Hang Seng Index, ASX 200, Nikkei Index: Futures Waver Amid FOMC, US Confidence Impact

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Updated: May 28, 2024, 22:45 GMT+00:00

Key Points:

The Hang Seng Index, ASX 200, and the Nikkei Index ended the Tuesday session (May 28) in negative territory.
On Wednesday (May 29), overnight FOMC member commentary, US consumer confidence figures, and the US equity market trends will set the tone for the session.
Consumer confidence figures from Japan and Aussie inflation numbers also need consideration.

US Equity Markets: US Consumer Confidence and the Fed

US consumer confidence figures and FOMC member chatter attracted investor interest on Tuesday (May 28). The CB Consumer Confidence Index unexpectedly increased from 97.0 to 102.0 in May. Furthermore, the Expectations Index rose from 68.8 to 74.6, with the Present Situation Index up from 140.6 to 143.1.

FOMC member Neel Kashkari echoed comments from recent speeches, wanting more progress on inflation before supporting rate cuts.

The US equity markets reacted to the consumer confidence numbers and Fed commentary. On Tuesday, the Nasdaq Composite Index and the S&P 500 saw gains of 0.59% and 0.02%, respectively. The Dow declined by 0.55%.

The US equity market session will likely set the tone for the Wednesday (May 29) Asian market session.

Asian Economic Calendar: Aussie Inflation and Japanese Consumer Confidence

On Wednesday, Australian inflation numbers will put the investor focus on the RBA and the ASX 200. Economists forecast the Monthly Inflation Indicator to fall from 3.5% to 3.4% in April. Hotter-than-expected numbers could refuel investor bets on an RBA rate hike, impacting rate-sensitive ASX 200-listed stocks.

Consumer confidence figures from Japan may influence buyer appetite for the Yen and Nikkei Index-listed stocks. Economists forecast the Consumer Confidence Index to increase from 38.3 to 38.9 in May.

Upward trends in consumer confidence could signal a pickup in consumer spending and demand-driven inflationary pressures. Investors could raise bets on a Bank of Japan rate hike to ensure price stability.

With consumer confidence in focus, Bank of Japan commentary also needs consideration. Bank of Japan Board member Seiji Adachi is on the calendar to speak. Investors should monitor views on the timing of an interest rate hike.

Commodities: Crude Oil, Gold, and Iron Ore

On Tuesday, gold spot (XAU/USD) rose by 0.44%, closing the session at $2,361.08. WTI crude oil jumped 2.71%, ending the Tuesday session at $79.83. Hopes of OPEC maintaining supply curbs contributed to the gains.

On the Singapore Futures Exchange, iron ore prices were down 0.65% early in the Wednesday session. Iron ore spot slid by 3.02% on Tuesday.

The USD/JPY and Nikkei Index

The USD/JPY advanced by 0.22% on Tuesday, ending the session at 157.158. A weaker Japanese Yen could influence buyer demand for Nikkei-listed export stocks. Nevertheless, economic data from Japan and Bank of Japan commentary will likely impact the Nikkei Index more.

The Futures Markets

On Wednesday, the ASX 200 was down 46 points, while the Nikkei Index was up 100 points.

ASX 200

ASX200 290524 Daily Chart

The ASX 200 declined by 0.28% on Tuesday. Mining and tech stocks contributed to the losses. The S&P/ASX All Tech Index fell by 0.63% amidst uncertainty about the Fed rate path.

BHP Group Ltd (BHP) and Rio Tinto Group Ltd. (RIO) fell by 0.16% and 0.05%, respectively. Fortescue Metals Group Ltd. (FMG) ended the Tuesday session flat.

Woodside Energy Group Ltd (WDS) fell by 0.29%, while Santos Ltd (STO) gained 0.52%.

Gold-related and bank stocks also had mixed sessions. Northern Star Resources Ltd. (NST) slipped by 0.14%, while Evolution Mining Ltd (EVN) rose by 0.51%.

ANZ Group Holdings Ltd. (ANZ) and National Australia Bank Ltd. (NAB) saw gains of 0.49% and 0.15%, respectively. The Commonwealth Bank of Australia (CBA) advanced by 0.17%, while Westpac Banking Corp. (WBC) declined by 0.41%.

Hang Seng Index

HSI 290524 Daily Chart

The Hang Seng Index slipped by 0.03% on Tuesday. Real estate and tech stocks ended the session in negative territory. The Hang Seng Mainland Properties Index (HSMPI) and the Hang Seng Tech Index (HSTECH) saw losses of 1.47% and 0.26%, respectively.

Baidu (9888) declined by 0.25%. However, Alibaba (9988) and Tencent Holdings (0700) advanced by 0.38% and 0.80%, respectively.

Bank stocks also had a mixed session. HSBC (0005) and China Construction Bank (0939) ended the session flat. Industrial Commercial Bank (1398) fell by 0.43%.

The Nikkei Index

Nikkei 290524 Daily Chart

(Graph for reference purposes only)

The Nikkei Index fell by 0.11% on Tuesday.

Bank stocks extended their gains from Monday. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) advanced by 1.82% and 2.36%, respectively.

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

Softbank Group Corp. (9984) rose by 1.31%. Fast Retailing Co. Ltd. (9983) and Sony Group Corporation (6758) saw gains of 0.15% and 0.20%, respectively.

Tokyo Electron Ltd. (8035) and KDDI Corp. (9433) saw losses of 0.36% and 0.35%, respectively.

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.