Asia Pacific stocks closed mixed on Thursday, March 22, 2012, as most of the blue chip issues trimmed initial losses before finishing on expectation of policy easing in China after weak flash manufacturing data for March and unexpected rise in Japan export last month. Meanwhile mixed U.S. housing data and weaker than expected German and French preliminary PMI data also weighed on risk appetite.
Regional markets moved in tight range today as investors reluctant to take risk on deepening wariness about Chinese economic growth after reports from the HSBC stated the HSBC China flash purchasing managers' index (PMI) for March, the earliest indictor of manufacturing activity in the world's second-largest economy this month, fell sharply in March as the rate of booking new orders fell to a four-month low at factories. The flash PMI for March printed at 48.1, down from a final reading of 49.6 in February, HSBC said. An index reading of 50 marks the line between expansion and contraction
Further adding to risk averse was weak German and French flash PMI data. In Germany, the Purchasing Managers' Index for the service sector came in at 51.8, down from 52.8 in February, while the manufacturing PMI dropped unexpectedly to 48.1 from 50.2 in February, flash data from Markit Economics showed. The flash Composite Output Index fell to 51.4 from 53.2 in February. Meanwhile, in France, the purchasing managers' index or PMI for the manufacturing sector fell to a four-month low of 47.6 in March from 50 in February, the flash results of a survey by Markit Economics revealed. The composite output index fell to a four-month low of 49 in March from 50.2 in February.
The National Association of Realtors released report about the state of the US housing market on Wednesday, showing sales of previously occupied homes dipped last month, but the sales pace for the winter was the best in five years. Existing-home sales decreased 0.9% in February from a month earlier to a seasonally adjusted annual rate of 4.59 million. Meanwhile, January's annualized sales pace was revised upward to 4.63 million from an originally reported 4.57 million. February's sales were 8.8% above the same month a year earlier. The first two months of 2012 were the strongest start to a year since 2007. January saw the most sales since tax credits that spurred sales expired in May 2010, and February was the second-strongest month.
Back to country wise performance, the Sydney stocks ended modestly higher today, lifted by strong gains in banks, although yet another sign of a Chinese slowdown spooked investors. The benchmark S&P/ASX200 index closed 0.46% higher at 4,272.7, while the broader All Ordinaries index was up 0.4% at 4,364.9.
The Australian big banks led the financial sector higher, with National Australia Bank the standout performer, gaining 1.2% to A$24.39. Investment bank Macquarie Group surged 3% to A$29.11, while QBE Insurance jumped 2.06% to A$13.90.
Sigma Pharmaceuticals shares surged 5.7% to A$0.65 after the company reported a net profit of A$49.17 million for the 12 months to January 31, a marked improvement on the loss of A$235.38 million in the prior year.
In New Zealand, the Auckland shares fell on Thursday pushing the NZX 50 Index to a seven-day low, after figures showed the economy grew at half the pace expected in the fourth quarter. The NZX 50 Index fell 7.304 points, or 0.2 percent, to 3474.653. Within the index, 20 stocks fell, 24 rose and six were unchanged. Turnover was $95 million.
The New Zealand economy grew at half the expected pace in the final three months of 2011 as a tepid manufacturing sector slowed the nation's recovery. Gross domestic product grew 0.3 percent in the three months ended Dec. 31, slowing from a revised 0.7 percent pace three months earlier, according to Statistics New Zealand.
In Japan, the Tokyo stocks closed slight higher, sending the benchmark Nikkei Stock Average up 0.4% to 10,127.08, registering third day of gain this week, on the back of higher than market expected domestic exports and news that China would cut credit requirements for rural banks. Meanwhile, upward momentum also got support from stable housing data out of the US. But, market gains were limited, due to yen appreciation against the euro and the US dollar, weak China flash manufacturing data, and mixed finish of US market overnight.
24 of 33 industries (sectors) of the Tokyo Stock Exchange logged gains today; with shares from the resources and rubber companies gained the most. Inpex Corp added 1.4% to 571,000 yen. Bridgestone Corp added 1.2% to 2,025 yen. Textile & apparels stocks also performed strongly today. Nitto Boseki Co added 1.9% to 320 yen and Teijin 2.8% to 290 yen. Uny Co advanced 2.6% to 886 yen.
Machinery related companies declined in Japan with players having major business exposure to China suffered the most after disappointing China flash manufacturing data for March released today. Ebara Corp melted 1% to 313 yen, Komatsu 1.4% to 2,389 yen, Fanuc Corp 1.2% to 15,170 yen, and Hitachi Construction Machinery 1.7% to 1,823 yen.
The Ministry of Finance said on Thursday that Japan posted a merchandise trade surplus of 32.921 billion yen in February, down an annual 94.8 percent, but moving into the black for the first time in five months. The headline figure rebounded from downwardly revised shortfall of 1.476 trillion yen in January. Exports were down 2.7 percent on year to 5.440 trillion yen, following the 9.3 percent decline in the previous month. Imports came in higher by an annual 9.2 percent to 5.407 trillion yen in February after climbing 9.9 percent on year in the previous month.
In China, the Chinese stocks finished lackluster session slight lower after moving in and out of boundary line entire day on Thursday, with the benchmark Shanghai Composite index 0.1% down from prior day at 2,375.77, as negativity arose from the decline in China's preliminary purchasing managers' index for March mostly offset by the positive impact of rising expectations of policy easing.
7 of 10 SSE sectoral indices dived into the sea of red, with key decliners were materials (-1.36%) and energy (-0.8%) fell heavily. materials and resources companies suffered losses due to pullback in base metals prices as well as worse than expected China flash PMI for March. Jiangxi Copper Co declined 2.1% to 25.89 yuan. Aluminum Corp of China sank 2.8% to 7.38 yuan. Chongyi Zhangyuan Tungsten CO erased 3% to 34.110 yuan and Tibet Mineral Development Co 4.1% to 27.46 yuan. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co, China's biggest producer of rare earth, plunged 5.5% to 66.45 yuan.
Oil & coal producers closed lower also lower following weak preliminary manufacturing report. PetroChina Co decreased by 0.5% to 10.05 yuan and China Petroleum & Chemical Corp 0.9% to 7.45 yuan.
In Hong Kong, the HK stocks closed range bound session slight higher on Thursday, as investors chased for value buying following four straight sessions of fall, but upside momentum mostly capped by the weak China preliminary manufacturing data on the top of sign of slowing Chinese economy growth. The benchmark Hang Seng index closed session at 20,901.56, rose 44.93 points from prior day, and 99.77 points from intraday low.
Retailers jumped on anticipation of monetary-policy stimulus to support consumption. Belle International jumped 3.2% to HK$14.64, Hengan International 2.8% to HK$73.20, and Want Want China 1.6% to HK$8.83. Li & Fung, which is scheduled to report its 2011 results after market hour, rose 0.4% to HK$19.06.
Shares of solar energy equipment producers declined after the US President Barack Obama's administration imposed preliminary duties of as much as 4.73% on solar-energy equipment imported from China. Solargiga Energy Holdings sank 1.2% to HK$0.84, China Singyes Solar Technologies Holdings 3.1% to HK$4.12, China Suntien Green Energy Corp 4.1% to HK$1.64, and Comtec Solar Systems Group 3.6% to HK$1.32.
In India, the Bombay Stock Exchange's Sensex closed 2.3% down at 17,196.47 as broadbased selling on weak cues from European markets coupled with rupee depreciation spooked sentiments. The rupee fell to more than two-month low, breaching 51 a dollar level, which suggests that foreign institutional investors pulled out some money by selling Indian equities.
Selloff pressure also intensified in the Indian equities on newspaper report that claimed that the government lost up to Rs 10.67 lakh crore in revenue by selling coal deposits too cheaply is "exceedingly misleading", the Comptroller and Auditor General (CAG) said in a letter published by the prime minister's office on Thursday, 22 March 2012. Any unintended benefit to companies in the allocation of coal blocks is not necessarily a loss to the government, a statement from the prime minister's office said, citing a letter from the CAG. The newspaper report citing a draft CAG report said the beneficiaries of the coal block allocation include private companies and public sector units in industries such as power, steel and cement. A total of 155 coalfields were allocated to these firms between 2004 and 2009, it said.
All the Indian sectoral indices closed in the red with realty, power, capital goods and metals leading the decline. Jindal Steel was the biggest loser among largecaps, falling over 8%. India's most valued stock Reliance Industries crashed 4%. Engineering and construction major Larsen & Toubro and country's largest private sector lender ICICI Bank were down 4%.
Among other Asian bourses, the Hong Kong hang Seng Index added 0.22% to 20,901.56. Singapore Strait Times index lost 0.88% to 2,979.25. South Korea KOSPI was down 0.05% to 2,026.12. Taiwan TAIEX index jumped 1% at 8,059.94. The Indonesia Jakarta Composite index rose 0.1% to 4,041.56. Malaysia KLSE Composite added 0.04% to 1,583.24.