Hang Seng Index, ASX 200, Nikkei 225: Australian Retail Sales and Beijing in Focus

Highlights

• The Hang Seng Index, ASX 200, and Nikkei 225 kickstarted the week in negative territory.
• Market sentiment toward the Fed interest rate path and reaction to economic indicators from China weighed on riskier assets.
• On Tuesday, stimulus chatter from Beijing and Australian retail sales figures will be focal points.

Overview of the Monday Session

On Monday, the ASX 200, the Nikkei, and the Hang Seng Index ended the session in negative territory.

US economic indicators from Friday set the mood for the Asian Monday session. Better-than-expected US Services PMI numbers supported a pickup in 10-year US Treasury yields, which ended the Friday session up 1.36% to 4.472%. Bets on a higher-for-longer Fed rate path weighed on the Nasdaq Composite Index, which fell by 0.11%. The Dow and S&P 500 ended the session with gains of 0.33% and 0.06%, respectively.

The Asian economic calendar added to the cautious mood ahead of key US economic indicators this week. Industrial profit numbers from China signaled a weak macroeconomic backdrop. Industrial profits rose at a less marked pace in October, weighing on the appetite for riskier assets.

Australian Retail Sales and China in Focus

On Tuesday, overnight US economic indicators from Monday are unlikely to influence market risk sentiment. However, the US market moves could influence risk sentiment as investors consider upcoming US economic indicators.

On Monday, the Nasdaq Composite Index declined by 0.07%, with the Dow and S&P 500 falling by 0.16% and 0.20%, respectively. 10-year US Treasury yields fell by 1.88% to end the Monday session at 4.388%. Investor caution ahead of US stats and Fed Chair Powell left the US equity markets in negative territory.

The Asian economic calendar also needs consideration. On Tuesday, Australian retail sales could influence bets on an RBA rate hike. Economists forecast retail sales to increase by 0.1% after rising by 0.9% in September.

After the market reaction to the economic indicators from China, investors must also monitor stimulus chatter from Beijing.

In the futures, the ASX 200 and Nikkei were up 6 and 80 points on Tuesday.

ASX 200

The ASX 200 declined by 0.75% on Monday. Mining, energy, and bank stocks dragged the index into negative territory. However, gold stocks responded to an upswing in gold prices.

BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) declined by 1.46% and 1.27%, with Fortescue Metals Group Ltd. (FMG) sliding by 2.08%.

Energy stocks saw relatively modest losses. Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) fell by 0.69% and 0.57%.

Bank stocks had a mixed session. ANZ Group Holdings Ltd (ANZ) slid by 1.11%. Westpac Banking Corp. (WBC) and Commonwealth Bank of Australia (CBA) ended the day down 1.08% and 1.04%. National Australia Bank Ltd. (NAB) bucked the trend, gaining 0.18%.

However, gold stocks cushioned the downside. Evolution Mining Ltd. (EVN) and Northern Star Resources Ltd. (NST) rallied by 1.90% and 1.65%.

Hang Seng Index

The Hang Seng Index declined by 0.20% on Monday.

Alibaba (9988) slipped by 0.13%, while Tencent (0700) gained 0.50%.

Bank stocks also had a mixed session. HSCB (0005) rose by 0.67%. Industrial and Commercial Bank (1398) declined by 0.26%, while China Construction Bank (0939) ended the session flat.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei 225 fell by 0.53% on Monday.

Bank stocks had a positive session. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) ended the day up 2.10% and 2.29%. However, it was a mixed session for the main components of the Nikkei.

Softbank Group Corp. (9948) slid by 1.69%. KDDI Corp. (9433) and Sony Group Corp. (6758) fell by 0.41% and 0.31%, respectively. Tokyo Electron Ltd. (8035) declined by 0.25%, while Fast Retailing Co. Ltd. (9983) gained 0.05%.

For upcoming economic events, check out our economic calendar.