Hang Seng Index, ASX 200, Nikkei 225: Futures Flash Red on Final Session of 2023

Highlights

• The Hang Seng Index led the ASX 200 into positive territory on Thursday, while a weaker USD/JPY impacted the Nikkei.
• Rising bets on a Q1 2024 Fed rate cut continued to fuel the appetite for riskier assets.
• On Friday, overnight US economic indicators from Thursday will influence the session.

Overview of the Thursday Session

On Thursday, the Hang Seng Index led the ASX 200 into positive territory. Rising bets on a Q1 2024 Fed rate cut drove demand for riskier assets. However, a weaker USD/JPY impacted export-listed stocks on the Nikkei, leaving the Nikkei in negative territory.

Overnight US economic indicators from Wednesday and a positive US equity market session influenced the Thursday Asian session. On Wednesday, the Dow gained 0.30%, with the Nasdaq Composite Index and the S&P 500 rising by 0.16% and 0.14%, respectively.

However, economic indicators from Japan influenced sentiment regarding a potential Bank of Japan pivot away from negative rates. Better-than-expected retail sales numbers could give the BoJ reason to begin more meaningful pivot discussions. Significantly, industrial profit fell by less than expected. The numbers from Japan and a weaker US dollar contributed to the Nikkei’s losses.

US Economic Indicators and US Equities to Set the Mood

On Friday, overnight US economic indicators from Thursday will influence the Asian session. US labor market and housing sector data influenced the US equity market session. Initial jobless claims increase by more than expected but not by enough to spook investors. Pending home sales stalled in November vs. forecasts of a 1.0% rise.

On Thursday, the Dow and S&P 500 saw gains of 0.14% and 0.04%, while the Nasdaq Composite Index declined by 0.03%.

On Friday, investors must also consider chatter from Beijing.

In the futures markets, the ASX 200 and Nikkei were down 33 and 50 points, respectively.

ASX 200

The ASX 200 rose by 0.70% on Thursday. Tech stocks extended their winning streak to three sessions. The S&P ASX All Technology Index (XTX) gained 0.90%. However, gains were broad-based for the second session, with gold, oil, mining, and bank stocks ending the day in positive territory.

Gold (XAU/USD) stocks: Evolution Mining Ltd. (EVN) and Northern Star Resources Ltd. (NST) rose by 1.01% and 0.87%, respectively. Oil stocks: Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) rose by 0.48% and 0.26%, respectively.

Fortescue Metals Group Ltd. (FMG) rallied 2.07%. BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) rose by 0.92% and 0.87%, respectively.

The big four banks trailed the front-runners. Commonwealth Bank of Australia (CBA) ended the day up 0.99%. The National Australia Bank Ltd. (NAB) and ANZ Group Holdings Ltd (ANZ) saw gains of 0.72% and 0.62%, respectively. Westpac Banking Corp. (WBC) rose by 0.57%.

Hang Seng Index

The Hang Seng Index gained 2.52% on Thursday. The Hang Seng Tech Index (HSTECH) surged by 3.41%. However, the real estate sector outmuscled the tech sector. The Hang Seng Mainland Properties Index (HSMPI) jumped by 4.73%.

Alibaba (9988) and Tencent (0700) gained 2.78% and 2.81%, respectively. NetEase (9999) rose by 3.37%.

Bank stocks had another positive session. HSBC (0005) ended the day up 0.96%. China Construction Bank (0939) and Industrial Commercial Bank (1398) rose by 1.54% and 1.07%, respectively.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei declined by 0.42% on Thursday.

Bank stocks ended the session in negative territory. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) fell by 0.28% and 0.50%, respectively. However, it was a mixed session for the main components of the Nikkei.

Fast Retailing Co. Ltd. (9983) fell by 0.73%, with Softbank Group Corp. (9948) and Tokyo Electron Ltd. (8035) seeing losses of 0.52% and 0.60%, respectively. KDDI Corp. (9433) slipped by 0.04%, while Sony Group Corp. (6758) gained 0.26%.

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