Hang Seng Index, ASX 200, Nikkei 225 Index: Dark Clouds and Economic Forecasts Ahead

Key Insights:

• A bearish Monday saw the Hang Seng Index lead ASX 200 and Nikkei into China’s economic shadow.
• Chinese economic indicators are the linchpin today, with industrial production and retail sales figures in focus.
• The RBA and Australian wage growth could be curve balls for the ASX 200.

It was a bearish Monday session for the Hang Seng Index and the broader Asian markets. The Hang Seng Index led the ASX 200 and Nikkei into the red on China’s worsening economic troubles.

There were no economic indicators from the Asian region on Monday to provide direction, leaving investors to consider US producer price numbers from Friday. Hotter-than-expected producer price index numbers added to the bearish mood as investors cut positions on China’s economic troubles.

The US producer and core producer prices increased by 0.3% in July. Economists forecast producer and core prices to rise by 0.2%.

Today, economic indicators and central banks will provide direction. While the RBA monetary policy meeting minutes and Australian wage growth will draw interest, economic indicators from China will be the focal point.

Industrial production, retail sales, fixed asset investment, and unemployment numbers are out today. We expect the industrial production and retail sales figures to impact. Weaker year-over-year figures will weigh on riskier assets. However, investors should look out for any comments from Beijing.

There were no US economic indicators from Monday to provide direction. The NASDAQ Composite rose by 1.05% on Monday. It was also a bullish session for the Dow and the S&P 500, which saw gains of 0.07% and 0.57%, respectively.

ASX 200

The ASX 200 declined by 0.86% on China’s economic troubles.

The Commonwealth Bank of Australia (CBA) and The National Australia Bank (NAB) declined by 0.67% and 0.81%, respectively. ANZ Group (ANZ) and Westpac Banking Corp (WBC) also saw red, falling by 0.87% and 1.08%, respectively. Bank stocks struggled on RBA uncertainty and China’s economic woes.

This morning, the National Australia Bank will release its third quarter update.

Mining stocks also had a bearish session. Fortescue Metals Group (FMG) fell by 1.81%, with Rio Tinto (RIO) and BHP Group Ltd (BHP) sliding by 2.28% and 2.14%, respectively. The losses came on weak demand jitters weighing on commodities. Newcrest Mining (NCM) bucked the trend, gaining 0.58%.

Oil stocks had a bullish session. Woodside Energy Group (WDS) and Santos Ltd (STO) saw gains of 0.99% and 0.25%, respectively.

Hang Seng Index

The Hang Seng Index ended the Monday session down 1.58%. Property company Country Garden Holdings Co Ltd. (HK2007) continued to slide, tumbling by 18.37% to HK$0.80 on real estate sector woes.

Considering the main Index components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) ended the day with losses of 0.77% and 2.62%, respectively.

Bank stocks had a bearish session. The Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) declined by 1.96% and 1.64%, respectively. HSBC Holdings PLC ended the day down 0.40% on the gloomy economic sentiment and contagion risk.

CNOOC (HK: 0883) fell by 0.61% on falling oil prices.

Nikkei 225

(For reference purposes only)

The Nikkei 225 joined the broader market in the red, falling by 1.27%, with a stronger USD/JPY providing little comfort. Risk aversion weighed on the Nikkei.

The banks had a bearish session. Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group saw losses of 1.03% and 1.02%, respectively.

Looking at the main components, SoftBank Group Corp. (9984) and Sony Corp (6758) slid by 2.87% and 3.10%, respectively. Fast Retailing Co (9983) and Tokyo Electron Limited (8035) also struggled, falling by 2.64% and 0.88%, respectively. KDDI Corp (9433) bucked the trend, gaining 0.67% on demand from China’s chipmakers.

Check out our economic calendar for economic events.