Hang Seng Index, ASX 200, Nikkei 225: US Earnings and Stats to Set the Tone

Highlights

• The ASX 200 and Nikkei ended the Thursday session in negative territory, while policy pledges from Beijing delivered a positive session for the Hang Seng Index.
• The broader Asian markets reacted to a more hawkish than expected Fed press conference.
• On Friday, overnight US corporate earnings and economic indicators from Thursday will set the tone for the session.

Overview of the Thursday Session

On Thursday, the Hang Seng Index ended the day in positive territory. However, the ASX 200 and Nikkei kick-started February with losses.

A more hawkish than expected US Federal Reserve impacted market risk sentiment. Fed Chair Powell said the Fed needs confidence in inflation sustainably returning to 2% before cutting rates. The comments led to the markets reducing bets on a March Fed rate cut.

Weaker-than-expected US labor market data failed to cushion the downside.

On Wednesday, the Nasdaq Composite Index slid by 2.23%. The S&P 500 and the Dow fell by 1.61% and 0.82%, respectively.

From the Asian economic calendar, Manufacturing PMI numbers from Australia, Japan, and China garnered investor interest. Significantly, the China Caixin Manufacturing PMI held steady at 50.8. A pickup in overseas demand offset weaker domestic demand to leave the PMI unchanged. Domestic demand declined despite recent stimulus measures to bolster the economy.

However, fiscal pledges from Beijing delivered a positive session for the Hang Seng Index.

US Corporate Earnings and US Labor Market Data in Focus

On Friday, overnight US economic indicators and corporate earnings from Thursday warrant investor consideration.

Jobless claims, unit labor costs, nonfarm productivity, and manufacturing sector data influenced the US equity markets. Softer than expected US unit labor costs and an unexpected rise in jobless claims signaled softening labor market conditions.

However, US corporate earnings will also impact the Friday Asian session more. Apple Inc. (AAPL), Amazon.com Inc. (AMZN), and Meta Platforms Inc. (META) were among the big names to release earnings on Thursday.

The US equity markets responded to the US economic indicators and corporate earnings. On Thursday, the Dow gained 0.97%. The Nasdaq Composite Index and S&P 500 rose by 1.30% and 1.25%, respectively.

On Friday, the Asian economic and earnings calendar also needs consideration. Producer price inflation numbers could influence bets on an RBA rate cut and the ASX 200. Economists forecast producer prices to increase by 0.6% quarter-on-quarter in Q4 versus 1.8% in Q3. Softer inflation numbers could deliver gains for rate-sensitive ASX 200-listed stocks.

KDDI Corp. (9433) is among the big names on the Nikkei 225 to release earnings results on Friday.

Beyond the economic and earnings calendar, stimulus chatter from Beijing and China Evergrande Group remains focal points.

On Friday, the ASX 200 and Nikkei futures were up 52 and 190 points, respectively.

ASX 200

The ASX 200 slid by 1.20% on Thursday, ending an eight-day winning streak. Losses were broad-based. The S&P ASX All Technology Index (XTX) fell by 1.20%. Bank, mining, and oil stocks also contributed to the losses.

BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) declined by 0.34% and 0.47%, respectively. Fortescue Metals Group Ltd. (FMG) ended the session down 1.27%.

National Australia Bank Ltd. (NAB) and Commonwealth Bank of Australia (CBA) tumbled 2.15% and 2.92%, respectively. ANZ Group Holdings Ltd (ANZ) and Westpac Banking Corp. (WBC) fell by 1.03% and 1.70%, respectively.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) ended the day down 0.49% and 1.15%, respectively.

However, Gold (XAU/USD) stocks had another mixed session. Northern Star Resources Ltd. (NST) gained 1.67%, while Evolution Mining Ltd. declined by 1.25%.

Hang Seng Index

The Hang Seng Index gained 0.52% on Thursday, bucking the broader market trend. Real estate stocks continued to fall. The Hang Seng Mainland Properties Index (HSMPI) fell by 0.22%. However, the Hang Seng Tech Index (HSTECH) gained 2.00%.

Alibaba (9988) and Tencent (0700) ended the day up 2.16% and 0.37%, respectively.

However, bank stocks ended the day in negative territory. HSBC (0005) fell by 0.57%. China Construction Bank (0939) and Industrial Commercial Bank (1398) declined by 0.43% and 0.79%, respectively.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei declined by 0.76% 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 0.79% and 0.43%, respectively.

The main components of the Nikkei had a mixed session.

Sony Group Corp. (6758) slid by 2.08%, with Fast Retailing Co. Ltd. (9983) falling by 1.79%. Softbank Group Corp. (9948) and Tokyo Electron Ltd. (8035) ended the day down 0.94% and 0.81%, respectively.

However, KDDI Corp. (9433) ended the session flat.

For upcoming economic events, check out our economic calendar.