Asia-Pacific markets tumbled on the first trading day on new month, Tuesday, November 01, 2011, with the Thomson Reuter Asia-Pacific index dropped 1.56% at 157.63 while the MSCI Asia index (excluding Japan) declined 1.97% at 488.16, as risk aversion selloff intensified across the corner on heightening fears over on EU debt crises following the Greek PM's decision to seek a referendum on the latest EU bailout plan. Meanwhile unexpected weakness in Chinese factory activity and overnight fall on the Wall Street and commodities further hammered on risk.
Risk aversion selloff dominated the market following renewed uncertainty regarding the debt problems in Greece after the Greek Prime Minister George Papandreou unexpectedly call for a referendum to approve the European Union's new bailout deal for the country, triggering questions whether Greece would continue with its reforms and fulfill its debt obligation required by international lenders or else the country will default on its debt.
The euphoria over euro zone's plan to tackle its debt crisis started to fade, with Italian and Spanish bond yields continued upward move ahead of a meeting of Group of 20 leaders later in the week. Investors started to have doubt about the rescue plan as details are yet to be released and implementation would be difficult.
Selloff was also fueled on tracking negative finish of offshore markets. The European and U.S. markets finished sharply lower on Monday after U.S. futures broker and bond dealer MF Global Holding with large exposure on the eurozone sovereign debt filed for bankruptcy, triggering fears that more financial institutions would collapse.
The China Federation of Logistics and Purchasing (CFLP) official purchasing managers index (PMI) fell to 50.4 in October from September's 51.2, reviving fear to the world's No. 2 economy from a sagging global backdrop. The federation also expected China's economic growth to slow down further in the last quarter of 2011 to post full-year GDP growth of about 9.2%.
Back to countries, the Japanese sharemarket ended weaker, with the benchmark Nikkei Stock Average retreated 1.7% at 8,835.52 on Tuesday, November 01, 2011, registering second day of consecutive losses, as risk aversion selloff dominated the market following renewed uncertainty regarding the debt problems in Greece after the Greek Prime Minister now call a referendum regarding the austerity measures needed for any bailout. Meanwhile weaker reading on Chinese manufacturing and yen appreciation against the dollar and the euro further deteriorated risk sentiments.
Export related companies were lower on profit taking after yen resumed appreciation against the dollar and the euro ad other major currencies in today trade. Sony Corp fell 6.3% to 1,576 yen and Canon Inc 1.3% to 3,555 yen. Panasonic Corp closed 5.1% down at 768 yen, extended yesterday losses of 2.1% after the electronic company forecasted to suffer a 300 billion yen net loss in the year to March 2012.
Marine transportation stocks suffered steep losses today on tracking overnight falls in shipping freight rate index. The Baltic Dry index has lost 2.63% to 1,965 on Monday. Nippon Yusen KK fell 3% to 195 yen and Kawasaki Kisen Kaisha 3.1% to 158 yen.
Nomura Holdings Inc. declined 3.3% to 294 yen after announcing disappointed July-September period earnings report. The Tokyo-based securities house reported a 46.1 billion yen net loss in the quarter ended September, compared with a net profit of 17.8 billion yen in the June quarter.
In Australia, the Australian stockmarket finished first trading session of new month with weak note, dragging the benchmark All Ordinaries Index down by 1.45% at 4,297.20, as investors moved to book recent gains following a weak session on offshore markets overnight, unexpected weakness in Chinese factory activity, and renewed concerns about euro-zone economy.
Materials and resources were worst performer, with BHP Billiton declined 2.7% to A$36.77 and Rio Tinto 3% to A$67.15. Gold miners were lower, suffered by steep pullback in bullion prices. Newcrest Mining sank 1% to A$33.20.
The Reserve Bank of Australia lowered its key cash rate by 25 basis points to 4.5%, effective 2 November 2011. In its announcement, the RBA said the economy was facing moderate growth overall, with strong mining-related investment being offset by caution among households and the high exchange rate. The Bank's current judgment is that inflation is likely to be consistent with the 2% to 3% target in 2012 and 2013, abstracting from the impact of the carbon-pricing scheme, the RBA said.
The Reserve Bank of Australia's (RBA) index of commodity prices fell by 3.9% (on a monthly average basis) in SDR terms, after falling by 1.4% in September (revised). The largest contributors to the fall in October were declines in the estimated export prices of coking coal and iron ore, reflecting weaker spot prices and a decline in contract prices. Gold and base metals prices, as well as the prices of most rural commodities, also fell in monthly average terms. In Australian dollar terms, the index fell by 3.2% in October. Over the past year, the index has risen by 19% in SDR terms. Much of this rise has been due to the earlier increases in iron ore, coking coal and thermal coal export prices. Reflecting the appreciation of the exchange rate, the index has risen by 16% in Australian dollar terms over the past year.
In China, the Shanghai Composite index closed tad 1.77 points, or 0.07%, higher at 2,470.02, after zigzagging in and out between boundary line in the afternoon, as negativity on worse-than-expected manufacturing activity report offset by renewed expectations of loosen tightening measures to cope with its slowing economy.
Chinese market commenced trade with weak note, with the Shanghai Composite index starting a day at 2,450.33, tad lower from yesterday finishing at 2,468.25 following a weak session on offshore markets overnight. Shanghai Composite index managed to recoup initial losses and rises as high as 2,491.35 in early morning on speculation that the government will soon ease monetary policies after slowdown in the nation's manufacturing growth, but failed to sustain rising momentum and erased entire gains to finish morning session at 2,468.49. Benchmark index moved sideways in the afternoon session to finish at 2,470.02.
The Ministry of Finance said on Monday that China would levy a resource tax on crude oil and natural gas products at 5% of sales nationwide starting from Tuesday. The ministry also released specific resource tax rates on a variety of other commodities, including iron ore, coking coal and rare earth ore, for which the tax will remain based on sales volumes.
Materials and resources players were major drag on the market, after the Purchasing Managers' Index slid to 50.4 in October, the lowest since February 2009. Jiangxi Copper slumped 0.6% to 27.86 yuan and Aluminum Corp 0.89% to 8.33 yuan.
Realty stocks went lower, extended yesterday fall on concerns over slower investment and sales growth. Poly Real Estate slid 3.5% to 9.95 yuan, China Vanke 3% to 7.76 yuan, and Gemdale Corp 3.5% to 4.99 yuan.
Brokerages rose on expectations of higher revenue after China announced plan last week to expand a trial scheme for margin trading and short selling.
Haitong Securities gained 2.1% to 9.29 yuan, Citic Securities 1.3% to 12.15 yuan, and Guoyuan Securities 1% at 10.71 yuan.
In Hong Kong, the benchmark Hang Seng index tumbled 2.49% to 19,369.96, registered second losses day of losses in row, as risk aversion selloff took front seat following a weak session on offshore markets overnight, unexpected weakness in Chinese factory activity, and renewed fears about euro-zone debt problems.
Among Hang Seng Blue-Chips, HSBC slipped 3.9% to HK$67.2. Standard Chartered dipped 4.5% to HK$179.5. ChinaMobile was up 0.6% to HK$75.1. Macau gaming stocks were firmer after the government announced that its October gaming revenue hit a new record, with Galaxy gained 0.7% to HK$16.26 and Wynn Macau put on 0.4% to HK$22.35.
The Census and Statistics Department announced on Tuesday, Nov. 1, that the value of total retail sales in September, provisionally estimated at HK$31.2 billion, rose 24.1% over a year earlier. After netting out the effect of price changes over the same period, the volume of total retail sales grew 15.2% in September from a year earlier. The revised estimate of the value of total retail sales in August 2011, at $34.3 billion, increased by 29.0% over August 2010, while the volume of total retail sales increased by 20.7%.
In the separate report, the Census and Statistics Department announced today the value of total receipts of the restaurants sector was HK$22.3 billion in the third quarter of 2011, up by 6.2% over the third quarter of 2010. Over the same period, the value of total purchases by restaurants increased by 9.7% to $8.0 billion. After discounting the effect of price changes, total restaurant receipts rose by 0.5% in volume in the third quarter of 2011 as compared to a year earlier.
In India, In India, the Bombay Stock Exchange SENSEX30 closed 1.21% down at 7,491.04, joining other Asian bourses, on renewed fears of eurozone sovereign debt crisis after Greek Prime Minister George Papandreou's announcement to hold a referendum on latest bailout plan. Also weak Chinese manufacturing data added to the negativity. All sectoral indices were in the red with realty, auto, metal, and banks shares bore the brunt of the selling.
Indian metal players declined as LMEX, a gauge of six metals traded on the London Metal Exchange, fell 1.57% to $3,526.10 on Monday, 31 October 2011. Shares of steel makers were hit after credit rating firm Standard & Poor's downgraded Korean steel giant Posco to A- from A with a negative outlook. Index heavyweight Reliance Industries fell after the company refuted speculation that it is considering acquiring Valero Energy, Inc.
Among other Asian bourses, the Malaysia KLSE declined 1.09% to 1,475.64. The New Zealand NZX edged up 0.01% to 3,332.77. Singapore Strait Times index fell 2.33% to 2,789.35. Indonesia Jakarta Composite index was down 2.79% to 3,685.01. The South Korea KOSPI edged up 0.03% to 1,909.63. The Taiwan TAIEX index added 0.45% to 7,622.01.