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Hang Seng Index and ASX 200: Real Estate Woes and Mining Losses Drag Markets Down

By:
Bob Mason
Published: Sep 2, 2024, 04:23 GMT+00:00

Key Points:

  • Nasdaq and S&P 500 gain over 1%, driven by investor focus on inflation and robust US economic data.
  • China's Caixin Manufacturing PMI offers relief, rising to 50.4, indicating improving demand environment.
  • Hang Seng drops 1.75% on real estate sector woes, with Mainland China equities also under pressure.
Hang Seng Index

In this article:

US Equity Markets Gain as Inflation Remains in Focus

On Friday, August 30, the US equity markets had a positive end to the week, as investors monitored inflation data.

The Nasdaq Composite Index and the S&P 500 saw gains of 1.13% and 1.01%, respectively, while the Dow rose by 0.55%.

US Economic Indicators Raise Rate Cut Bets

On Friday, August 30, US economic indicators gave investors reason to cheer. Upward trends in personal income and spending indicated a robust US economy. Furthermore, softer-than-expected inflation supported bets on a 25-basis point September Fed rate cut.

The US Core PCE Price Index increased by 2.6% year-on-year in July, after a 2.6% rise in June.

US inflation trends support Fed rate cut bets.
FX Empire US Core PCE Price Index

China Manufacturing PMI Brings Relief

On Monday, September 2, Manufacturing PMIs from Australia, China, and Japan drew investor interest. However, China’s Caixin Manufacturing PMI was a crucial data release amidst ongoing uncertainty about the demand environment.

The Caixin Manufacturing PMI increased from 49.8 in July to 50.4 in August.

Softer Yen Boosts Demand for Nikkei Index-listed Stocks

On Friday, August 30, the USD/JPY gained 0.79%, closing the session at 146.126, and continued to trend higher on Monday, September 2.

The softer Japanese Yen could boost buyer demand for Nikkei-listed export stocks benefitting from overseas earnings.

Early in the Monday morning session, the Jibun Bank Manufacturing PMI increased from 49.1 in July to 49.8 in August, up from a preliminary 49.5. The higher PMI may indicate an improving macroeconomic environment, possibly raising bets on a Q4 2024 Bank of Japan rate hike.

However, a dovish Fed rate path and expectations of a US soft landing remain tailwinds.

Hang Seng and Mainland China Equities Slide Amid Real Estate Concerns

Hang Seng Index sees red.
HSI 020924 Daily Chart

The Hang Seng Index was down 1.75% on Monday morning. Real estate and tech stocks were leading the decline.

The Hang Seng Mainland Properties Index tumbled by 4.65% after New World Development Co. Ltd.’s (0017) forecast a $2.6 billion loss for the 2024 financial year. New World Development shares were down 13.25%.

The Hang Seng Tech (HSTECH) was down 1.92%, with Tencent (0700) and Alibaba (9988) losing 1.44% and 1.96%, respectively. Baidu (9888) fell by 1.33%.

The Mainland equity markets were also under pressure, with the CSI 300 and the Shanghai Composite Index falling by 1.15% and 0.56%, respectively.

Nikkei Index Bucks the Market Trend

Nikkei gains on Yen weakness.
Nikkei 020924 Daily Chart

The Nikkei Index gained 0.16% on Monday morning. Further signals of a US soft landing drove demand for the USD/JPY pair, supporting Nikkei Index-listed stocks.

Tokyo Electron Ltd. (8035) and Softbank Group Corp. (9984) were up by 0.45% and 0.55%, respectively, while Nissan Corp. (7201) advanced by 0.85%.

ASX 200 Falls as Gold and Iron Ore Prices Slide

ASX 200 declines on falling gold and iron ore spot prices.
ASX 200 020924 Daily Chart

The ASX 200 Index was down 0.20% on Monday morning, with gold and mining stocks leading the decline.

Northern Star Resources Ltd. (NST) fell by 1.64% after gold prices declined by 0.71% on Friday. Mining giants BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) were down 1.15% and 1.69%, respectively. Iron ore spot extended its losses from Friday, tumbling 3% on Monday, impacting demand for mining stocks.

Investors should remain alert, with central bank commentary pivotal as the US Personal Income and Outlays Report looms. Closely monitor the news wires, real-time data, and expert commentary to manage trading strategies accordingly. Stay informed with our latest news and analysis to manage positions across the Asian equity markets.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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