Hang Seng Index, ASX200, Nikkei 225: China Stats Pare Gains

Key Insights:

• It was a mixed Tuesday morning, with the Hang Seng Index and Nikkei enjoying a bullish session while the ASX 200 struggled.
• Economic indicators from Australia and China drew interest following disappointing US manufacturing sector numbers.
• However, investors remained cautious ahead of US debt ceiling talks today.

Market Overview

It was a mixed Tuesday morning session for the Asian markets. The Hang Seng Index and Nikkei made gains, while the ASX 200 struggled.

Economic indicators from the US failed to spook investors this morning despite the NY Empire State Manufacturing Index tumbling in April. The NY Empire State Manufacturing Index fell from +10.8 to -31.8. Economists forecast a more modest decline to -3.75.

While hopes of progress toward raising the US debt ceiling also provided support, investors remained cautious. US President Joe Biden and House Speak Kevin McCarthy meet today to discuss the debt ceiling to avoid a US Government default on June 1.

However, economic data from China led to a pullback from early highs, with the latest stats providing further signs of a waning economy.

According to the National Bureau of Statistics, industrial production increased by 5.6% year-over-year in April versus a forecasted 10.9%. Industrial production rose by 3.9% in March. While falling short of forecasts, industrial production increased at the most marked pace since September 2022, when production increased by 6.3%.

Retail sales surged by 18.4% year-over-year versus 10.6% in March. Economists forecast a 21% increase. Fixed asset investments also fell short of expectations, rising by 4.7% year-over-year versus a forecasted 5.5%. However, unemployment numbers provided some comfort, with the unemployment rate falling from 5.3% to 5.2%.

ASX 200

The ASX 200 was down 0.16%, with consumer sentiment and the economic indicators from China weighing. Consumer sentiment waned in May, with the Westpac Consumer Sentiment Index falling 7.9%. The RBA’s surprise interest rate hike impacted consumer sentiment and the ASX 200.

The big-4 had a mixed morning. The Commonwealth Bank of Australia (CBA) bucked the trend, falling by 0.27%. However, Westpac Banking Corp (WBC) and the National Australia Bank (NAB) saw gains of 0.52% and 0.68%, respectively, with ANZ Group (ANZ) up 0.21%.

Mining stocks also had a mixed morning. Rio Tinto (RIO) and BHP Group Ltd (BHP) saw gains of 0.28% and 0.79%, respectively, while Fortescue Metals Group (FMG) fell by 0.07%. Newcrest Mining (NCM) was down 0.63%.

Oil stocks were flat. Woodside Energy Group (WDS) and Santos Ltd (STO) rose by 0.03% and 0.07%, respectively. Brent Crude was up 0.62% to $75.70 this morning.

Hang Seng Index

This morning, the Hang Seng was up 0.45%, with the China economic indicators paring early gains.

Considering the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) saw gains of 1.00% and 0.88%, respectively.

Bank stocks also had a bullish morning session. HSBC Holdings PLC rose by 0.76%, with the Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) rising by 0.90% and 0.56%, respectively.

CNOOC (HK: 0883) was up 1.24%.

Nikkei 225

The Nikkei 225 rose by 0.68% this morning, with sentiment toward Bank of Japan monetary policy and earnings providing support.

Sumitomo Mitsui Financial Group (8316) fell by 1.67%, while Mitsubishi UFJ Financial Group rose by 1.77%.

Considering the main components, Tokyo Electron Limited (8035) led the way, gaining 3.74%, with Fast Retailing Co (9983) and SoftBank Group Corp. (9984) seeing rising by 1.28% and 1.54%, respectively.

However, KDDI Corp (9433) was up by a more modest 0.13%, while Sony Corp (6758) declined by 0.78%.

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