Hang Seng Index, ASX 200, Nikkei Index: The BoJ and the RBA in the Spotlight

Summary of the Monday Session

On Monday, the Nikkei led the Hang Seng Index and the ASX 200 into positive territory.

US economic indicators from Friday set the tone for the Monday Asian session. Consumer sentiment declined in March, while consumer inflation expectations remained elevated. The inflation expectation figures followed the hotter-than-expected US inflation numbers that continued to pressure buyer demand for riskier assets.

The US Inflation numbers impacted bets on an H1 2024 Fed rate cut. 10-Year US Treasury yields reflected the shift in sentiment toward the Fed rate path, weighing on the US equity markets.

10-year US Treasury yields increased by 0.42% to 4.310%. On Friday, the Nasdaq Composite and S&P 500 declined by 0.96% and 0.65%, respectively. The Dow fell by 0.49%.

However, the Asian economic calendar warranted investor attention on Monday. Weaker-than-expected machinery orders from Japan drove buyer demand for the USD/JPY amidst bets on a BoJ pivot from negative rates. The stronger USD/JPY fueled a Nikkei rally.

Economic data from China supported ASX 200 and Hang Seng Index recoveries from early losses.

US Equities, the Bank of Japan, and the RBA in Focus

The Monday US equity market session will set the tone for the Tuesday Asian session as the Fed interest rate decision looms. US housing market data influenced buyer appetite for riskier assets. The NAHB Housing Market Index unexpectedly increased from 48 to 51 in March.

Dip buyers returned from the sidelines despite 10-year US Treasury yields rising 0.32% to 4.324%.

On Monday, the Nasdaq Composite Index and S&P 500 saw gains of 0.82% and 0.63%, respectively. The Dow ended the session up 0.20%.

While the global financial markets focus on the Fed, the Asian economic calendar also needs consideration on Tuesday. The Bank of Japan and the RBA will deliver interest rate decisions.

The markets are expecting the BoJ to pivot from negative rates, leaving forward guidance for 2024 to influence buyer appetite for the Nikkei. The threat of further RBA rate hikes could test the demand for ASX-listed stocks after China stats on Monday.

On Tuesday, the ASX 200 futures were up 3 points, while Nikkei futures were down by 110 points.

ASX 200

The ASX 200 gained 0.07% on Monday. Bank stocks provided support. However, gold, mining, oil, and tech stocks had a mixed start to the week. The S&P ASX All Technology Index (XTX) ended the day up 0.10%.

Commonwealth Bank of Australia (CBA) rose by 0.80%. National Australia Bank Ltd. (NAB) gained 0.65%. ANZ Group Holdings Ltd. (ANZ) and Westpac Banking Corp. (WBC) advanced by 0.59% and 0.53%, respectively.

Gold (XAU/USD) stocks Northern Star Resources Ltd. (NST) declined by 0.36%, while Evolution Mining Ltd. rose by 0.90%.

Rio Tinto Ltd. (RIO) gained 0.45%, while BHP Group Ltd (BHP) ended the day flat. Fortescue Metals Group Ltd. (FMG) fell by 1.13%.

Woodside Energy Group Ltd (WDS) declined by 1.00%, while Santos Ltd (STO) ended the day up 0.27%.

Hang Seng Index

On Monday, the Hang Seng Index gained 0.10%. Tech stocks provide support while real estate stocks continued to retreat after China housing sector data from Friday.

The Hang Seng Tech Index (HSTECH) rose by 1.25%, while the Hang Seng Mainland Properties Index (HSMPI) slid by 2.09%.

Alibaba (9988) and Tencent (0700) advanced by 0.14% and 2.11%, respectively.

Bank stocks had a mixed start to the week. HSBC (0005) rallied 1.79%, with China Construction Bank (0939) ending the session flat. Industrial Commercial Bank (1398) fell by 0.50%.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei rallied 2.67% on Monday.

Bank stocks started the week in positive territory. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) rose by 2.12% and 1.93%, respectively.

It was also a positive Monday session for the main components of the Nikkei.

Fast Retailing Co. Ltd. (9983) rallied 4.73%. Sony Group Corporation (6758) and Tokyo Electron Ltd. (8035) ended the session with gains of 2.03% and 3.76%, respectively.

KDDI Corp. (9433) and Softbank Group Corp. (9948) advanced by 0.98% and 1.77%, respectively.

For upcoming economic events, refer to our economic calendar.