News Column

Asian Stocks Pare Early Gains As BOJ Keeps Policy Steady

April 30, 2014

CANBERA (Alliance News) - Asian stocks rose broadly on Wednesday, although gains were capped ahead of the Federal Reserve's policy meeting tonight and US non-farm payrolls data due on Friday. While upbeat US earnings news and easing concerns over the Ukrainian conflict helped to bolster sentiment, the reluctance on the part of the Bank of Japan to expand its stimulus program despite tepid data and a recent sales tax hike rendered investor mood somewhat cautious.

Japanese shares closed modestly higher, paring early gains, after the Bank of Japan kept its monetary policy steady and refrained from expanding monetary stimulus, underscoring its conviction that inflation will head steadily towards its 2% target. The central bank reiterated its view that the economy is on the path to recovery, dampening speculation on additional monetary easing in the near term. The benchmark Nikkei average rose as much as 0.9% earlier in the day before paring gains to end up 0.1% at 14,304, while the broader Topix Index gained 0.2%.

In stock-specific action, SoftBank Corp. rose half a percent after Sprint Corp., which is 80% owned by the Japanese wireless carrier, reported improving operating performance for the quarter ended March and boosted its full-year forecast. Kyocera Corp rallied 3.4%. The electronics and solar-panel maker reported a 34% increase in annual profit, beating estimates. Honda Motor rose 2% on bargain hunting after tumbling 4.5% on Monday.

In economic news, Japanese industrial output rose 0.3% in March from the previous month, below analyst forecasts for a 0.5% gain, official data showed.

China's Shanghai Composite Index closed up 0.3% at 2,026 as liquidity fears receded. Trading volumes, however, were relatively light ahead of the long weekend and Chinese manufacturing data due tomorrow. The Chinese market will be closed on Thursday and Friday for public holidays.

Hong Kong'sHang Seng Index tumbled 1.4% to finish at 22,134 as investors locked in some profits after recent gains. Heavyweight Tencent Holdings plummeted 5.2% on concerns strict censorship for television and films will negatively affect its revenue.

Australian shares ended a volatile session flat on concerns about slower growth in the world's second-largest economy after a Chinese think-tank downgraded its 2014 GDP growth forecast to 7.4% from the official 7.5% target. The benchmark S&P/ASX 200 closed up 0.05% at 5,489. Banks fell broadly, with ANZ closing down 0.4% ahead of its half-yearly results on Thursday, while Commonwealth slid marginally, NAB lost 0.6% and Westpac shed 0.8%.

QBE Insurance tumbled 2% before the conversion of debt securities into ordinary shares in June. Big miner BHP Billiton rose 0.4%, Rio Tinto gained 0.7% and Fortescue Metals Group added a percent. Retailer Woolworths dropped 1.9% after posting disappointing sales growth during the March quarter. Brambles fell 1.3%. The logistics firm reaffirmed its full-year profit guidance after reporting a 6% increase in sales revenue for the nine months ended March.

Seoul shares fell modestly in cautious trading ahead of the Fed decision and amid lukewarm corporate earnings. The benchmark Kospi average gave up early gains to end down 0.2% at 1,962, a five-week low. Heavyweights Samsung Electronics and Hyundai Motor fell 1.3% and 1.7%, respectively. On the economic front, South Korea's industrial production grew 0.9% in March, rebounding from a drop in the previous month on the back of strong memory chip and car exports, Statistics Korea said.

New Zealand's benchmark NZX-50 Index jumped 1.6% to a record high, with energy and tech stocks pacing gains. Meridian Energy rallied 2.5%, Vector added 2%, Mighty River Power advanced 1.5% and Contact Energy rose 1.4%. Xero soared 5.5% after the cloud accounting software firm announced a strategic alliance with New York Stock Exchange-listed H&R Block.

Diligent Board Member Services climbed 5.3% as the governance app maker filed its 2013 annual report after restating accounts for the last three years. OceanaGold soared 11% after posting record first-quarter earnings.

In economic releases, issuance of new building permits in New Zealand jumped a seasonally adjusted 8.3% in March, Statistics New Zealand said - coming in at 1,999. That follows the 1.7% decline in February. Separately, New Zealand business confidence weakened in April from the prior month, but remained at an elevated level near a 20-year high, the latest monthly ANZ business outlook survey showed.

Elsewhere, India's Sensex was down 0.6% and the Taiwan Weighted average dropped 0.9%, while the key benchmark indexes in Indonesia, Malaysia and Singapore were down between 0.3% and 0.8%.

US stocks rose overnight as investors digested upbeat earnings news from big-name companies such as Sprint and Merck and mixed economic reports on home prices and consumer confidence. The Dow and the S&P 500 rose about half a percent each, while the tech-heavy Nasdaq advanced 0.7%.

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Source: Alliance News

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