Asia Pacific share market declined on Monday, 27 March 2017, due to uncertainty over the ability of the administration of U.S. President Donald Trump to implement its economic agenda.
Regional financial market commenced trading with backfoot, as investors reacted to the failure of U.S. President Donald Trump to rally sufficient support within his own Republican party for legislation to repeal and replace his predecessor's health care law. Last Friday, Republican leaders withdrew the replacement bill ahead of a vote in the House of Representatives due to lack of support. The move threw into question Trump's ability to execute his promised economic reforms, sparking another round of uncertainty in financial markets. The uncertainty about U.S. government management triggered a risk-off mood that soured the market.
Trump's agenda of boosting growth by expanding infrastructure investment and cutting taxes and regulations had spurred stock markets since his election victory in November. Investors have started to question the credibility of President Trump's pro-growth reforms after House Republicans scrapped his flagship health care bill on Friday. Some traders started to think Mr. Trump will face difficulty implementing the large-scale tax cut he promised, as it now seems hard to bridge differences within the Republicans.
On the energy front, Brent crude futures slipped 0.27% to $47.84 a barrel while U.S. crude dipped 0.27% at $47.84. A joint committee of ministers from OPEC and non-OPEC oil producers has agreed to review whether a global pact to limit supplies should be extended by six months, according to a statement on Sunday.
Investors are also focused on U.K. Prime Minister Theresa May's plans to set out how her government plans to restore sovereignty over Britain's laws in a speech scheduled for Thursday.
Among Asian Bourses
Australia Shares down on materials
Australian equity market finished session down in the wake of Wall Street's fall on Friday, with mining stocks accounting for most of the slide. At the close, the benchmark S&P/ASX 200 index surrendered 6.80 points, or 0.12%, to 5,746.70, while the broader All Ordinaries index lost 6.90 points, or 0.12%, to 5,789.30. Falling stocks outnumbered advancing ones on the Australia Stock Exchange by 520 to 466 and 348 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was up 6.53% to 12.648.
The big pressure points for the Australian benchmark index were metal majors after Chinese steel and iron ore futures sank to their lowest in more than six weeks on Monday, amid mounting concerns about demand and growing inventories. BHP Billiton fell 2.9%, Rio Tinto was off 1.8% and Fortescue Metals down 3%.
Shares of department store giant Myer Holdings spiked 18.3% on reports by the Australian Financial Review saying 10% of its shares were bought by Australian businessman Solomon Lew at a premium.
Nikkei falls on stronger yen
The Japan share market closed down, weighed by yen appreciation against greenback and worry about the Trump's administration's inability to push through its policy initiatives. Every industry category on the main section lost ground, led by insurance, securities and real estate issues. The benchmark Nikkei 225 index fell 1.44%, or 276.94 points, to 18,985.59, its lowest close since Feb. 9. The broader Topix index of all first-section issues was down 1.26%, or 19.53 points, to end the day at 1,524.39.
Infrastructure stocks, which rose in anticipation of a Trump-driven increase in spending, were among Monday's largest decliners. Steel producer JFE Holdings fell 2.2% and construction-machinery makers Kubota fell 3.2%.
Exporters sank as the yen strengthened against the dollar on growing doubts about US President Donald Trump's ability to carry out his economic agenda following Friday's failed healthcare deal. The yen is seen as a safe bet in times of uncertainty or turmoil, but a stronger currency hurts the profitability of exporters -- hitting demand for their shares. The dollar slipped to 110.27 yen from 111.12 yen in New York Friday. Toyota dropped 1.13% to 6,158 yen while rival Honda lost 1.45% to finish at 3,390 yen. Sony fell 0.72% to 3,577 yen, and Canon dropped 0.97% to 3,461 yen.
Toshiba closed down 2.06% at 218.4 yen, after the leading Nikkei business newspaper said its loss-hit US unit Westinghouse could file for Chapter 11 bankruptcy as early as Tuesday in a court-protected restructuring.
China Stocks tread water as new property curbs offsets good industrial profits
The Mainland China equity market ended down, in line with a regional sell-off as Donald Trump's failure to push through his health care bill raised questions about his chances of passing tough tax reform and spending measures. Meanwhile, optimism felt from data showing surging profits at Chinese industrial firms was offset by fresh property curbs and signs that monetary policy may be further tightened. Most sectors fell on Monday, but transportation and banking stocks were firm. The benchmark Shanghai Composite Index closed 0.08%, or 2.49 points, lower at 3,266.96. The Shenzhen Composite Index, which tracks stocks on China's second exchange, lost 0.36%, or 7.33 points, to 2,039.41. The large-cap CSI300 closed 0.3% lower at 3,478.
Offering fresh signs of China's economic recovery, the National Bureau of Statistics reported that China's industrial profits jumped 31.5% year on year for the January-February period, versus a 2.3% increase in December, as commodity prices jumped.
But a market response was muted by Beijing's fresh measures to ward off asset price bubbles. Beijing on Sunday night rolled out fresh curbs on commercial property purchases by individuals in the latest government effort to cool the overheated property sector, while the central bank chose not to inject funds into the banking system citing relatively high levels of liquidity.
Underscoring the shift in Beijing's policy focus, Zhou Xiao chuan, governor of the People's Bank of China (PBOC) said on Sunday that he expects to see more countries start to emphasize fiscal policy and structural reform as the period of loose monetary policy ends. On the bright side, listed companies' profitability is improving due to the economic recovery, and equities are a better investment than bonds and property amid the government's deleveraging campaign, he wrote. On the dark side, interest rates are climbing higher, while the property curbs and deleveraging efforts cast doubt on the sustainability of the recovery, suppressing equity valuations.
Hong Kong Stocks close down
The Hong Kong stock market closed session down, as sentiment was hurt by China's latest curbs on property purchasing and after Wall Street fall on Friday in the wake of the US President's failed attempt to overturn his predecessor's signature health care policy known as Obamacare. The Hang Seng Index closed 0.7% lower to 24,193.7 on Monday. The Hang Seng China Enterprises Index, known as the H-shares index, declined 1.1% to 10,362. Turnover increased slightly to HK$89 billion from HK$83.4 billion on Friday.
Mainland developers were pressured as escalating tightening measures on property market were seen in more cities. China Overseas (00688) sank 4.4% to HK$22.7. China Vanke (02202) dipped 4.6% to HK$21.65. Greentown China (03900) plunged 11.6% to HK$7.85 even though it reported earnings growth of 140% for 2016. Kaisa Group (01638) soared 56% to HK$2.43 on trading resumption after two years of halt.
Carrie Lam, the new executive-elect of HK, has won support from local developers. But HK property counters were lower. New World Development (00017) slipped 1.3% to HK$9.64. CK Property (01113) fell 0.5% to HK$53.95.
Chinese financials mostly fell. China Merchants Bank closed 2% lower to HK$20.7 after the lender said its non-performing loan ratio had increased to 1.87% by the end of 2016, although its net profit rose 7.6% to 62 billion yuan (US$9 billion). ICBC and Bank of China dropped 0.8% and 1.3% respectively, trading at HK$5.12 and HK$3.9 at the close. China Construction Bank shed 0.9% to HK$6.3. The three banking giants are set to unveil their annual results later this week.
Sinopec (00386) edged up 0.2% to HK$6.21 after oil giant reported strong earnings with higher dividend, and also issued positive profit alert for 1Q 2017. The refiner said its 2016 net income jumped 44% from the previous year.
Sensex closes down as metal, energy stocks fall
Indian stock market extended losses today following sustained selling in metal, energy, telecom, oil&gas, FMCG and Auto sectors amid weak Asian cues. BSE Sensex closed lower by 188 points, or 0.64%, to 29,233, while the Nifty 50 fell 63 points, or 0.69%, to 9,045.
Foreign portfolio investors (FPIs) bought shares worth Rs543.35 crore on last Friday, as per provisional data released by the stock exchanges. Globally, Asian markets were mostly lower after President Trump suffered a legislative defeat last Friday when Republican leaders pulled a bill to overhaul the US health care system. The US stocks ended lower last Friday, as House Republicans withdrew the American Health Care Act after determining that they did not have enough votes to pass the bill.
Shares of Reliance Industries took a beating, falling 3% after Sebi accused co of having committed a fraud in taking a short trading position at the time of selling a stake in a unit in 2007. It has also ordered Reliance Industries to surrender most of gains, plus interest; bars it from trading in derivatives for one year.
Coal India fell 2% after the state-owned miner announced its second interim dividend of Rs 1.15/ share for current financial year as the dividend amount declared slightly less than market expectations.