Hang Seng Index, ASX200, Nikkei 225: Earnings Support the Nikkei

Key Insights:

• It was a mixed Thursday morning, with the Hang Seng Index and ASX 200 seeing red while the Nikkei enjoyed a breakout session.
• Investor angst over the US debt ceiling and the fear of a global economic recession weighed.
• However, earnings delivered the Nikkei a much-needed boost.

Market Overview

It was a mixed Friday morning session for the Asian markets. The Hang Seng Index and ASX 200 struggled with growth fears, while the Nikkei enjoyed a breakout session.

Economic indicators from the US failed to deliver morning support, despite softer wholesale inflation and rising jobless claims. Investor angst over the US Government’s failure to raise the debt ceiling continued to weigh on riskier assets.

Recessionary jitters also weighed. Recent economic indicators from China have flashed red, suggesting the Chinese economy is running out of gas. A manufacturing sector contraction and factory gate price deflation have sent the Hang Seng Index and ASX 200 into negative territory for a fourth consecutive session.

On Thursday, the NASDAQ Composite Index gained 0.18%, while the S&P 500 and Dow saw losses of 0.17% and 0.66%, respectively.

This morning, there were no economic indicators to distract investors, while corporate earnings delivered a bullish session for the Nikkei.

ASX 200

The ASX 200 was down 0.19%, with mining and oil stocks sending the index into the red.

The big-4 had a mixed morning. The Commonwealth Bank of Australia (CBA) and ANZ Group (ANZ) saw gains of 0.28% and 0.53%, respectively, with Westpac Banking Corp (WBC) rising 0.02%. However, the National Australia Bank (NAB) was down 0.11% to buck the trend.

Mining stocks had a bearish morning. Rio Tinto (RIO) and BHP Group Ltd (BHP) saw losses of 1.51% and 1.41%, respectively, with Fortescue Metals Group (FMG) falling by 1.19%. Newcrest Mining (NCM) was down 2.75%.

Oil stocks also struggled. Woodside Energy Group (WDS) and Santos Ltd (STO) saw losses of 1.01% and 1.11%, respectively. Brent Crude was down 0.39% to $74.69 this morning.

Hang Seng Index

This morning, the Hang Seng was down 0.12%, with economic growth worries weighing ahead of HK GDP numbers later today. Economists forecast the HK economy to expand by 5.3% in Q1 after stalling in Q4. While a return to growth is bullish, growth concerns about mainland China will likely limit the influence.

Considering the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) saw gains of 1.65% and 2.42%, respectively.

However, bank stocks had a bearish morning session. HSBC Holdings PLC fell by 1.02%, with the Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) seeing losses of 2.49% and 2.21%, respectively.

CNOOC (HK: 0883) declined by 0.94%.

Nikkei 225

The Nikkei 225 rose by 0.84% this morning, with a stronger USD/JPY and corporate earnings providing support.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group fell by 0.14% and 0.55%, respectively.

Considering the main components, Tokyo Electron Limited (8035) led the way, rising 2.23%, with KDDI Corp (9433) and Sony Corp (6758) both seeing gains of 1.99%. While Fast Retailing Co (9983) saw a more modest 1.19% gain, SoftBank Group Corp. (9984) bucked the broader market trend, falling by 2.98%

SoftBank hit reverse as investors responded to a record ¥4.3 trillion loss for its Vision Fund in the fiscal year ending March 2023.

In contrast, Tokyo Electron found support despite a gloomier outlook for the fiscal year ending 2024. However, the chip supplier beat profit estimates for 2023, with profits falling by a smaller-than-estimated 9.4%.

The auto sector also delivered support, with Honda (7267) and Nissan (7201) announcing solid earnings results. Honda jumped by 5.00%, with Nissan gaining 5.06%.

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