Hang Seng Index, ASX 200, Nikkei 225: Alibaba Delivers Early HSI Gains

US Equity Markets Hit New Highs as the Tech Sector Marches Higher

On Monday (June 17), 10-year US Treasury yields rose by 58 basis points to 4.281%. Nevertheless, the tech sector continued to send buy signals on investor expectations of a September Fed rate cut. The Nasdaq Composite Index and S&P 500 advanced by 0.95% and 0.77%, respectively. Furthermore, the Dow gained 0.49%.

However, US Futures had a mixed start to the Tuesday (June 18) Asian session. The Dow mini was up 19 points, while the Nasdaq mini and S&P 500 mini dropped 24 and 2 points, respectively.

French Election Jitters, China, and the RBA

Investor jitters about a far-left or right victory in the French elections subsided. The DAX and the EUR/USD trended higher on Monday as investors reacted to Marine Le Pen saying she would not call for Macron to resign in the event of a far-right victory.

Nevertheless, concerns about the Chinese economy lingered after mixed economic indicators from Monday. However, uncertainties failed to overshadow the positive sentiment from the US session. Sentiment could deteriorate if China retaliates against the EU tariffs on EV imports from China.

The Hong Kong and Mainland China equity markets trailed the broader Asian equity markets, reflecting ongoing concerns about the Chinese economy.

Later this morning, the RBA interest rate decision and press conference warrant investor attention. The ASX 200 sits in the hands of RBA Governor Michele Bullock.

However, investors will likely look ahead to the US economic calendar. US retail sales and Fed speakers may influence investor expectations of a September Fed rate cut. Six FOMC members are on the calendar to speak on Tuesday.

Hang Seng Index Climbs Higher on Tech Stock Gains

It was a positive Tuesday morning session for the HK and Mainland China equity markets. The Shanghai SE Composite and CSI 300 rose by 0.05% and 0.15%, respectively, with the Hang Seng Index gaining 0.24%.

The real estate and tech sectors trended higher, with hopes of further stimulus support from Beijing lingering. The Hang Seng Mainland Properties Index (HSMPI) was up 0.05%. Furthermore, the Hang Seng Tech Index (HSTECH) gained 0.58%.

Alibaba (9988) and Tencent Holdings (0700) rose by 0.48% and 0.26%, respectively. However, Baidu (9888) bucked the trend, declining by 1.88%.

Nikkei Higher on Weaker Yen and BoJ Rate Path Bets

The Nikkei Index was up 0.98% in the Tuesday morning session. The USD/JPY hovered above the 157.5 handle. Investor sentiment toward the BoJ interest rate trajectory affected buyer demand for the Yen, driving support for Nikkei-listed stocks. Bank of Japan Governor Kazuo Ueda spoke on Tuesday, saying a July BoJ rate hike would be data-dependent.

Tokyo Electron Ltd. (8035) rallied 2.41%, with Fast Retailing Co. Ltd. (9983) gaining 0.73%. Furthermore, KDDI Corp. (9433) and Softbank Group Corp (9984) advanced by 0.02% and 0.05%, respectively.

However, Sony Group Corporation (6758) bucked the trend, falling by 0.35%.

ASX 200 Higher in Pre-RBA Trade

The ASX 200 rose by 0.91% on Tuesday morning. Iron ore spot and WTI crude oil price trends drove buyer demand for mining and oil stocks.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) saw gains of 0.30% and 0.27%, respectively.

BHP Group Ltd (BHP) and Rio Tinto Group Ltd. (RIO) advanced by 0.62% and 0.61%, respectively. Fortescue Metals Group Ltd. (FMG) bucked the trend, sliding by 4.50% on news of a block trade.

Tech stocks tracked the Nasdaq Composite Index higher. The S&P/ASX All Technology Index gained 0.44%.

However, gold (XAU/USD) and bank stocks also contributed to the gains.

Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) increased by 0.67% and 0.56%, respectively.

Commonwealth Bank of Australia (CBA) rallied 1.55%, with National Australia Bank Ltd. (NAB) advancing by 1.19%. Westpac Banking Corp. (WBC) and ANZ Group Holdings Ltd. (ANZ) rose by 0.85% and 1.06%, respectively.

The markets expect the RBA to stand pat this morning, with recent economic indicators supporting a near-term hold on interest rates.

For upcoming economic events, refer to our economic calendar.