Hang Seng Index, ASX 200, Nikkei Index: Futures Flash Red on US Services PMI Jump

US Equity Markets: Private Sector PMIs, Jobless Claims, and the Fed

US jobless claims and preliminary private sector PMI numbers warranted investor attention on Thursday (May 23).

Initial jobless claims fell from 223k to 215k. Economists forecast a decline to 220k in the week ending May 18.

Furthermore, the US S&P Global Services PMI increased from 51.3 to 54.8 in May. Economists forecast a PMI of 51.3. The services sector remains a focal point for the Fed, with housing services inflation impacting the Fed interest rate trajectory.

The US S&P Global Manufacturing PMI increased from 50.0 to 50.9 in May.

While the markets reacted to the stats, the better-than-expected earnings results from NVIDIA (NVDA) resonated, cushioning the downside for the Nasdaq and the S&P 500.

On Thursday (May 23), the Dow slid by 1.53%. The Nasdaq Composite Index and S&P 500 declined by 0.39% and 0.74%, respectively.

The Services PMI and US equity market moves will likely set the tone for the Friday Asian session.

Asian Economic Calendar: Japan Inflation

On Friday, inflation figures from Japan will attract investor attention. Downward trends in consumer prices could reduce investor bets on a June Bank of Japan interest rate hike.

Economists forecast the annual inflation rate to fall from 2.7% to 2.3% in April. Furthermore, economists expect the core inflation rate to decline from 2.6% to 2.2%.

Notably, softer inflation figures could impact buyer demand for the Japanese Yen. A weaker Japanese Yen could fuel buyer appetite for Nikkei Index-listed export stocks.

Beyond the economic calendar, investors should consider commodity price trends and central bank commentary.

Commodities: Crude Oil, Gold, and Iron Ore

On Thursday (May 23), gold spot (XAU/USD) slid by 2.10%, closing at $2,328.52. WTI crude oil declined by 0.90%, ending the Thursday session at $76.87.

On the Singapore Futures Exchange, iron ore prices were down 0.06% on Friday (May 24). Iron ore spot declined by 1.24% on Thursday (May 23).

The USD/JPY and the Nikkei

The USD/JPY gained 0.06% on Thursday (May 23), ending the session at 156.886. Upward trends in the USD/JPY could drive buyer demand for Nikkei Index-listed export stocks. Nevertheless, investors should consider intervention risk. A weaker Yen could force the Japanese government to threaten an intervention to bolster the Yen.

The Futures Markets

On Friday (May 24), the ASX 200 and the Nikkei Index were down 83 and 550 points, respectively.

ASX 200

The ASX 200 fell by 0.46% on Thursday (May 23). Bank, gold, mining, and oil stocks offset gains across the tech sector. The S&P/ASX All Tech Index rallied 0.92% as investors reacted to the NVIDIA earnings results.

Gold-related stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) saw losses of 3.34% and 4.27%, respectively. Bank, gold, mining, and oil stocks faced selling pressure because of the FOMC Meeting Minutes.

Oil stocks Woodside Energy Group Ltd (WDS) slipped by 0.07%, while Santos Ltd (STO) ended the session flat.

BHP Group Ltd (BHP) and Rio Tinto Group Ltd. (RIO) slid by 2.88% and 1.96%, respectively. Fortescue Metals Group Ltd. (FMG) ended the session down by 1.14%. Iron ore prices trended lower, impacting mining stocks.

National Australia Bank Ltd. (NAB) fell by 1.12%, with ANZ Group Holdings Ltd. (ANZ) declining by 0.84%. Westpac Banking Corp. (WBC) and Commonwealth Bank of Australia (CBA) saw losses of 0.74% and 0.63%, respectively.

Hang Seng Index

The Hang Seng Index slid by 1.70% on Thursday (May 23). Tech and real estate sectors suffered because of the hawkish Fed minutes. The Hang Seng Mainland Properties Index (HSMPI) and the Hang Seng Tech Index (HSTECH) fell by 1.31% and 2.41%, respectively.

Alibaba (9988) slid by 5.24%. Baidu (9888) and Tencent Holdings (0700) declined by 1.74% and 0.68%, respectively.

Bank stocks also had a negative session. HSBC (0005) fell by 0.72%. China Construction Bank (0939) and Industrial Commercial Bank (1398) saw losses of 0.68% and 1.28%, respectively.

The Nikkei Index

(Graph for reference purposes only)

The Nikkei Index bucked the broader market trend on Thursday (May 23), rising by 1.26%.

Bank stocks had a mixed session. Sumitomo Mitsui Financial Group Inc. (8316) fell by 0.34%, while Mitsubishi UFJ Financial Group Inc. (8306) advanced by 0.64%.

It was also a mixed session for the main components of the Nikkei Index.

Softbank Group Corp. (9984) jumped by 4.28%, with Tokyo Electron Ltd. (8035) gaining 1.80%. Fast Retailing Co. Ltd. (9983) and Sony Group Corporation (6758) rose by 1.08% and 0.59%, respectively.

KDDI Corp. (9433) bucked the trend, falling by 0.51%.

For upcoming economic events, refer to our economic calendar.