NAB’s Axa bid offers brief respite

Deal news lifting Australian stocks was a rare bright spot on Thursday as the Asian region suffered its worst falls for nearly two weeks.

A mood of caution prevailed on concerns that stimulus measures globally might be removed earlier than expected following the US Federal Reserve’s upbeat tone on the economy.

The FTSE Asia-Pacific index fell 0.95 per cent to 225.88 but the S&P/ASX 200 index in Sydney was among the few gainers, advancing 0.2 per cent to 4,670.30.

Sparking heavy activity after weeks of thin volumes was National Australia Bank’s A$13.3bn bid for insurer Axa Asia Pacific, which trumped an earlier A$12.85bn offer from Australian wealth manager AMP and Axa, the target’s French parent.

“We were expecting a flat day but the NAB bid for Axa has shaken the market up,” said James Foulsham, head of trading at CMC Capital Markets. “It has driven a lot of activity around Axa and AMP.”

Axa Asia Pacific’s shares were the chief beneficiary, surging 12.7 per cent to A$6.37, trading just below NAB’s offer of A$6.43 a share. NAB shares fell back 4.7 per cent to A$26.65 as some fund managers cautioned that it was offering a hefty price for the insurer. AMP, meanwhile, gained 4.1 per cent to A$6.35.

Resource stocks lifted the Sydney benchmark as higher metals prices helped buoy the miners. BHP Billiton rose 0.9 per cent to A$41.41 and Rio Tinto 1.2 per cent to A$71.65.

The dollar’s surge after the Fed meeting boosted Japanese exporters with the Nikkei 225 Average reaching seven-week highs early in the session. It closed down 0.1 per cent at 10,163.80 as investors took profits after the previous day’s surge in bank stocks. The broader Topix fell 0.2 per cent to 896.28.

“The Nikkei is at a technically crucial level,” said Shinji Igarashi, of Chuo Securities. “Unfortunately the market does not have enough energy to boost the Nikkei [above 10,200], failing to react strongly to positive factors such as the weaker yen.”

Japanese banks were lifted on Wednesday on reports that global banking regulators would allow a long grace period for the boosting of capital ratios but they lost ground on Thursday on concerns that the gains were excessive.

Mitsubishi UFJ Financial Group fell 1.3 per cent to Y464 and Sumitomo Mitsui Financial Group was down 1.5 per cent at Y2,985.

Enjoying better fortunes on the back of the weaker yen were exporters TDK, which climbed 1.3 per cent Y5,390, and Advantest Corp, rising 1.6 per cent to Y2,185.

Mazda Motor jumped 2.5 per cent to Y208 on reports that it was set to work with Toyota Motor, flat at Y3,760, on new hybrid technology.

The Shanghai Composite lost 2.3 per cent to 3,179.078, its lowest close in three weeks, as the prospect of heavy share issues hurt sentiment. China First Heavy Industries is the latest to gain approval from regulators for an IPO aimed at raising Rmb39bn ($5.7bn).

But Wednesday’s tepid debut for China Shipbuilding Industry reflected a more cautious investor attitude to new issues. on Thursday its shares sank 6.6 per cent to Rmb7.75, still above its Rmb7.38 flotation price.

The Hang Seng index fell for a third successive day as the Hong Kong Monetary Authority, the city’s central bank, warned of possible reverses of fund flows and consequent “sharp corrections” in asset prices. The benchmark fell 1.2 per cent to 21,347.63 and the index of Chinese companies listed in Hong Kong, or H shares, fell 1.5 per cent to 12,501.20.