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%.
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.
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.
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.
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.
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%.
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.
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.