Asia Pacific share market advanced on Friday, 27 May 2016, as risk sentiments underpinned after crude oil hit $50 a barrel for the first time this year and as G-7 leaders pledged that they will take all possible policy measures to prevent the global economy from falling into another crisis. But the market's topside was limited as a wait-and-see mood strengthened before U.S. Federal Reserve Chair Janet Yellen speaks at a Harvard University event later on Friday. Investors are closely watching her views on an additional interest rate hike by the Fed.
Investors took heart from the fact that the G-7 countries highlighted in the statement the importance of implementing fiscal strategies flexibly and structural reform decisively. In a statement following a two-day summit in the Japanese resort of Ise-Shima, the world's seven leading industrial nations pledged to "collectively tackle" major risks to global growth and committed to a cooperative approach in beefing up policies to stimulate their sluggish economies. "Global growth remains moderate and below potential, while risks of weak growth persist," the G7 leaders said in a declaration on Friday. "Taking into account country-specific circumstances, we commit to strengthening our economic policy responses in a cooperative manner and to employing a more forceful and balanced policy mix, in order to swiftly achieve a strong, sustainable and balanced growth pattern," the G7 statement said.
Among Asian bourses
Australia Market hits 9-month closing high
Australian share market finished the session higher, spurred by the big banks and healthcare stocks. At close of trade, the benchmark S&P/ASX 200 index inclined 17.80 points, or 0.33%, to 5405.90. The broader All Ordinaries added 17.80 points, or 0.33%, to 5469.70. The gains put the market up 1% for the week, the highest close since August last year. Rising stocks outnumbered declining ones on the Australia Stock Exchange by 550 to 442 and 335 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was down 3.72% to 16.151 a new 1-month low.
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Shares of energy players continued uptrend inline with rise crude oil prices, with Oil Search up 1.8% to A$6.83, Santos up 0.7% to A$4.52 and Woodside up 0.4% to A$27.83.
Shares of banks and financial companies also added weight, with Commonwealth Bank up 0.4% to A$78.90, ANZ Banking Group up 1.2% to A$25.85, and Westpac Banking Corp up 0.8% to A$30.98, while National Australia Bank fell 0.2% to A$27.30.
Materials and resources stocks ended lower. Global miner BHP Billiton declined 0.2% to A$19.37 and Rio Tinto shed 1.4% to A$44.83. Pure-play iron ore producer Fortescue Metals rose 2% to A$3.02 as Macquarie Bank analysts declared buying potential in iron-ore stocks.
Australian Dairy Farms Group jumped 20.6% to A$0.205 after saying milk-price pain would ease in the next financial year as the company accelerated its diversification push.
Aristocrat closed up 1.9% to A$12.69 after Thursday announcing a doubling of half year profit to A$159.1 million.
Japan Stocks rise on policy stimulus, delay in sales tax hike hopes
The Japan share market ended higher, helped by hopes for economy-boosting policy measures following a joint statement from leaders of the Group of Seven major industrial countries. Meanwhile, buying momentum received further boost from renewed hopes of extra central bank stimulus measures after official figures showed Core consumer monthly prices falling and press reports that the government would delay a sales tax hike. But gains were limited ahead of a long-holiday weekend in the U.S. with comments from Fed Chair Janet Yellen later in the day. The 225-issue Nikkei average rose 62.38 points, or 0.37%, to close at 16,834.84. The Topix index of all first-section issues finished up 7.06 point, or 0.53%, at 1,349.93.
Core consumer prices, which exclude volatile fresh food prices, dropped 0.3% in April on the heels of a similar drop in March, Internal Affairs Ministry figures showed shortly before markets opened. The negative reading dealt a blow to Tokyo's faltering war on deflation, raising pressure on the BoJ to expand its vast monetary easing programme. Sentiment was also boosted by Japanese press reports saying that Prime Minister Shinzo Abe had decided to delay a planned sales tax hike over concerns it could damage the already fragile economy. Tokyo is scheduled to raise the sales tax from 8% to 10% in April 2017.
Speaking at a news conference at the G7 summit Friday, Abe himself told reporters: "I haven't made a decision at this point," adding he will come to a conclusion before an upper house election due in July.
Among gainers, energy explorer Inpex surged 3.59% to 880.7 yen and refiner JX Holdings gained 0.67% to 432.9 yen. Mitsubishi UFJ Financial Group rose 1.42% to 542.7 yen, while mobile giant SoftBank advanced 1.30% to 6,053 yen.
Among the losers, Toyota slipped 0.12% to 5,589 yen, while Takata slumped 8.07% to 421 yen, after skyrocketing more about 21% on Thursday on a report that a US private equity firm wants to take control of the embattled airbag supplier.
China Stocks fall as China industrial profit growth slows
Mainland China stock market finished the session marginally lower, as risk sentiments were subdued after release of weaker than expected industrial profit data and worries about capital outflows. Industrial companies' profit growth slowed from 11.1% in March. For the Jan.-April period, profits rose 6.5% from the previous year, according to the National Bureau of Statistics statement released on Friday. Sentiment toward Chinese stocks turned bearish after March's pickup in economic indicators didn't carry over to April and a high-profile warning by the People's Daily about the nation's high levels of debt damped hopes for more easing. Adding to the concern this week is the prospect of higher U.S. interest rates spurring capital outflows. The CSI300 index of the largest listed companies in Shanghai and Shenzhen shed 0.06%, to 3,062.50, while the Shanghai Composite Index fell 0.05%, to 2,821.05 points. The Shanghai Composite fell 0.2% this week to 2,821.05. The index has dropped 4% this month, extending this year's slide to 20%.
The People's Bank of China will keep policy slightly loose to support the economy, which still faces downward pressure, the China Business News said on Thursday, citing a report written by the central bank's monetary policy analysis team.
Global financial markets have been buzzing over whether China is shifting to a more cautious policy stance since an article in the official People's Daily early this month. The article quoted an "authoritative person" as saying China may suffer a financial crisis or recession if the government relies too much on debt-fuelled stimulus to boost flagging economic growth.
Chinese investors fear that means policymakers are taking their foot off the gas after a more than one-year long stimulus blitz, but most economists believe continued fiscal and monetary support is needed because the economy is not yet on a firm footing.
Shares of airline carriers declined, with Juneyao Airlines Co. leading slide amid concerns rising fuel prices risk a profits reversal for Chinese airlines, which reported surging earnings last year. Unlike most overseas peers, they don't hedge against big swings in fuel prices, making it easier for them to take advantage of reduced operating expenses.
Hong Kong Market rises on Shenzhen-HK connect launch talks
The Hong Kong stock market closed higher in volatile trade, on hopes of the launch of Shenzhen-HK connect program next week. The benchmark Hang Seng Index advanced 179.66 points, or 0.88%, to 20576.77 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, added 69.09 points, or 0.81%, to 8595.28. Turnover increased to HK$55.5 billion from HK$46.4 billion on Thursday.
Tencent (00700) was the top blue-chip winner today. It soared 5% to HK$171.2. HKEx (00388) also put on 2% to hK$182.3. Other securities players were also higher. First Shanghai (00227) shot up 10% to HK$1.22. Haitong International (00665) surged 5% to HK$4.31.
ICBC (01398), CCB (00939) and ABC (01288) rose 1-2% to HK$4.08, HK$4.94 and HK$2.8. Forbes ranked the lenders as top three on its global 2000-strong enterprise list.
Lenovo (00992) reported its first loss in seven years. It ended down 4% to HK$4.79. JP Morgan downgraded its rating to "neutral", while UBS lowered its target price to HK$5.2.
Tingyi (00322) plunged 10% to HK$7.21 afterr the noodle maker reported a 46% plunge in first-quarter net income.
Sensex, Nifty attain highest closing level in nearly 7 months
Stocks of public sector banks, pharma companies, crude oil refiners and index heavyweights Infosys and HDFC led the latest upmove on the bourses. The barometer index, the S&P BSE Sensex, rose 286.92 points or 1.09% to settle at 26,653.60. The Nifty 50 index rose 87 points or 1.08% to settle at 8,156.65.
Sun Pharmaceutical Industries surged after the company's US subsidiary Taro Pharmaceutical Industries posted strong financial performance for the year ended 31 March 2016. The State Bank of India stock surged, shrugging off weak financial performance for Q4 March 2016. BPCL jumped 9.12% after the company's board of directors recommended issue of 1:1 bonus shares at the time of announcement of its Q4 March 2016 results after trading hours yesterday, 26 May 2016.
Index heavyweight Reliance Industries (RIL) edged higher on reports that the company is preparing to restart work in four offshore oil and gas blocks, including one of India's biggest natural gas discoveries, as it seeks to revive development activity stalled for seven years by disputes with the government.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 inclined 0.64% to 6992.55. South Korea's KOSPI index added 0.62% to 1969.17. Taiwan's Taiex index grew 0.83% to 8463.61. Malaysia's KLCI rose 0.37% to 1637.19. Indonesia's Jakarta Composite index added 0.63% to 4814.73. Singapore's Straits Times index grew 1.05% to 2802.51.
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