Hang Seng Index, ASX 200, Nikkei Index: Baidu Sinks the HSI as Investors Play Catch Up

Bob Mason
Updated: Jun 11, 2024, 03:33 GMT+00:00

Key Points:

  • The Hang Seng Index and the ASX 200 reopened after the Monday holidays with heavy losses as investors reacted to the US Jobs Report.
  • Japanese Yen weakness drove buyer demand for Nikkei Index export-listed stocks as investors awaited a Bank of Japan interest rate decision on Friday.
  • Economic indicators from Australia added to the gloomy mood as business confidence waned in mid-Q2 2024.
Hang Seng Index, ASX 200, Nikkei Index

In this article:

Australian and Hong Kong Markets React to US Jobs Report

The Australian, Hong Kong, and Mainland Chinese markets reopened after the Monday (June 10) holidays. Investors had a first opportunity to react to better-than-expected US labor market data from Friday (June 7).

According to the US Jobs Report, average hourly wages increased 4.1% year-on-year in May after a rise of 4.0% in April. Nonfarm payrolls jumped by 272k after an increase of 165k in April.

The numbers influenced investor bets on a September Fed rate cut. According to the CME FedWatch Tool, the chances of the Fed holding interest rates unchanged in September increased from 40.5% to 49.5% in the week ending June 7.

Moreover, investors ignored overnight Monday gains across the US equity markets. On Monday, the Nasdaq Composite Index and the S&P 500 saw gains of 0.35% and 0.26%, respectively. The Dow rose by 0.17%.

Uncertainty toward the looming Fed interest rate decision (Wed) impacted buyer demand for riskier assets. Concerns about the Chinese economy and EU tariffs on China added to the negative mood.

The US futures pointed to a testy start to the Tuesday US session, with the Nasdaq mini and Dow mini down 20 and 58 points, respectively.

Hang Seng Index and the Mainland China Markets Kickstart the Week in the Red

Hang Seng Index kickstarts the week with heavy losses.
HSI 110624 Daily Chart

The mainland China indexes reopened after the Monday holidays with losses. The Shenzhen Composite Index declined by 0.85% on Tuesday, with the CSI 300 falling by 0.95%.

However, the Hang Seng Index experienced sizeable Tuesday morning session losses, sliding by 1.79%.

Real estate and tech stocks contributed to the losses as investors fretted over the looming FOMC interest rate decision and economic projections. The Hang Seng Tech Index (HSTECH) fell by 1.29%, with the Hang Seng Mainland Properties Index (HSMPI) sliding by 1.74%.

Baidu (9888) tumbled 2.59%. Alibaba (9988) and Tencent Holdings (0700) saw losses of 0.97% and 0.40%, respectively.

Nikkei Finds Support from a Weaker Japanese Yen

Nikkei saw gains on a weaker Yen.
Nikkei 110624 Daily Chart

The Nikkei Index advanced by 0.37% on Tuesday. A USD/JPY return to 157 drove buyer demand for Nikkei Index-listed export stocks.

Tokyo Electron Ltd. (8035) rallied 2.24%, with KDDI Corp. (9433) gaining 0.02%.

However, Fast Retailing Co. Ltd. (9983) and Softbank Group Corp (9984) saw losses of 0.36% and 0.35%, respectively. Sony Group Corporation (6758) declined by 0.30%.

Later in the session on Tuesday, machine tool orders from Japan warrant investor attention as the Bank of Japan interest rate decision looms.

Commodity price trends sink the ASX 200.
ASX200 110624 Daily Chart

The ASX 200 slid by 1.34% on Tuesday as investors reacted to the US Jobs Report and commodity price trends.

Gold spot (XAU/USD), iron ore spot, and WTI crude oil price trends impacted buyer demand for gold, mining, and oil stocks.

Fortescue Metals Group Ltd. (FMG) tumbled 3.28%. BHP Group Ltd (BHP) and Rio Tinto Group Ltd. (RIO) slid by 1.64% and 1.44%, respectively.

Gold stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) slumped by 5.25% and 6.59%, respectively.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) declined by 0.07% and 0.40%, respectively.

Furthermore, bank and tech stocks contributed to the losses in the morning session.

National Australia Bank Ltd. (NAB) fell by 1.36%, with ANZ Group Holdings Ltd. (ANZ) declining by 1.22%. Commonwealth Bank of Australia (CBA) and Westpac Banking Corp. (WBC) were down 1.20% and 1.19%, respectively.

Additionally, the S&P/ASX All Technology Index retreated 0.96%.

Economic indicators from Australia also impacted buyer demand for ASX 200-listed stocks. The NAB Business Confidence Index fell from +1 to -3 in May, signaling a deteriorating macroeconomic environment.

For upcoming economic events, refer to our economic calendar.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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