RTTNews - The markets across Asia, except Australia, ended in the negative territory on Wednesday ahead of the FOMC announcement in the U.S. later in the day. Profit taking after the recent rally and concerns about valuations following recent run-up in stocks much too quickly impacted sentiment across the region.
In Japan, the benchmark Nikkei 225 Index ended the session at 10,435, down 150.46 points, or 1.42%, while the broader Topix index of all first section stocks slipped into negative territory with a loss of 13.40 points, or 1.40% at 960.
Releasing its Monthly report on Recent Economic and Financial Developments, the Bank of Japan maintained its economic assessment for the country, after having upgraded the assessment in the past three months. Reaffirming its statement made in July that economic conditions have stopped worsening, the Bank said that economic conditions are likely to turn upward over time.
Separately, the Bank of Japan revealed that the corporate goods price index, or the the prices paid by producers dropped at a record pace in July. The Bank stated that corporate goods prices slipped 8.5% year-on-year in July, quicker than the 6.7% fall in the preceding month. However, month-on-month, the producer prices climbed 0.4% in July, reversing ten consecutive months of falls.
Profit taking was witnessed across the board as traders preferred to lock in gains and move to sidelines ahead of key FOMC announcement in the U.S. Exporters declined following appreciation of the local currency, Japanese Yen, against the greenback.
Banks ended in negative territory on profit taking. Mitsubishi UFJ Financial lost 1.48%, Mizuho Financial fell 1.26%, Resona Holdings declined 1.42% and Sumitomo Mitsui Financial shed 1.44%.
Trading companies ended weaker. Mitsubishi Corp. fell 2.58%, Mitsui & Co., lost 3.00%, Sumitomo Corp shed 2.41%, Toyota Tsusho Corp slipped 1.33% and Itochu Corp. declined 1.62%.
Automotive stocks also slipped on profit taking. Toyota Motor Corp. lost 2.42%, Honda Motor slumped 4.10%, Suzuki Motor shed 1.31% and Nissan Motor declined 2.20%.
Among shipping stocks, Nippon Yusen lost 2.40% and Mitsui OSK Lines fell 1.51%. Kawasaki Kisen however remained unchanged from previous close.
In retail space, Fast Retailing edged down 0.70%, J Front Retailing slipped 1.13%, Seven & I Holdings lost 2.13% and Aeon & Co., fell 1.31%.
In Australia, the benchmark S&P/ASX200 Index advanced 11.10 points, or 0.26%, to close at 4,343, and the All-Ordinaries Index ended at 4,346, representing a gain of 11.50 points, or 0.27%.
Data compiled by Westpac and Melbourne Institute revealed that the consumer sentiment index for the month of August rose 3.7% from the previous month, the highest monthly rise since October 2007. According to the report, the index rose to a seasonally adjusted 113.4 points in August from 109.4 points recorded for the month of July. In annual terms, the consumer index rose to a seasonally adjusted 31.6%, the report revealed.
In a separate report, the Australian Bureau of Statistics revealed that wages growth stalled in the previous quarter. The report revealed that wages, excluding bonuses, rose a seasonally adjusted 0.8% during the second quarter, the same as reported for the preceding first quarter. Year-over-year, wages rose 3.8% during the second quarter, the report stated.
Commonwealth Bank of Australia reported a 1% drop in its annual profit in line with market expectations. The bank further noted that the outlook for the year remains challenging, anticipating a slowdown in credit growth amid expectations of rise in interest rates. The stock gained 3.16%. Westpac Banking advanced 1.35%. However, ANZ Bank slipped 0.46% and National Australia Bank shed 0.65%.
Oil stocks ended in negative territory after the price of crude oil ended below the $70 a barrel mark in New York on Tuesday. Woodside Petroleum lost 0.96%, Santos fell 0.83%, Oil Search shed 0.37% and Origin Energy slipped 0.27%.
Mixed performance was witnessed among the metal and mining stocks. BHP Billiton gained 1.04%, Fortescue Metals advanced 3.33%, and Gindalbie Metals rose 2.35%. However, Rio Tinto edged down 0.17%, Iluka Resources fell 2.57%, Minara Resources lost 5.26% and Oz Minerals dropped 2.21%.
Gold stocks ended mixed. While Lihir Gold added 0.76%, Newcrest Mining edged down 0.17% and Sino Gold slipped 0.52%.
In Hong Kong, the Hang Seng Index sharply declined 3.03% or 638.97 points and closed at 20,435, taking cues from Shanghai where stocks slipped more than 4.5% on profit taking Valuation concerns also impacted sentiment as traders preferred to lock-in gains and move to the sidelines ahead of the FED decision later in the the day.
Of the 42 components in the index, only four stocks managed to end in positive territory, with the rest ending in the red, on profit taking and valuation concerns.
Resource related stocks fell sharply as commodity prices declined in the international market on Tuesday. Aluminum Corp. of China, or CHALCO, slumped 4.85%, PetroChina lost 4.77% and CNOOC fell 4.05%.
Property and banking stocks also ended weaker on valuation concerns. Among banks, HSBC Holdings slumped 4.71%, BOC Hong Kong fell 3.77% and Bank of Communications lost 2.05%. All the property stocks ended sharply lower on valuation concerns.
In South Korea, the benchmark KOSPI Index ended in the negative territory with a loss of 13.86 points, or 0.88% to close at 1,565. Traders preferred to lock in gains after recent rally, ahead of the FED announcement later in the day. Automakers, banks and technology stocks ended weaker as foreign institutional investors unloaded the stocks on profit taking.
In India, expectations that strong momentum in industrial output could help mitigate the effects of a poor monsoon helped the stock market recover most of its early loss. The benchmark Sensex closed at 15,020, down 54 points or a modest 0.36% from its previous close. The S&P CNX Nifty recouped most of its early loss and finished at 4,458, down 14 points or 0.31%.
Among the other major markets in the region, China's Shanghai Composite Index slumped 152.01 points, or 4.66% to close at 3,113, Singapore's Strait Times Index shed 25.99 points, or 1.00% to close at 2,571, Indonesia's Jakarta Composite Index declined 51.92 points, or 2.16% to close at 2,347, and Taiwan's Weighted Index fell 10.12 points, or 0.15%, to close at 6,899.
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