Asia Pacific stocks closed mixed as debt concerns linger

MoM Team / Mumbai, Feb 22, 04:04 PM

Asia Pacific stocks closed mostly in diverse terrain on Wednesday, 22 February 2012, as many investors moved to take quick profits on concerns about market overheating after the regional indices hovering near multi months peak and skeptical about Greece second bailout. Key benchmark indices in Australia, Hong Kong, China, South Korea, Japan and Taiwan rose by between 0.09% to 1.01%, while the Key benchmark indices in New Zealand, Indonesia, India and Singapore were down by between 0.27% to 1.5%



Euro zone finance ministers struck a deal on Tuesday for a second bailout program for Greece that includes new financing of 130 billion euros and aims to cut Greece's debt to 121% of GDP by 2020 from around 160% of GDP now. Private sector holders of Greek debt are expected to take losses of up to 53.5% on the nominal value of their bonds as part of a debt exchange that will reduce Greece's debts by around 100 billion euros.



But pessimism about Greece's future remains on the dock as many hurdles remaining to be cleared, doubts about implementation of the austerity plan in Greece and at least three countries including Germany and Finland have to win parliamentary approval for the bailout deal. Market analysts cautious the second bailout deal for Greece might weaken the region's economic growth. Analysts pointed out that hurdles remain for Greece to implement the bailout package on participation of the debt swap and ability to achieve the target.



Back to countrywide performances, the Australian stocks ended lackluster trade tad above the neutral line after moving in the narrow range entire day, with the broader All ordinaries Index closed 0.09% up at 4,372.10, registering fourth day of consecutive gaining, as enthusiasm over another massive eurozone bailout for Greece. Shares of OneSteel, SEEK and Wotif were the biggest gainers in the ASX200 pack, while the Ten Network was the biggest loser.



Shares of Onesteel climbed up another 15.9% to A$0.95, on the top of 12.3% rally prior day. The company has reported a loss of A$74 million in the first half ended December 2012, but remains bullish about growth in the second half. Company said its one-off A$130 million write-down on one of its business segments, in addition to restructuring costs impacted the company bottom line.



SEEK surged 10.7% to A$6.31 after the online jobs website firm has posted a record first half profit of A$60.6 million, thanks to growth in Australian employment and its Chinese and education businesses.



Wotif closed 8.3% higher at A$4.45 after the company reported a 14% rise in 1H12 (July to December 2011) net profit to A$28.8 million.



CSL closed 2.5% to A$31.72 after the company has announced higher dividend and upgraded its profit expectations by 3% for 2012. CSL reported a 3.4% drop in 1H12 (July to December 2011) profit to A$483 million.



Suncorp Group slumped 2.1% to A$8.25. Queensland based financial services conglomerate firm has reported a sharp rise in first half profit to $389 million, driven by strong performance at its banking and life insurance divisions. However profit fell at its general insurance unit, due to a large number of claims resulting from a string of natural disasters last year, including the Christmas Day hailstorm in Melbourne. Shareholders will be rewarded with an interim dividend of 20c per share, slightly below expectations.



The Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months ahead, rose 1.3 points or 0.5% in December to 283.4 points, Westpac-MI said Wednesday. The annualized growth rate rose to 2.3% in December compared with 1.8% in November. The coincident index rose 0.2 points or 0.1% to 270.6 in December taking its annualized growth rate to 2.5% which is also below its longer-term trend of 3.0%.



Wage price index, which measures changes in the price of labor in the Australian labor market, rose a seasonally adjusted 1.0% quarter-on-quarter in the fourth quarter, compared with a rise of 0.7% in the quarter ended September. This took the annual pace of increase to 3.6%, the same as in the September quarter, data from the Australian Bureau of Statistics showed Wednesday.



In New Zealand, NZ shares closed weaker following the downward lead from European stocks that slipped despite a 130 billion euro bailout fund confirmed for troubled Greece, with fears in the marketplace that it could still default in future. Risk sentiment also hammered by one of the market's biggest players Fletcher Building, who posted weak result. The company's first-half earnings missed its own guidance and cut its full-year forecast, saying it sees little improvement in home-building demand. The NZX50 index was down 0.3% or 9.08 points to 3328.23. Meanwhile, the leading shares NZX 15 index ended down 0.47% or 30.19 points at 6393.117.



Fletcher Building, New Zealand's biggest listed company, posted a 13% decline in first-half profit, missing its guidance, and cut its forecast for the full year on weak demand for home building and charges to restructure its Laminex unit. Net profit fell to $144 million in the six months ended Dec. 31, from $166 million a year earlier. Sales rose 30% to $4.5 billion, helped by the contribution of the Crane business in Australia. Excluding Crane, sales fell 5%.



In Japan, Tokyo stocks rallied in the afternoon trade, sending the benchmark Nikkei225 Stock Average 0.96% higher at 9,554, a highest point since August 4, 2011, when it hit 9,659.18, on the back of yen depreciation against major currency baskets. Trading volume was solid, totaling about 2.4 billion shares.



Small and mid capitalization stocks supported market upward move, with the stock index for the second section of the Tokyo Stock Exchange advanced 0.9% to 2,329.15, registering 27th straight rise. Extra spending worth about 20 trillion yen from four supplementary government budgets designed to stoke demand and rebuild after the March disaster have lifted shares of companies that make most of their sales domestically.



Export related stocks were higher, with electronics product makers gained the most, thanks to weaker yen against the greenback and the euro. Sony Corp gained 1.5% at 1,682 yen, Panasonic Corp 2.3% to 726 yen, and Fujifilm Holding 1.3% to 2,007 yen. Nissan Motor Co gained 2.3% to 814 yen, Toyota Motor 1.8% to 3,380 yen, and Honda Motor Co 2.1% to 2,996 yen. Machinery makers were up, with company having significant business exposures to China lost the most after a rise in the preliminary HSBC China manufacturing purchasing managers index in February. Hitachi Construction Machinery Co added 1.2% to 1,690 yen and Komatsu 0.6% to 2,425 yen.



In China, the China stock market wrapped trade modestly higher, with the benchmark Shanghai Composite Index up 0.93% at 2,403.59, a highest level since November 29, 2011, when index closed at 2,412.39. Market upward move was supported by the central bank moved to ease a credit crunch by cutting lenders' reserve requirements by 50 basis points and growing expectation of more easing monetary tightening grip from the government after the HSBC flash PMI data indicated China's manufacturing sector shrank for a fourth straight month in February.



The HSBC Flash China Manufacturing PMI rose to 49.7 in February, up from January's final 48.8 and December's final 48.7 reading, but remain below 50 level threshold, a level that divide between expansion and contraction. Growth remains on track of slowdown, despite the marginal improvement in the headline flash PMI led by quickened production after Chinese New Year. The Flash China Manufacturing Output Index also rose to 50.1 from 47.6 in January.



Shares of realty developers rallied on speculation that Shanghai is taking measures to relax property curbs. China Vanke Co, the nation's biggest developer jumped 3.4% to 8.19 yuan. Poly Real Estate Group gained 2.7% to 11.28 yuan. Gemdale Corp soared 3.9% to 5.65 yuan.



In Hong Kong, HK stocks closed firmer in volatile trade, with Chinese stocks leading the rally. The Hang Seng Index ended up 70 points to 21,549, off its intra-day low of 21,302. Turnover rose slightly to HK$70.4 billion from HK$64.6 billion on Tuesday.



Mainland developers rose across the board on news that Shanghai relaxed its restrictions on second home purchases. China Overseas Land grew 2.8% to HK$16.40 and China Resource Land 2.9% to HK$15.14. Greentown, Evergrande, Costal Greenland soared 14-15% to HK$6.19, HK$1.63, and HK$0.33. China cement stocks closed higher, inline with continue strength in mainland developers, as a potential revival in the physical property market would be beneficial to cement demand. Anhui Conch Cement added 2% at HK$28 and China National Building Material 0.8% to HK$11.06.



Alibaba soared 42.7% to HK$13.20 after its parent company made offer to take the listed company private at HK$13.5. Morgan Stanley raised its target price for Alibaba.com to HK$9.6 from HK$8.6, and maintained its equal-weight rating.



Anhui Expressway closed 1.4% down at HK$4.93 after the company said it agreed to acquire 51% equity interest in Anhui Guangci Expressway Company from controlling shareholder at 215 million yuan. Anhui Expressway also agreed to acquire 4.47% equity interest in Guangci Expressway from Xuancheng Highway Management at 18.88 million yuan. Immediately after the completion of the acquisitions, Anhui Expressway will own Guangci Expressway 55.47% stake.



Hong Kong Resources slid 3.9% to HK$0.49 after announcing company chairman, Kennedy Wong, and two executive directors, Alex Chui and Herbert Hui, recently assisted in an investigation carried out by the city's anti-corruption regulator.



In India, the Bombay Stock Exchange's 30-share Sensex provisionally closed 1.54% down at 18,145.25, as traders unwound long positions ahead of February F&O series expiry on Thursday. Lower opening of European markets also hammered selloff in the Indian markets. Realty, metals, banks and power stocks led the correction while technology space ended modestly higher.



Foreign institutional investors (FIIs) bought Indian shares worth a net Rs 1400.17 crore on Tuesday, 21 February 2012, as per provisional data from the stock exchanges.



The PMEAC's estimated rate of growth in 2011-12 at 7.1% is marginally higher than the 6.9% projection made by the Central Statistical Organization, due to better growth in agriculture and construction.



 

Source: Capital Market