Hang Seng Index, ASX 200, Nikkei 225: Hawkish FOMC Minutes and PMI Data

US Equity Markets: Existing Home Sales, NVIDIA Earnings, FOMC Meeting Minutes

US existing home sales fell by 1.9% in April after sliding by 3.7% in March. Nevertheless, the weaker-than-expected numbers had a limited impact on market risk sentiment. The markets were focused on NVIDIA (NVDA) earnings results and the FOMC Meeting Minutes.

NVIDIA reported a 262% surge in sales, with Q1 revenue beating estimates. However, more hawkish-than-expected FOMC Meeting Minutes overshadowed the NVIDIA earnings results.

The FOMC Meeting Minutes revealed that committee members were willing to tighten monetary policy further to tackle inflation.

On Wednesday (May 22), the Dow declined by 0.51%. The Nasdaq Composite Index and S&P 500 saw losses of 0.18% and 0.2%, respectively.

The FOMC Meeting Minutes and NVIDIA earnings results will likely set the tone for the Thursday (May 23) Asian session.

Asian Economic Calendar: Private Sector PMIs

Preliminary private sector PMI numbers for Australia and Japan warrant investor attention early in the Thursday Asian session.

Economists forecast the Australia Judo Bank Manufacturing PMI to increase from 49.6 to 50.1 in May. However, economists expect the Judo Bank Services PMI to slip from 53.6 to 53.2. Better-than-expected numbers could drive buyer demand for ASX-listed stocks.

Furthermore, economists predict the Japan Jibun Bank Manufacturing PMI to rise from 49.6 to 49.7 in April. However, economists forecast the Jibun Bank Services PMI to decline from 54.3 to 53.8.

The Services PMI could impact investor expectations of a June Bank of Japan rate hike. Nevertheless, upward trends in the services and manufacturing PMIs may support buyer appetite for Nikkei Index-listed stocks.

Beyond the numbers, investors should consider commodity price trends for the ASX 200 and BoJ commentary for the Nikkei Index.

Commodities: Crude Oil, Gold, and Iron Ore

On Wednesday (May 22), gold spot (XAU/USD) tumbled by 1.75% to close the session at $2,378.41. WTI crude oil slid by 2.13%, ending the Wednesday session at $77.57.

On the Singapore Futures Exchange, iron ore prices were up 0.25% on Thursday (May 23). Iron ore spot declined by 0.39% on Wednesday (May 22).

The USD/JPY and the Nikkei

The USD/JPY advanced by 0.42% on Wednesday (May 22), ending the session at 156.786. A stronger USD/JPY may support buyer appetite for Nikkei Index-listed export stocks. However, investors should consider a weaker Yen and intervention risk.

The Futures Markets

On Thursday (May 23), the ASX 200 was down 74 points, while the Nikkei Index up by 150 points.

ASX 200

The ASX 200 slipped by 0.05% on Wednesday (May 22). Gold, oil, and tech stocks countered gains across the banking and mining sectors. The S&P/ASX All Tech Index declined by 0.10%.

Gold-related stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) ended the session down 1.61% and 1.00%, respectively.

Oil stocks Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) saw losses of 0.79% and 0.52%, respectively.

However, mining and bank stocks cushioned the downside for the ASX 200.

Fortescue Metals Group Ltd. (FMG) and Rio Tinto Group Ltd. (RIO) rallied 1.07% and 1.55%, respectively. BHP Group Ltd (BHP) ended the session up by 0.43%. Upward trends in iron ore prices drove demand for mining stocks.

ANZ Group Holdings Ltd. (ANZ) rallied 1.10%, with National Australia Bank Ltd. (NAB) rising by 0.23%. Westpac Banking Corp. (WBC) ended the session flat, while Commonwealth Bank of Australia (CBA) bucked the trend, falling by 0.24%.

Hang Seng Index

The Hang Seng Index fell by 0.13% on Wednesday (May 22). Tech and real estate stocks limited the downside. The Hang Seng Mainland Properties Index (HSMPI) and the Hang Seng Tech Index (HSTECH) rose by 0.23% and 0.30%, respectively.

Baidu (9888) and Alibaba (9988) fell by 1.95% and 1.66%, respectively. Tencent Holdings (0700) ended the session up by 0.21%.

However, bank stocks had a positive session. HSBC (0005) rallied 1.31%. China Construction Bank (0939) gained 0.34%, while Industrial Commercial Bank (1398) ended the session flat.

The Nikkei Index

(Graph for reference purposes only)

The Nikkei Index extended its losses from Tuesday, falling by 0.85% on Wednesday (May 22).

Bank stocks had another mixed session. Sumitomo Mitsui Financial Group Inc. (8316) declined by 0.48%, while Mitsubishi UFJ Financial Group Inc. (8306) rose by 0.10%.

It was also another mixed session for the main components of the Nikkei Index.

Fast Retailing Co. Ltd. (9983) and Tokyo Electron Ltd. (8035) slid by 1.88% and 1.23%, respectively, with Sony Group Corporation (6758) declining by 0.54%.

However, Softbank Group Corp. (9984) bucked the trend, rallying 2.40%, with KDDI Corp. (9433) gaining 0.07%.

For upcoming economic events, refer to our economic calendar.