Hang Seng Index, ASX200, Nikkei 225: Bears Remain in the Driving Seat

Key Insights:

• It was a bearish Thursday session for the Asian equity markets, with the Nikkei leading the Hang Seng Index and ASX 200 into the red.
• The US downgrade to AA+ and a BoJ intervention weighed on investor sentiment.
• This morning, the RBA Monetary Policy Statement will draw interest while investors respond to the overnight US ISM Non-Manufacturing PMI numbers.

It was a bearish Thursday for the Hang Seng Index and the broader Asian markets. The Nikkei led the Hang Seng Index and ASX 200 into the red.

Better-than-expected US economic indicators from Wednesday failed to deliver support. Investors also brushed aside hotter-than-expected service sector PMI numbers from China and a widening Australian trade surplus. News of the Bank of Japan intervening to curb rising JGB yields weighed on riskier assets. The US sovereign rating downgrade to AA+ added to the bearish mood.

Today, no economic indicators from the economic calendar will influence. However, the RBA Monetary Policy Statement will impact Aussie bank stocks.

Investors will respond to the overnight US ISM Non-Manufacturing PMI figures. The all-important ISM Non-Manufacturing PMI fell from 53.9 to 52.7 in July versus a forecasted 53.0, with the sub-components drawing interest. A fall in employment and an upswing in the price sub-components sent bearish signals. Significantly, the ISM Non-Manufacturing Prices sub-Index rose from 54.1 to 56.8.

After the US closing bell, Amazon.com (AMZN) and Apple (AAPL) beat earnings forecasts, which could limit the impact of the softer service PMI numbers.

The US equity markets responded further to the Fitch Ratings downgrade and economic indicators. The NASDAQ Composite Index slipped by 0.10%. On Thursday, the Dow and the S&P 500 saw losses of 0.19% and 0.25%, respectively.

ASX 200

The ASX 200 declined by 0.58% on Thursday, with investors ignoring better-than-expected trade data. Investors responded to the US sovereign rating downgrade to AA+.

On Thursday, The Commonwealth Bank of Australia (CBA) and The National Australia Bank (NAB)saw losses of 0.97% and 0.64%, respectively. ANZ Group (ANZ) and Westpac Banking Corp (WBC) declined by 0.36% and 0.36%, respectively.

Mining stocks also had a bearish session, with Fortescue Metals Group and BHP Group Ltd (BHP) falling by 1.25% and 1.18%, respectively. Newcrest Mining (NCM) declined by 0.98%, with Rio Tinto sliding by 1.68%.

Oil stocks had a bearish session. Woodside Energy Group (WDS) and Santos Ltd (STO) declined by 0.74% and 0.76%, respectively.

Hang Seng Index

The Hang Seng Index fell by 0.49% despite better-than-expected services PMI numbers from China.

Considering the main Index components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) fell by 0.35% and 2.10%, respectively.

Bank stocks also had a bearish session. HSBC Holdings PLC slid by 2.02%. The Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) ended the day down 0.54% and 0.46%, respectively.

CNOOC (HK: 0883) fell by 1.62%.

Nikkei 225

(For reference purposes only)

The Nikkei 225 tumbled by 1.68% on Thursday, with the BoJ intervention doing the damage.

The banks had a bearish session. Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group declined by 0.14% and 0.31%, respectively.

Looking at the main components, Sony Corp (6758) slid by 2.27%, with KDDI Corp (9433) falling by 1.30%. Fast Retailing Co (9983) and Tokyo Electron Limited (8035) saw losses of 1.13% and 1.11%, respectively. SoftBank Group Corp. (9984) fell by a more modest 0.77%.

Check out our economic calendar for economic events.