Hang Seng Index, ASX200, Nikkei 225: China Trade Data to Set the Mood

Key Insights:

• It was a mixed start to the week, with the ASX 200 and Hang Seng Index seeing red, while the Nikkei found support on Monday.
• Investors were cautious with inflation numbers from China and the US in focus this week.
• This morning, investors will respond to economic indicators from Australia, Japan, and, more importantly, China.

It was a mixed Monday session for the Hang Seng Index and the broader Asian markets. The Hang Seng Index and the ASX 200 saw red, while the Nikkei made modest gains.

The US Jobs Report from Friday failed to spook investors despite resilient wage growth and a fall in the US unemployment rate. Softer-than-expected nonfarm payroll numbers limited the impact of the Jobs Report on market risk sentiment.

However, investors were cautious ahead of inflation numbers from China and the US that could give the Fed hawks the upper hand.

There were no economic indicators from the Monday Asian session to move the dial.

Today, the Asian economic calendar is on the busy side. Household spending figures from Japan kickstart the session. A sharp pickup in household spending would support a more optimistic economic outlook and question the Bank of Japan’s ultra-loose monetary policy stance.

However, trade data from China will be the focal point later in the session. A more marked decline in imports and exports would align with the July PMI numbers and fuel recessionary jitters. The economic indicators from China will likely trump business confidence numbers from Australia.

From the Monday US session, investors will need to consider Fed chatter. FOMC member John Williams talked about rate cuts in 2024 if inflation softens. In contrast, FOMC member Michelle Bowman said more rate hikes will likely be needed. However, as vice chair of the Fed, Williams has more influence on the markets.

The NASDAQ Composite Index rose by 0.61%. On Monday, the Dow and the S&P 500 saw gains of 1.16% and 0.90%, respectively, setting the ASX 200 up for a bullish start to the day.

ASX 200

The ASX 200 declined by 0.22% on Monday, with bank and mining stocks leaving the Index in negative territory.

On Monday, ANZ Group (ANZ) and Westpac Banking Corp (WBC) saw losses of 0.59% and 0.68%, respectively. The Commonwealth Bank of Australia (CBA) slipped by 0.02%, while The National Australia Bank (NAB) bucked the broader market trend, rising by 0.04%.

Mining stocks had a bearish session, with Rio Tinto and BHP Group Ltd (BHP) ending the day down 0.78% and 0.50%, respectively. Fortescue Metals Group slid by 1.59%, while Newcrest Mining (NCM) rose by 0.15%.

Oil stocks had a bullish session. Woodside Energy Group (WDS) and Santos Ltd (STO) gained 0.63% and 0.25%, respectively.

Hang Seng Index

The Hang Seng Index slipped by 0.01% on Monday.

Considering the main Index components, Tencent Holdings Ltd (HK:0700) fell by 0.64%, while Alibaba Group Holding Ltd (HK:9988) rose by 0.47%.

Bank stocks had a mixed session. HSBC Holdings PLC gained 0.16%, while The Industrial and Commercial Bank of China (HK:1398) ended the day flat. China Construction Bank (HK: 0939) fell by 0.46%.

CNOOC (HK: 0883) rallied 2.61%.

Nikkei 225

(For reference purposes only)

The Nikkei 225 found further support after a bullish Friday session, gaining 0.19%. A stronger USD/JPY and reports of the Japan Government unlikely to intervene further in the FX markets to prop up the Yen provided support.

The banks had a bearish session. Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group saw losses of 1.03% and 0.96%, respectively.

Looking at the main components, SoftBank Group Corp. (9984) and Tokyo Electron Limited (8035) ended the day down 0.89% and 1.04%, respectively. Fast Retailing Co (9983) fell by 0.71%, with Sony Corp (6758) declining by a modest 0.08%.

However, KDDI Corp (9433) bucked the broader market trend, rising by 1.06%.

Check out our economic calendar for economic events.