Hang Seng Index, ASX 200, Nikkei 225: Futures Point to a Positive Friday Session

Highlights

• The Nikkei and ASX 200 ended the session in negative territory on Thursday, while the Hang Seng saw modest gains.
• Investors reacted to FedEx-fueled losses across the US equity markets on Wednesday.
• On Friday, China and inflation numbers from Japan are focal points for the session.

Overview of the Thursday Session

On Thursday, the Nikkei and the ASX 200 ended the session in negative territory. The Hang Seng Index bucked the trend.

FedEx (FDX)-fueled losses across the US equity markets set the tone for the Asian session on Thursday. On Wednesday, the Nasdaq Composite Index slid by 1.50%. The Dow and the S&P 500 ended the day down 1.27% and 1.47%, respectively.

US economic indicators provided the Asian markets little comfort despite a bounce in consumer confidence. The CB Consumer Confidence Index increased from 101.0 to 110.7 in December.

There were no economic indicators from the Asian session to distract investors. The FedEx revision to revenue forecasts reignited jitters of a weakening demand outlook.

US GDP, Jobless Claims, and Manufacturing Numbers to Set the Tone

On Friday, overnight US economic indicators from the Thursday session will set the tone for the session. Better-than-expected jobless claims numbers supported bets on a US soft landing. Q3 GDP revisions had a limited impact on the US equity markets. The Philly Fed Manufacturing Index unexpectedly fell from -5.9 to -10.5, supporting expectations of a Q1 2024 Fed rate cut.

On Thursday, the Dow and the S&P 500 gained 0.87% and 1.09%, respectively. The Nasdaq Composite Index rose by 1.26%.

Inflation Numbers from Japan and the Australian Housing Sector in Focus

On Friday, inflation numbers from Japan could impact the appetite for Nikkei-listed stocks. Inflation numbers from Japan could influence bets on the timing of a Bank of Japan pivot from negative rates. Softer-than-expected numbers may ease pressure on the BoJ to exit negative rates in Q1 2024.

Economists forecast the core annual inflation rate to soften from 2.9% to 2.5% in November.

Australian housing sector data also needs consideration. A weaker-than-expected rise in housing credit could raise red flags about the Australian economy. The RBA highlighted uncertainty about consumer spending. A deteriorating housing market could impact consumer spending and the Australian economy. Significantly, a pullback in spending would raise bets on a 2024 RBA rate cut.

Economists forecast housing credit to increase by 0.3% in November vs. 0.4% in October.

Away from the economic calendar, BoJ commentary and stimulus chatter from Beijing also need monitoring.

In the futures markets, the ASX 200 and Nikkei were up 2 and 130 points, respectively.

ASX 200

The ASX 200 declined by 0.45% on Thursday. Tech stocks ended the session in negative territory. The S&P ASX All Technology Index (XTX) fell by 0.82%. The big four banks and oil stocks contributed to the losses, while gold and mining stocks had mixed sessions.

Gold (XAU/USD) stocks: Evolution Mining Ltd. (EVN) gained 1.55%, while Northern Star Resources Ltd. (NST) ended the day flat.

The big four banks also had a mixed session. Commonwealth Bank of Australia (CBA) fell by 0.37%. Westpac Banking Corp. (WBC) and National Australia Bank Ltd. (NAB) declined by 0.13% and 0.23%, respectively. ANZ Group Holdings Ltd (ANZ) gained 0.08%.

BHP Group Ltd (BHP) fell by 0.12%, while Fortescue Metals Group Ltd. (FMG) and Rio Tinto Ltd. (RIO) rose by 0.54% and 0.02%, respectively.

Oil stocks ended the day in negative territory. Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) ended the day down 0.99% and 0.13%, respectively.

Hang Seng Index

The Hang Seng Index rose by 0.04% on Thursday. Hopes for more stimulus measures from Beijing supported buyer demand. The Hang Seng Tech Index (HSTECH) fell by 0.44%, while the Hang Seng Mainland Properties Index (HSMPI) gained 0.84%.

Alibaba (9988) rose by 1.10% as investors responded further to news of an internal reshuffle. Tencent (0700) fell by 0.51%.

Bank stocks also had a positive session. HSBC (0005) rose by 0.08%. China Construction Bank (0939) and Industrial Commercial Bank (1398) ended the day up 0.67% and 0.92%, respectively.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei slid by 1.59% on Thursday.

Bank stocks ended the session in negative territory. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) declined by 0.72% and 0.51%, respectively. It was also a negative session for the main components of the Nikkei.

Tokyo Electron Ltd. (8035) and Fast Retailing Co. Ltd. (9983) slid by 2.20% and 3.91%, respectively. Softbank Group Corp. (9948) fell by 0.89%. Sony Group Corp. (6758) and KDDI Corp. (9433) ended the session down 0.61% and 0.52%, respectively.

However, the auto sector grabbed the headlines. Toyota (7203) shares tumbled 4.03%. Investors reacted to news of Daihatsu Motors indefinitely halting shipments of all vehicles over safety issues.

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