Hang Seng Index, ASX200, Nikkei 225: Bank Stocks Slide

• It was a bullish Wednesday morning for the Asian markets, with the Hang Seng Index finding much-needed support.
• Microsoft and Alphabet Inc. corporate earnings and easing bets of a June Fed rate hike delivered support.
• This morning, Australian inflation figures eased bets of an RBA rate hike at the next meet, while global recessionary fears limited any gains.

Market Overview

It was a bullish Wednesday morning for the Asian markets. The Hang Seng Index led the way, with the ASX 200 and Nikkei finding support.

US economic indicators and banking sector woes delivered a bearish start to the Wednesday session.

The CB Consumer Confidence Index fell from 104.2 to 101.3 in April versus a forecast of 104.0. In April, the Expectations Index fell from 74.0 to 68.1, while the Present Situation Index rose from 148.9 to 151.1.

Significantly, the Expectations Index remained below 80, signaling a recession within the year. United Parcel Service Inc. (UPS) slumped by 9.99% in response to earnings results and a bleak outlook, adding to the bearish mood.

News of sliding deposits at First Republic Bank (FRC) reignited fears of a banking crisis, while earnings from Microsoft (MSFT) and Alphabet Inc. (GOOGL) delivered morning support.

The influence of consumer confidence, United Parcel Service (UPS), and First Republic Bank (FRC) news on sentiment toward Fed monetary policy was evident.

According to the CME FedWatchTool, the probability of a 25-basis point May interest rate hike fell from 90.5% to 76.1% on Tuesday. Significantly, the chances of a June hike declined from 24.7% to 9.2%, supporting the bullish end to the Tuesday session.

Economic indicators from the region were on the light side this morning, leaving investors to consider the day ahead. US core durable goods orders and Meta Platforms (META) earnings will draw interest. However, the latest banking sector-related news will also need consideration.

After a bearish Tuesday session, the US futures were in the green this morning. The NASDAQ and Dow Jones were up 182.75 and 62.00 points, respectively. The S&P 500 mini gained 21.5.

ASX 200

The ASX 200 was down 0.03% this morning, with mining and bank stocks a drag. Inflation figures for Q1 provided support, however. The Australian annual inflation rate softened from 7.8% to 7.0% versus a forecasted 6.9%, raising hopes of another RBA pause.

The big-4 had a mixed morning. The National Australia Bank (NAB) and The Commonwealth Bank of Australia (CBA) fell by 0.09% and 0.36%, respectively, with Westpac Banking Corp (WBC) seeing a 0.07% loss. ANZ Group (ANZ) bucked the trend, rising by 0.23%.

Mining stocks had a bearish morning. Rio Tinto (RIO) and BHP Group Ltd (BHP) were down by 0.87% and 0.82%, respectively, with Fortescue Metals Group (FMG) falling by 1.25%. Newcrest Mining (NCM) rose by 2.39%.

Oil stocks found support. Woodside Energy Group (WDS) and Santos Ltd (STO) saw gains of 1.43% and 1.34%, respectively. Brent Crude was up 0.35% to $81.05 this morning.

Hang Seng Index

The Hang Seng was up 0.61% this morning.

Considering the main components, Tencent Holdings Ltd (HK:0700) rose by 0.47%, while Alibaba Group Holding Ltd (HK:9988) fell by 0.95%

However, it was a bearish morning for banking stocks. The Industrial and Commercial Bank of China (HK:1398) and HSBC Holdings PLC saw losses of 0.24% and 0.27%, respectively, with China Construction Bank (HK: 0939) down by 0.76%.

CNOOC (HK: 0883) bucked the bearish trend, rising by 0.48%.

Nikkei 225

The Nikkei 225 was up 0.10% this morning, with a weaker USD/JPY capping the upside.

Bank stocks struggled, with Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group seeing losses of 2.13% and 1.80%, respectively.

Looking at the main components, Sony Corp (6758) slid by 1.42%, with Fast Retailing Co (9983) and Tokyo Electron Limited (8035) falling by 0.50% and 0.33%, respectively.

SoftBank Group Corp. (9984) saw a modest 0.16% loss, while KDDI Corp (9433) bucked the trend, rising by 0.73%.

Check out our economic calendar for today’s economic events.