Hang Seng Index, ASX200, Nikkei 225: Bears Remain in Control

Key Insights:

• It was a bearish start to the week, with the ASX 200 leading the Hang Seng Index and Nikkei into the red.
• The theme remained the same, with investor jitters over the economic outlook weighing on investor sentiment.
• There were no economic indicators from the region to change the mood.

Market Overview

It was a bearish morning session for the Asian markets. The ASX 200 led the way down, with the Hang Seng and the Nikkei also struggling.

The Asian equity markets tracked the US equity markets into the red, with fears of central banks sending the global economy into a recession weighing. Hawkish Fed Chair Powell testimony continued to resonate this morning. Last week’s Bank of England 50-basis point interest rate hike was a reminder of central bank commitments to tame inflation.

Despite softer US private sector PMI numbers on Friday, the markets are still betting on a Fed 25-basis point interest rate hike in July. According to the CME FedWatch Tool, the probability of a 25-basis point July Fed rate hike stood at 71.9% versus 74.4% one week ago.

Significantly, the chances of the Fed lifting rates to 5.75% in September stood at 11.5%, up from 8.9% one week earlier.

There were no economic indicators from the region to change the narrative this morning.

ASX 200

The ASX 200 was down 0.43%, with bank and mining stocks weighing.

The big-4 had a bearish morning. The National Australia Bank (NAB) and Westpac Banking Corp (WBC) were down 1.20% and 0.87%, respectively. ANZ Group (ANZ) and The Commonwealth Bank of Australia (CBA) also struggled, falling by 0.44% and 0.68%, respectively.

Mining stock had a bearish morning. Rio Tinto (RIO) and BHP Group Ltd (BHP) fell by 1.00% and 0.85%, respectively, with Fortescue Metals Group (FMG) down 0.56%. Newcrest Mining (NCM) bucked the trend, gaining 1.43%.

Oil stocks had a mixed morning. Woodside Energy Group (WDS) rose by 0.16%, while Santos Ltd (STO) fell by 0.14%. Brent Crude was up 0.04% to $73.88 this morning.

Hang Seng Index

The Hang Seng was down 0.14% this morning, with sentiment toward the Chinese economy and Fed policy weighing.

Considering the main components, both Tencent Holdings Ltd (HK:0700) fell by 0.65%, while Alibaba Group Holding Ltd (HK:9988) was up 0.12%.

Bank stocks also had a mixed morning. HSBC Holdings PLC and The Industrial and Commercial Bank of China (HK:1398) saw losses of 0.33% and 0.24%, respectively, while China Construction Bank (HK: 0939) rose by 0.40%.

CNOOC (HK: 0883) was up 0.91%.

Nikkei 225

The Nikkei 225 was down 0.08% this morning, with a weaker USD/JPY weighing.

From the banking sector, Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group fell by 0.18% and 0.74%, respectively.

Looking at the main components, Tokyo Electron Limited (8035) and KDDI Corp (9433) fell by 0.58% and 0.31%, respectively. Sony Corp (6758) and Fast Retailing Co (9983) saw losses of 0.15% and 0.28%, respectively, while SoftBank Group Corp. (9984) slipped by 0.03%.

Check out our economic calendar for economic events.