Tuesday, 05 May, 2015
(Bloomberg) — Chinese stocks fell on concern recent gains were excessive, while Indonesia’s rupiah weakened after the economy contracted. Australia’s currency rose amid speculation the central bank will refrain from further interest-rate cuts. The Shanghai Composite Index retreated 2.3 percent by 1:05 p.m. in Hong Kong and the Hang Seng China Enterprises Index fell 2.4 percent. The S&P/ASX 200 Index dropped in Sydney as the Australian dollar strengthened 0.9 percent. The rupiah slid 0.4 percent, while the Bloomberg Commodity Index lost 0.2 percent. Chinese investors sold some of this year’s best-performing stocks amid concern a flood of new share sales and government measures to curb speculation will weigh on the world’s biggest rally. While the Reserve Bank of Australia reduced its benchmark rate by a quarter point to 2 percent, policy makers removed language on the possibility of further easing from their statement Tuesday. “The market is interpreting the statement as the RBA being on hold for the foreseeable future,” said Sue Trinh, senior currency strategist at Royal Bank of Canada in Hong Kong. “There were further rate cuts built into the curve. With this statement there may be a bit of unwinding in those expectations.” Data on U.S. trade and service industries is due Tuesday, with traders looking ahead to Friday’s payrolls numbers amid speculation over the timeline for U.S. rates. Markets in Japan, South Korea and Thailand are closed for holidays. Chinese Markets Hong Kong’s Hang Seng Index slid 1.4 percent, extending losses to a fourth day. The Shanghai Composite Index has more than doubled in the last 12 months. Stocks also fell amid concern more market-cooling measures may be in the offing. Two brokerages increased margin-trading and short-selling requirements, the Shanghai Securities News reported, without citing anyone. China may increase the stamp tax on stock trades, the Securities Times reported, citing a research note from Changjiang Securities Co. Disappointing Chinese factory data Monday “suggest continued downside risks to the Chinese economy that in our view warrant additional government intervention,” Tal Shapsa, a New York-based economist at Barclays Plc., wrote in an e-mailed note. Eight of the 10 industry groups on the Asia-Pacific stock gauge that excludes Japan retreated today. Australia & New Zealand Banking Group Ltd. jumping as much as 4.2 percent, the most in two years, after saying cash profit, which excludes one-time items, climbed to a record A$3.68 billion ($2.89 billion). Aussie Rates The Aussie dropped as much as 0.6 percent immediately after the RBA announcement, before trading at 79.10 cents. The currency slipped 2.3 percent over the past four trading days. A majority of economists surveyed by Bloomberg predicted the reduction. Investors shouldn’t fight stimulatory central bank policy in the U.S., Europe, Japan and China because it’s usually bullish for stocks, David Tepper, who runs the $18 billion Appaloosa Management LP hedge fund, said at a conference in New York Monday. The Jakarta Composite Index erased a gain of as much as 1.2 percent after gross domestic product fell 0.18 percent in the first quarter from the preceding period, missing economist estimates for a 0.25 percent gain. U.S. equity-index futures were little changed. The Standard & Poor’s 500 Index’s Monday gains extended its 1.1 percent jump from Friday, the biggest one-day increase since the end of March. The Russell 2000 Index, a gauge of small-cap shares that slipped 2.6 percent in April, climbed 0.4 percent after adding 0.7 percent on Friday. The Dow Jones Industrial Average was up 0.3 percent, about 1.2 percent away from its own record high. Treasuries extended their slide Monday as a selloff in European bonds diminished the appeal of their relatively higher rates. Yields on 10-year U.S. notes added three basis points to 2.15 percent, the highest level since March 9. Disclaimer The information contained in this communication from the sender is confidential. It is intended solely for use by the recipient and others authorized to receive it. If you are not the recipient, you are hereby notified that any disclosure, copying, distribution or taking action in relation of the contents of this information is strictly prohibited and may be unlawful. This email has been scanned for viruses and malware, and may have been automatically archived by Mimecast Ltd, an innovator in Software as a Service (SaaS) for business. Providing a safer and more useful place for your human generated data. Specializing in; Security, archiving and compliance. To find out more visit the Mimecast website.