavyweights were leading the losses. The benchmark S&P/ASX200 index was down 0.23% to finish at 5149.40, extending yesterday's 0.9% drop.
The decline in Australian market came in spite of upbeat NAB's business confidence data for September, as traders awaited for news on the US budget and debt ceiling negotiation.
Shares of precious-metal miners were biggest drag on the ASX as wave of profit taking from investors. Among Gold stocks, Newcrest Mining dropped by 2.3% to A$10.83.
Shares of energy sector were second worst performer in the ASX, with Santos down by 0.54% to A$14.86, Oil Search down by 0.6% to A$8.29, Origin Energy down by 0.8% to A$14.10, and Woodside Petroleum down by 0.8% to A$37.27.
Shares of Linc Energy (LNC) had fallen 3% to A$1.14 after the energy company announced plans last week to delist from the ASX and list on the Singapore exchange. It means that any investor in Australia wanting to hold their shares would have to get an international account, hence the selling.
Australian business confidence surged by 17 points from -5 in August to +12 in September, a highest level since March 2010, according to the confidence gauge measured by the National Australia Bank business survey, released on Tuesday. Business conditions were moderately up in September but, at -4 points, remained relatively low.
In China, Chinese share market resumed trading after the National Week public holiday, sending the Shanghai Composite index 1.1% higher to finish at 2198.20 on Tuesday, October 08, 2013, with shares of retailers and property developers leading rally on increased sales during week long holiday.
Shares of telecom companies rose the most in the SSE sectoral pack after statement from the National Development and Reform Commission's indicated China will aim to nurture large and key mobile internet companies related to the 4G industry. ZTE Corp, China's second-biggest phone-equipment maker, advanced 9% to 18.09 yuan. China United, which controls the nation's second-largest cell phone operator, locked 10% upper circuit at 3.61 yuan. Neusoft Corp. jumped by the 10% daily limit to 14.17 yuan after the company said it expected to win a computer information system qualification from the Ministry of Industry and Information Technology.
Shares of consumer-discretionary companies climbed up sharply after the Commerce Ministry data showed China's retail and catering combined sales grew 13.6% during the holiday from a year earlier to 870 billion yuan ($142 billion). Beijing Wangfujing, which operates department stores in the capital, surged 2.8% to 21.94 yuan. Suning Commerce Group Co, the retail-chain operator, jumped 0.6% to 12.93 yuan.
Shares of realty developers went higher after China Securities Journal stated that Beijing's new home sales from Oct. 1-6 almost doubled from a year earlier. China Vanke Co., the nation's biggest, added 4.6% to 9.55 yuan. Poly Real Estate Group Co, China's second-largest developer by market value, jumped 5.1% to 10.38 yuan.
Shares of environmental related companies climbed up on expectations that government would launch measures to improve pollution after severe smog in Beijing over the weekend. Xiamen Savings Environmental Co, which makes filtration products, added 4.7% to 18.97 yuan and waste-water-treatment firm Sound Environmental Resources Co jumped 7.32% to 36.22 yuan.
In Hong Kong, headline shares of the Hong Kong market rose, with the benchmark Hang Seng index rising 204 points to 23,178.
Among the 50 HK blue chips, 41 rose and nine fell. Belle (01880) rebounded 5% to HK$11.72 on strong sales over the Golden week holidays, while Li & Fung (00494) fell 1.8% to HK$11, making themselves the top blue-chip gainer and loser.
Shares of realty companies were major gainers in HK, with Country Garden ending 7.98% higher today after saying that it achieved full-year contract-sales target before October. Evergrande Real Estate shares climbed up 4.9% to HK$3.61 after the developer reported its contracted sales for September amounted to about Rmb10.53 billion, with a contracted sales area of about 1.56 million square metres, an increase of 29.6% and 7% over the same period in 2012.
In India, Indian benchmark indices closed higher, led by gains in rate sensitive banks, realty, capital goods and autos after the Reserve Bank of India reduced the rate under the marginal standing facility (MSF) by 50 basis points to 9% and introduced lending to banks for seven days and 14 days, instead of the current practice of just a day. The market sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 7 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 494.13 crore of Indian shares on Monday, 7 October 2013, as per provisional data from the stock exchanges. The 30-share index provisionally closed at 29983.61, up 88.51 points or 0.44%.
Elsewhere in the region, New Zealand's NZX50 fell 0.37%. South Korea's Kospi rose 0.42%. Taiwan's Taiex added 0.5%. Indonesia's JKSE Composite advanced 1.32%. Singapore's Straits Times Index jumped 0.32%. Malaysia's KLSE Composite eked out 0.04% gain.
Powered by Capital Market - Live News
