Hang Seng Index, ASX 200, Nikkei 225: US Fed Speakers and Jobless Claims Affecting Markets

Highlights

• The Hang Seng Index led the ASX 200 and the Nikkei 225 into negative territory on Thursday.
• China real estate woes overshadowed optimism over the Fed ending its rate hike cycle.
• On Friday, US overnight economic indicators and Fed speeches from Thursday will set the tone.

Overview of the Thursday Session

On Thursday, the Hang Seng Index led the ASX 200 and the Nikkei 225 into negative territory. Disappointment toward US-China talks and no concrete plans to improve trade relations weighed on investor sentiment.

US Retail Sales and Producer Price Impacted the Mood

Overnight US economic indicators from Wednesday influenced the mood for the Thursday Asian session. US retail sales and producer prices numbers for October left the US equity market with relatively modest gains.

Retail sales fell less than expected, easing immediate concerns of a hard landing. Producer prices signaled a softer consumer price inflation outlook, supporting bets on the Fed ending its rate hike cycle.

However, concerns over the outlook for the US economy capped the gains for the US equity markets. The third quarter GDP report previously revealed a reduced disposable income outlook.

On Wednesday, the Dow gained 0.47%, with the Nasdaq Composite Index and S&P 500 rising by 0.07% and 0.16%, respectively. 10-year US Treasury yields rose by 1.84% on Wednesday, ending the session at 4.533%.

China House Prices Left the Hang Seng Deeper in Negative Territory

Trade and machinery order numbers from Japan supported the Bank of Japan commitment to ultra-loose. However, employment numbers from Australia continued to signal tight labor market conditions, leaving an RBA rate hike on the table.

While the numbers were influential, a continued fall in house prices and property investment across China spooked investors.

US Fed Speakers and Jobless Claims to Set the Tone for Friday

On Thursday, US economic data and Fed speakers influenced market risk sentiment during the US session. FOMC voting member Lisa Cook warned of no guarantee for a soft landing. Cook noted that some parts of the economy struggle with tighter financial conditions.

A larger-than-expected rise in jobless claims and a fall in industrial production revealed cracks in the US economy.

The Dow fell by 0.13%, while the Nasdaq Composite Index and S&P 500 saw gains of 0.07% and 0.12%, respectively.

The US overnight stats and Fed comments will set the tone for the Friday Asian session. There are no economic indicators from the Asian economic calendar to influence the Asian markets on Friday.

Futures Market Signal a Cautious Friday

The futures markets signaled a negative start to the Friday session. The ASX 200 and the Nikkei were down 1 and 50 points, respectively.

ASX 200

The ASX 200 declined by 0.67% on Thursday. Tech stocks ended the session in negative territory. The S&P/ASX All Tech Index fell by 0.31%. Mining, gold, and oil stocks also ended the day underwater.

BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) declined by 0.60% and 0.35%. Gold stocks Evolution Mining Ltd. (EVN) and Northern Star Resources Ltd. (NST) ended the session down 4.76% and 4.15%. Oil stocks Woodside Energy Group Ltd. (WDS) and Santos Ltd. (STO) fell by 0.80% and 1.94%.

Fortescue Metals Group Ltd. (FMG) bucked the trend, gaining 0.08%.

Bank stocks had another mixed session. Australia and New Zealand Banking Group Ltd. (ANZ) and the Commonwealth Bank of Australia (CBA) saw gains of 0.50% and 0.14%. Westpac Banking Corp. (WBC) ended the session flat.

National Australia Bank Ltd. (NAB) bucked the trend, falling 1.18%.

Hang Seng Index

The Hang Seng Index declined by 1.36% on Thursday.

Alibaba (9988) slid by 2.22%, while better-than-expected earnings supported a 0.68% gain for Tencent (0700).

Bank stocks tracked the broader market. HSBC (0005) declined by 0.83%. China Construction Bank (0939) and the Industrial and Commercial Bank (1398) fell by 0.86% and 1.04%, respectively.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei 225 slipped by 0.28% on Thursday.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group (8306) ended the day up 2.64% and 0.40%. However, it was another mixed session for the main components of the Nikkei 225.

KIDDI Corp. (9433) slid by 1.76%. Sony Corp (6758) and Tokyo Electron (8035) declined by 0.11% and 0.10%, respectively. Fast Retailing (9983) slipped by 0.14%, while Softbank (9984) gained 1.48%.

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