Market Update
Asian markets ended lower Monday barring the Sensex which extended gains after last week's much-anticipated victory for the Bharatiya Janata Party which is now set to form the new Indian government.
The Nikkei closed down 0.6%. The Shanghai Composite fell 1.1% while the Hang Seng ended flat. The Sensex closed up a percent. The All Ordinaries dropped 1.3%.
In Tokyo, data showed machinery orders in March soundly beat expectations for a 6% gain, as they surged more than 19.1%, up from drop of 8.8% in February.
However, in China, data over the weekend showed decelerating property prices in April, and property stocks nosedived.
Markets in India were upbeat as Prime Minister designate Narendra Modi made a couple of speeches over the weekend reiterating his development plank on which he arguably won the elections and started by announcing his intention to launch a massive drive to clean up the country's Ganges river from the city of Varanasi downwards, also a major tourist hotspot.
The rupee also rallied as it opened just above the 58 level, its strongest since June last year. Overseas investors bought shares worth 36.34 billion rupees on Friday, according to provisional data from the Bombay Stock Exchange.
Stocks on the Move
Industrials ended lower despite the upbeat data in Japan. Kawasaki Heavy fell 1.6% while Mitsubishi Heavy was down 1.8%. Fanuc Corp. edged down 0.2%.
Hitachi ended 3.5% lower while Sakai Heavy dropped 5.6%.
Softbank was down 1.9% after the company said it would issue 300 billion yen in new bonds with plans to spend the funds on future investments and acquisitions.
Nomura was up 0.7% on a Nikkei report the company plans to set up a joint-venture brokerage in the Shanghai Free-Trade Zone.
Tokyo Electron was a major gainer, up 5.4% as it benefitted from an upbeat sentiment for chipmakers after strong earnings from Taiwan’s TSMC.
Among property counters in Shanghai, Poly Real Estate was down 0.9% while Gemdale Corp. reversed losses and ended 1.3% higher.
In Hong Kong, China Overseas Land & Investment and Beijing Properties both fell 1.3% each, respectively. China Resources Land retreated 1.4% while Sun Hung Kai Properties declined a percent. Henderson Land Development declined 0.4%.
State-run travel major China Travel International Hong Kong fell 1.9% after the company said its Chairman is under investigation for suspected violations of party law and discipline.
Among the gainers in Mumbai, domestic stocks were very much the flavor with state-owned BHEL shooting up 16.9% after the firm said it signed an initial agreement with Indonesia’s PT Star Vyobros for setting up a 200 MW coal-fired plant in the island nation.
Infrastructure stocks and resources were among the top gainers with markets hopeful the new BJP government would kick-start a hitherto stagnant investment cycle.
Coal India surged 12.7% while NTPC rose 10.4%. ONGC was up 9.2% and Tata Power surged 8%. Hindalco was up 7.8% while L&T and SBI gained 6.9% and 6.5% each, respectively.
SSLT rose 5.9% and Axis Bank and Gail India closed up 5.6% and 5.1% each, respectively.
RIL and HDFC both ended over 3% higher.
Defensives such as FMCG and health-care lagged. Technology stocks also fell as the rupee got stronger, hitting an eleven-month high at 58.38 to the dollar on hopes of continued foreign buying in Indian shares after the BJP swept the elections.
TCS led losses, down 5.7% while Infosys fell 4.9%.
ITC and Dr. Reddy’s Labs were down 5.5% and 5.2% each, respectively.
Miners were a drag on the Aussie index after a fall in spot iron-ore prices. Index leader BHP Billiton was down 1.7% while Rio Tinto ended 3% lower. Fortescue Metals dropped 4.6% while Atlas Iron gave up 1.3%.
BlueScope Steel weakened 3.7%.
Among the few gainers, Goodman Fielder rose 3.8% after the company said it would recommend the improved takeover offer from Singapore’s Wilmar and Hong Kong’s First Pacific.