2nd Jun 2015 09:18
CANBERA (Alliance News) - Asian stocks fell broadly on Tuesday as upbeat data on US manufacturing activity and construction spending reignited rate hike worries ahead of the release of US non-farm payroll data on Friday and the next Federal Reserve meeting scheduled for June 16-17. Investors also digested central bank decisions in Australia and India that came along the expected lines.
Chinese shares bucked the downward trend to end sharply higher as investors shrugged off earlier fears of a deeper correction. The benchmark Shanghai Composite index, which had jumped nearly 5% on Monday, swung between gains and losses before closing up 81.79 points or 1.69% at 4,910.53.
Hong Kong's Hang Seng index dropped 130.44 points or 0.47% to close at 27,466.72 despite strong gains in mainland Chinese markets for the second day in a row.
Japanese shares fell slightly after 12 straight days of gains even as the yen fell to a new 12-year low of 125 against the dollar on speculation the Federal Reserve will raise interest rates later this year. The benchmark Nikkei average closed down 26.68 points or 0.13% at 20,543.19, snapping its longest winning streak since 1988. The broader Topix index of all first-section shares slid 0.26% to finish at 1,674.21.
Sumitomo Mitsui Trust Holdings, Daiwa Securities, Advantest, Mizuho Financial Group and Bridgestone fell 2-3%, while J Front Retailing and NTT DOCOMO climbed 3-4%. Utility stocks posted broad-based gains, with Chubu Electric Power rallying 4.5% while rival Tokyo Electric Power gained 1%.
Australian shares ended deep in the red, with resource stocks pacing the decliners after a firmer dollar hit prices of dollar-denominated commodities overnight. Banks also fell as the Reserve Bank of Australia left the official cash rate on hold, as widely expected by economists, after lowering it by 25 basis points last month, citing weak business investment and slowing Chinese growth. The benchmark S&P/ASS 200 index fell 99.4 points or 1.73% to 5,636, marking its biggest fall in four weeks.
Mining giant BHP Billiton tumbled 3% and rival Rio Tinto dropped 1.6%. The big four banks closed down between 1.3% and 2.4%. In the energy sector, Woodside Petroleum, Santos and Oil Search lost 1-4%. Retail Food Group shed 2% after reaffirming its outlook for full-year net profit. Telstra declined 1% as it apologized for an outage that left thousands of NSW mobile phone customers unable to send or receive calls.
In economic news, Australia's current account deficit widened to AUD10.7 billion in the first quarter of the year from the downwardly revised AUD10.239 billion deficit in the fourth quarter of 2014, official figures showed. The headline figure slimly beat forecasts for a shortfall of AUD10.8 billion.
South Korea's Kospi average dropped 23.73 points or 1.13% to close at 2,078.64, its lowest level in about eight weeks, as renewed weakness in the yen battered automakers and an outbreak of Middle East Respiratory Syndrome (MERS) in South Korea that has affected 25 people in two weeks sent travel stocks lower.
Hyundai Motor slumped 9.4% after saying its domestic sales declined for a second straight month despite price cuts on most models. Shares of its affiliate Kia Motors plummeted 4.1%.
On the economic front, South Korea's monthly current account surplus narrowed in April to USD8.14 billion from a four-month high of USD10.39 billion in March, central bank data showed. Another report showed that the country's core inflation, which excludes volatile oil and food prices, increased 2.1% in May from a year earlier. The consumer price index rose 0.5% year-over year to stay below 1.0% for the sixth straight month.
New Zealand shares shrugged off regional weakness to end modestly higher as trading resumed after a public holiday on Monday. The benchmark NZX-50 index rose 18.79 points or 0.32% to close at 5,863.74. Z Energy shares jumped 22% to a record high after the service station chain said it had signed an agreement to buy Chevron's fuel business in New Zealand in a deal valued at USD785 million.
Spark New Zealand rallied 3.3% after saying it plans to buy back as many as 40 million shares on market for up to USD100 million this year. Meridian Energy led the decliners on the exchange, falling almost 4% to USD2.22, while Contact Energy and Fletcher Building slid about 1.6% each.
In economic releases, New Zealand's merchandise terms of trade gained 1.5% sequentially in the first quarter of 2015, as import prices fell more than export prices, Statistics New Zealand data showed. The rise follows two consecutive falls in the terms of trade.
India's Sensex was tumbling 2% as worries about how Fed rate increases might affect capital flows overshadowed RBI's rate cut for the third time in five months. The central bank cut its repo rate by 25 basis points to 7.25%, as widely expected, after taking similar moves in January and March.
Elsewhere, Singapore's Straits Times index was losing 1.3%, while Malaysia's KLSE Composite index and the Taiwan Weighted average were down about 0.1% each.
US stocks posted modest gains in quiet trading on Monday, as investors assessed a batch of mostly upbeat economic data and dovish comments from a Federal Reserve official playing down the timing of an interest-rate hike.
The pace of manufacturing growth accelerated in May for the first time in six months on the back of increased new orders and employment, construction spending jumped to its highest level in nearly 6-1/2 years in April and personal income topped expectations, while personal spending was unexpectedly flat in April. The Dow and the S&P 500 edged up about 0.2% each, while the tech-heavy Nasdaq added 0.3%.
Copyright RTT News/dpa-AFX