INGOT Brokers AU | Asian market report (2017-06-26)

Asian market report (2017-06-26)

Asian equity markets began the week in the green supported by the rebound in energies and the rising optimism for global growth as well as the slightly weaker US Dollar, despite news that Takata had filed for bankruptcy.

The Australian dollar edged higher by 0.05 percent to $0.7569 supported by the rebound in oil prices from their 10-months low while the Japanese Yen was marginally down by 0.1 percent at 111.235 yen moving further away from a near one-month high of 111.790 touched last Tuesday.

Moreover, the Chinese Yen weakened for the eighth consecutive session against the US dollar on Monday despite a firmer midpoint set by China's central bank at 6.822 per dollar prior to market open, firmer than the previous fix 6.8238.

Chinese equities rose on Monday’s trading session, led by the blue-chip index advancing to a record high since 2016, after the MSCI chief said the index provider could raise its weighting of China A-shares.

The Shanghai SE 50 Index that tracks the 50 most representative blue-chips in the Shanghai Stock Exchange, moved up 0.56 percent to an 18-month high gaining 14.2 points to settle at 2,543.32, while the Shanghai Composite Index gained 0.87 percent, to 3,185.44 points.

MSCI's decision to add 222 China-listed large-cap stocks to its Emerging Markets Index , tracked by around $1.6 trillion, has already fuelled a buying spree for blue-chips on the Chinese mainland.

Sectors rose across the market with the top performing real estate sector jumped 3.1 percent to a six-month high, led by bellwether China Vanke which surged 6.4 percent after a 10 percent gain the previous session.

Furthermore, the banking index gained 0.6 percent, after the nation's top banking regulator told banks to push forward with reform.

Elsewhere in Japan, the market also settled higher with its stock market index Nikkei 225 adding 0.10 percent to end at 20,153.35.

Japan’s automakers closed mixed following statements from Toyota and Nissan, among others, which said it could be difficult to recover recall costs from Takata. Toyota shares closed down by 0.38 percent, but Nissan shares were 0.19 percent higher, as auto parts manufacturer Takata has filed for bankruptcy in Japan and the US.

The faulty air bags produced by Takata have resulted in the largest-ever product recall in the auto industry, with at least 17 deaths linked to the scandal. Shares of the company have been suspended from trade on the Tokyo Stock Exchange and were set to be delisted on July 27.

Meanwhile, shares of Toshiba closed down by 3.12 percent following news the stock had been reassigned to the second section of the Tokyo Stock Exchange from the first section.

Moreover, the signs that interest rates would remain low continue to weigh on Japanese financials sector, said Hisao Matsuura, chief strategist for equities at Nomura Japan.

The Bank of Japan’s opinion summary on Monday said the best way to reach 2% inflation is to stick to current monetary policy.

Australian equities were mixed on today’s trading session, with its stock market index ASX 200 settling mostly flat at 5,720.16 gaining 0.08 percent despite the gains during the early parts of the session.

The major movers in the mining sector, which is helped by the Stabilization in commodities,  were BHP Billiton edged up 0.2%, Fortescue Metals Group rose 0.6% and Rio Tinto gained 1.3% after Glencore on Friday sweetened its all-cash offer for the bulk of Rio's Australian coal assets. However, Newcrest Mining lost 1.1% as London gold prices eased after Friday's gains.

While the banking sector remains under pressure after the South Australia government announced a new tax on ANZ, Commonwealth Bank, Westpac, National Australia Bank and Macquarie. The move comes after the federal government announced a levy on the country's largest banks last month.

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