Hang Seng Index, ASX 200, Nikkei 225: US Tech Sector Slump to Set the Tone for Monday

US Equity Markets: Tech Sector Slump

On Friday, US tech stocks hit the reverse ahead of key earnings reports from the Magnificent Seven. The pullback coincided with easing fears of a more widespread conflict in the Middle East. Media reports of Iran downplaying the Israeli attack averted a more marked equity market sell-off.

There were no US economic stats from Friday (April 19) for investors to consider.

On Friday, the Dow advanced by 0.56%. However, the Nasdaq Composite Index tumbled 2.05%, with the S&P 500 declining by 0.88%. The tech stock sell-off could set the tone for the Monday Asian session amid fading investor bets on multiple 2024 Fed rate cuts.

Asian Economic Calendar: The PBoC in the Spotlight

On Monday, the People’s Bank of China (PBoC) will set the one-year and five-year loan prime rates (LPR). Economists expect the PBoC to leave the one-year and five-year LPRs unchanged at 3.45% and 3.95%, respectively. An unexpected cut to the LPRs could drive buyer demand for riskier assets.

There are no economic stats from the Asian region for investors to consider. Nevertheless, it could be a pivotal week for the Asian equity markets. Private sector PMIs (Tues), inflation numbers from Australia and Japan, and the Bank of Japan monetary policy decision will influence market risk sentiment.

Away from the economic calendar, easing fears of a more widespread Middle East conflict could support buyer demand for riskier assets.

Commodities: Crude Oil, Gold, and Iron Ore

On Friday, WTI crude ended the session up 0.50% to $83.14. Gold (XAU/USD) advanced by 0.54% to $2,392.

Iron ore extended its gains from Thursday, rising by 0.28% on the Singapore Futures Exchange.

The USD/JPY, the Intervention Zone, and the Nikkei

The USD/JPY slipped by 0.03% on Friday, closing the session at 154.598. Nevertheless, the USD/JPY hovered close to the 155 handle, leaving the threat of an intervention on the table. A Japanese government intervention to bolster the Yen could sink Nikkei-listed export stocks. On Friday, the USD/JPY slid to a session low of 153.587 amidst a flight to safety, sending the Nikkei deep into negative territory.

The Futures Markets

On Monday, the ASX 200 was down 46 points, while the Nikkei was flat.

ASX 200

The ASX 200 declined by 0.98% on Friday. Bank, mining, and tech stocks contributed to the losses. The S&P ASX All Technology Index (XTX) slid by 1.06%.

ANZ Group Holdings Ltd. (ANZ) and National Australia Bank Ltd. (NAB) saw losses of 1.09% and 1.17%, respectively. Commonwealth Bank of Australia (CBA) declined by 0.77%, with Westpac Banking Corp. (WBC) falling by 0.89%.

BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) fell by 1.02% and 1.04%, respectively. Fortescue Metals Group Ltd. (FMG) slid by 1.99%.

However, gold-related stocks had a positive mixed session, while oil stocks had a mixed session.

Gold stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) advanced by 1.31% and 1.75%, respectively.

Woodside Energy Group Ltd (WDS) declined by 0.17%, while Santos Ltd (STO) gained 1.82%.

Hang Seng Index

On Friday, the Hang Seng Index fell by 0.99%. Real estate and tech stocks hit the reverse. The Hang Seng Tech Index (HSTECH) slid by 2.35%, with the Hang Seng Mainland Properties Index (HSMPI) declining by 0.61%.

Tencent (0700) and Alibaba (9988) saw losses of 0.20% and 1.77%, respectively.

However, bank stocks had a mixed session. HSBC (0005) slid by 1.28%. China Construction Bank (0939) gained 0.21%, while Industrial Commercial Bank (1398) ended the session flat.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei tumbled 2.66% on Friday.

Bank stocks contributed to the losses. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) declined by 0.89% and 1.12%, respectively.

However, it was a mixed session for the main components of the Nikkei.

Tokyo Electron Ltd. (8035) slumped by 8.74%, with Softbank Group Corp. (9948) sliding by 2.89.

Fast Retailing Co. Ltd. (9983) and Sony Group Corporation (6758) saw losses of 1.05% and 1.80%, respectively. However, KDDI Corp. (9433) bucked the trend, gaining 0.43%.

For upcoming economic events, refer to our economic calendar.