Hang Seng Index, ASX 200, Nikkei 225: Futures Track Nasdaq into the Red

Highlights

• The Hang Seng Index kickstarted 2024 with a hefty loss, while the ASX 200 ended the session in positive territory.
• Manufacturing sector activity in China and the real estate sector left the Hang Seng Index in negative territory.
• Overnight US economic indicators from Tuesday and the Nasdaq Composite Index will set the tone for the Wednesday session.

Overview of the Tuesday Session

On Tuesday, the Hang Seng Index began 2024 on a negative footing, while the ASX 200 made gains on rising commodity prices. There was no trading on the Nikkei, with the Japanese markets reopening on Thursday.

On Friday, the Dow and the S&P 500 declined by 0.05% and 0.28%, respectively. The Nasdaq Composite Index fell by 0.05%. 10-year US Treasury yields increased by 0.57%, ending the session at 3.866%. Weak US economic indicators from Friday contributed to the losses. The Chicago PMI slid from 55.8 to 46.9, setting the tone for the Tuesday session.

However, mixed economic indicators from China left the Hang Seng Index in negative territory. PMI numbers from Sunday impacted investor sentiment, with the NBS Manufacturing PMI falling from 49.4 to 40.0 in December. On Tuesday, the China Caixin Manufacturing PMI failed to provide relief despite rising from 50.7 to 50.8.

Rising commodity prices contributed to gains for the ASX 200. Investors brushed aside economic indicators from China.

US Manufacturing and Equities to Set the Tone

On Wednesday, overnight US economic indicators and equity market losses from Tuesday will set the tone for the Asian session. The S&P Global US Manufacturing PMI declined from 49.4 to 47.9 in December v a preliminary 48.2.

The US equity markets had a mixed start to the year. On Tuesday, the Nasdaq Composite Index slid by 1.63%, with the S&P 500 declining by 0.57%. The Dow bucked the trend, gaining 0.07%. 10-year US Treasury yields climbed by 1.78% to 3.935%.

Barclays hit Apple Inc. (AAPL) with a downgrade on expectations of weak iPhone sales. Rising 10-year Treasury yields contributed to the negative sentiment, leaving the Tech giants in negative territory.

There are no Asian economic indicators to influence market risk sentiment on Wednesday. The lack of stats will leave the Asian markets to take their cues from the overnight US session. However, investors must consider stimulus chatter from Beijing. Falling oil prices and the weak US PMI report could pressure oil and mining stocks and the ASX 200.

In the futures markets, the ASX 200 and Hang Seng were down 77 and 175 points, respectively. There is no trading on the Nikkei on Wednesday.

ASX 200

The ASX 200 gained 0.49% on Tuesday. Gains were broad-based, with tech stocks also seeing gains. The S&P ASX All Technology Index (XTX) rose by 0.38%.

Gold (XAU/USD) stocks: Evolution Mining Ltd. (EVN) and Northern Star Resources Ltd. (NST) rose by 0.76% and 0.51%, respectively. Oil stocks: Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) gained 1.26% and 1.05%, respectively.

Mining stocks and the big four banks enjoyed a positive start to 2024.

Fortescue Metals Group Ltd. (FMG) rallied 1.27%. BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) ended the day up 0.26% and 0.67%, respectively.

Commonwealth Bank of Australia (CBA) rallied 1.62%, with Westpac Banking Corp. (WBC) gaining 0.79%. ANZ Group Holdings Ltd (ANZ) and National Australia Bank Ltd. (NAB) rose by 0.27% and 0.52%, respectively.

Hang Seng Index

The Hang Seng Index slid by 1.52% on Tuesday. The Hang Seng Tech Index (HSTECH) declined by 1.32%. However, the Hang Seng Mainland Properties Index (HSMPI) tumbled by 4.25% as investors reacted to a slide in Mainland home sales.

Alibaba (9988) ended the session down 1.19%. News of Alibaba losing an antimonopoly suit and having to pay JD.com 1 billion Yuan contributed to the loss. Tencent (0700) rose by 1.02%.

Bank stocks had a negative session. HSBC (0005) declined by 0.08%. China Construction Bank (0939) and Industrial Commercial Bank (1398) tumbled by 2.37% and 2.09%, respectively. China’s housing sector and economic woes dragged the pair deep into the red.

The Nikkei 225

(Graph for reference purposes only)

There was no trading on the Nikkei, with the Japanese markets reopening on Thursday, January 4.

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