Asia Pacific equity market mostly pushed back into the black after recouping initial losses on Thursday, 28 January 2016, on demand for selected blue chips after recent sharp falls.
Regional stocks fell in early trade after Wall Street lost ground overnight following the US Federal Reserve's policy statement. Overnight, the Dow Jones industrial average was down 222.77 points, or 1.38%, at 15,944.46, while the S&P 500 fell 20.68 points, or 1.09%, to 1,882.95. The Nasdaq composite finished lower by 99.51 points, or 2.18%, at 4,468.17.
The Federal Open Market Committee (FOMC) kept interest rates on hold, as widely expected, and slightly downgrading its growth and inflation outlooks. The Fed opted not to raise interest rates at its January meeting and gave no indication that it was changing course on its rate-hiking path ahead. But in its post-meeting statement, the Fed tweaked its view of the U.S. economy, noting that growth had slowed, business investment had moderated and inventory investment had decelerated. The central bank said it was "closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook. The central bank also said inflation was expected to remain low in the near term due in part to further declines in energy prices. But it sees the effects as transitory.
Crude oil prices were down in Asian trading after ticking up overnight on the back of news that non-OPEC oil producer Russia was discussing the possibility of cooperation with OPEC. U.S. crude futures were down 1.5% at $31.83 after closing up 2.7% during U.S. trading hours. Global benchmark Brent was down 1.4% at $32.65 a barrel after tacking on 4.1% in U.S. trade.
Among Asian bourses
Australia Stocks up
Australian share market ended higher after recovering initial losses, with energy and mining stocks leading gains. Sydney share market dipped sharply shortly after the flat opening as the US central bank in its rate-setting meeting overnight while keeping rates on hold as expected signalled renewed concern about market turbulence and global growth. The bourse, however, recovered in the second half of the morning. At the close, the benchmark S&P/ASX 200 index rose 29.80 points, or 0.6%, to 4976.20 points, while the broader All Ordinaries index added 27.30 points, or 0.55%, to 5028.10 points.
Shares of materials and resources were up on tracking iron ore futures strength. There was a bounce in iron ore prices overnight and there have been further rises in iron ore futures during Chinese trade today. BHP Billiton rose 0.6% to A$15.10 and Rio Tinto added 2.2% to A$38.93. Fortescue Metals surged 4.1% to A$1.52, after iron ore miner expects production costs to be lower than previously forecast, and plans to use the savings to continue paying of its debt. Newcrest Mining rallied 2.7% to A$13.88, after the gold miner unveiled a 6% production lift in the half.
Shares of energy players were also gained on firmer close of oil prices overnight, with Woodside Petroleum up 1.5% to A$26.37, while Santos added 2.1% to A$2.94, and Oil Search jumped 1.8% to A$6.10.
Rail and ports operator Asciano rose 4% to A$8.84 after a consortium led by stevedore Qube Holdings made a binding takeover proposal for Asciano.
Law firm Slater and Gordon tumbled 14.3% to A$0.63 after it backtracked on its plan to issue a cashflow update.
Jewellery retailer Lovisa plunged 35.6% to A$2.37 after issuing a flat full year earnings forecast.
Slater & Gordon fell 14.29% to A$0.63 after it failed to update the market on its cashflow as promised.
New Zealand shares mixed
Equities on the New Zealand share market were mixed on Thursday, 28 January 2016 as investors prepare for next month's earnings season, while global volatility made defensive stocks such as utilities more attractive. Z Energy and Metro Performance Glass advanced, while Nuplex Industries fell. By the provisional closing, the S&P/NZX 50 Index increased 7.76 points, or 0.1%, to 6149.70. Within the index, 22 stocks fell, 21 rose, and seven were unchanged. Turnover was $90 million.
Fonterra Shareholders' Fund rose 0.2% to $5.88. Fonterra Cooperative Group cut its forecast milk payout for this season as global milk supplies continue to outweigh demand, pushing out the timeframe for prices to recover for New Zealand's largest export commodity.
Air New Zealand fell 0.3% to $3.06, continuing to drift lower from its recent 13-year high. The airline announced last night that it will begin evening flights into Queenstown from July subject to regulatory approval, the first of a number of airlines expected to join suit.
Nikkei falls ahead of BOJ meeting
Japan share market closed down in thin trading, on tracking weak lead from Wall Street overnight and on caution before Bank of Japan policy meeting on Friday. Most of TSE sectors declined with retail stocks down after to official data showing retail sales fell 1.1% on-year in December 2015. The benchmark Nikkei 225 index declined 0.71%, or 122.47 points, to 17041.45. The Topix index of all Tokyo Stock Exchange First Section issues fell 8.60 points, or 0.61%, to 1392.10.
The Bank of Japan has commenced a policy meeting on Thursday and concludes on Friday. Given sluggish household spending and slower consumer price rises, the central bank is expected to ease its policy further to achieve its 2% inflation goal.
Retail stocks were down, after official data showed retail sales for December fell 1.1% on-year, due to weakness in household demand. Uniqlo-operator Fast Retailing fell 1.3% to 37120 yen. Seven & I was down 0.2% to 5055 yen.
Shares of export-related companies fell after yen appreciated against the dollar. The yen traded at 118.64 per dollar after the Fed said it's closely monitoring developments from China to Europe as well as oil for any adverse impact on the American economy. A stronger yen is a negative factor for exporters as it diminishes their overseas profits when converted back into local currency. Fanuc Corp dipped 1.7% to 18115 yen and Panasonic Corp 2.3% to 1086 yen. Automaker Nissan Motor Co shed 0.1% 1102 yen and Mazda Motor Corp. 1.8% to 1995 yen. Toshiba Corp. dropped 3.9% to 197 yen on reports Sony Corp. will not pursue a bid for Toshiba's medical unit. Shares of Sony Corp slumped 5.38% to 2378 yen
Smartphone suppliers in Japan plunged after Samsung Electronics Co. reported results that showed slowing demand for the devices, a day after Apple forecast a sales decline for the first time in more than a decade. Battery maker TDK Corp. sank 6.4% to 6300 yen, while Japan Display Inc. lost 6.7%. Components maker Alps Electric Co. sank 17% to 2208 yen after cutting its annual profit forecast on weak smartphone demand from a major customer.
China Market falls to a fresh one-year low
Mainland China stock market tumbled to a fresh one-year low, extending selling streak, as panic selling resumed amid heightening concern about capital outflows on deepening economic slowdown and bearish equity prediction from market experts. The selloff pressured overshadowed another huge injection of Chinese central bank cash into the financial system. The Shanghai Composite Index ended down 2.92%, or 79.90 points, at 2655.66. The index was down 25% since the start of 2016. The Shenzhen Composite dropped 4.18%, or 71.09 points, to 1629.06. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, shed 76.59 points, or 2.61%, to 2853.76.
Investors concern about capital outflows accelerated after reports that capital outflows jumped to US$158.7 billion in December, the second-highest monthly outflow of the year after September's $194.3 billion, with the estimated 2015 total reaching a record US$1 trillion, more than seven times higher than the whole of 2014.
Shares of material and industrial tumbled the most in SSE sectors, with marine transportation stocks leading losses after the Baltic Dry Index, a measure of commodity shipping costs, slid to a 30-year low. China Shipbuilding Industry Co. and China CSSC Holdings fell 10% maximum daily limit. China Minmetals Rare Earth Co. dropped by the daily limit of 10%, while Angang Steel Co. slid 9.9%.
Hong Kong Market ends higher
The Hong Kong stock market ended higher, as investors' spirits lifted up on demand for selected blue chips, with casino, energy and realty stocks being major gainers. The benchmark Hang Seng Index has gained 143.38 points, or 0.75%, to 19195.83 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, added 69.07 points, or 0.87%, to 8028.58 points. Turnover reduced slightly to HK$75.5 billion from HK$76.2 billion on Wednesday.
Macau gaming counters outperformed the general market. Sands China (01928) leaped 6.7% to HK$26.2 after HSBC Research raised its target price for casino operator to HK$25 from HK$24.2, and retained its "hold" rating, citing Sands' result came in 14% above HSBC's estimates and margin came in stronger versus expectations, up 2.3% qoq to 35.3% from 33% in 3Q 2015 on very effective cost control. It noted that management continues to believe that new openings are instrumental in growing the overall market in the long run and expect the Parisian to open once it is ready and will not be affected in case of other projects delay. Galaxy Ent (00027) also soared 5% to HK$23.6.
Realty stocks were stronger as the Fed did not display strong intention about slowing the pace of upcoming rate hike. Hang Lung Properties (00101) added 1% to HK$14.5. Sino Land (00083) dipped 1.9% to HK$9.63. Henderson Land (00012) shot up 6.7% to HK$42.75 on the speculation of reorganization.
Sensex settles with small losses
Indian stock market provisionally closed with small losses after a sudden reversal of trend in late trade. The barometer index, the S&P BSE Sensex, fell 48.06 points or 0.2% at 24,444.33 and the 50-unit Nifty 50 index shed 13.95 points or 0.19% at 7,423.80, as per the provisional closing data.
Shares of oil exploration and production stocks rose after a rebound in crude oil prices. Cairn India (up 4.76%), Reliance Industries (RIL) (up 1.86%), Oil India (up 0.22%) and ONGC (up 0.82%) edged higher. Higher crude oil prices would result in higher realization from crude sales for oil exploration firms. Shares of state-run oil marketing companies (PSU OMCs) also gained. HPCL (up 2.07%) and Indian Oil Corporation (IOCL) (up 0.79%) gained. BPCL fell 0.32%.
HDFC dropped 1.52% after the company reported a muted growth in bottom line in Q3 December 2015. Net profit rose 6.66% to Rs 1520.51 crore on 6.46% rise in total income to Rs 7327.69 crore in Q3 December 2015 over Q3 December 2014. As at 31 December 2015, the loan book stood at Rs 248097 crore as against Rs 219939 crore as at 31 December 2014. The result was announced after market hours yesterday, 27 January 2016.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index added 0.7% to 7905.10. South Korea's KOPSI rose 0.5% to 1906.94. Malaysia's KLCI rose 0.2% to 1634.53. Singapore's Straits Times index added 0.6% at 2562.45. Indonesia's Jakarta Composite index climbed up 0.4% to 4602.83.
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