Hang Seng Index, ASX200, Nikkei 225: Hang Seng Bucks a Bearish Trend

• It was a mixed morning for the Asian markets, with the Hang Seng Index finding support while the ASX 200 and the Nikkei saw red.
• The Asian markets responded to the overnight Fed policy move, FOMC Projections, and the Fed Chair Powell press conference.
• There were no economic indicators to distract investors this morning, with expectations of a Fed pause on rate hikes supporting the Hang Seng Index.

Market Overview

It was a mixed morning for the Asian markets. The Hang Seng Index led the way, while the ASX 200 and the Nikkei struggled.

Investors responded to the overnight Fed interest rate hike, FOMC Projections, and Fed Chair Powell’s press conference.

On Wednesday, the Fed lifted rates by 25 basis points, in line with expectations. However, an upward revision to the median Federal Funds Rate to 4.3% and an unchanged 2023 peak of 5.1% were hawkish.

Fed Chair Powell poured cold water on hawkish sentiment during the press conference. While acknowledging that economic indicators came in stronger than expected, Powell discussed the possible influences of the banking sector on monetary policy, saying,

“We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation. Instead, we now anticipate that some additional policy firming may be appropriate.”

The Fed Chair also talked of a credit crunch that would have disinflationary effects, enabling the Fed to hit pause.

The NASDAQ Composite Index fell by 1.60% on Wednesday, with the Dow and S&P 500 seeing losses of 1.63% and 1.65%, respectively. However, market conditions improved this morning, with the NASDAQ mini up 60.25 points. The Dow mini was up 142 points, supporting the Asian markets this morning. There were no economic indicators from the region to distract investors.

ASX 200

The ASX 200 was down 0.61%, with mining and bank stocks hitting reverse. There were no economic indicators to move the dial.

It was a bearish morning for the big-4. National Australia Bank (NAB) was down 0.82%, with ANZ Group (ANZ) falling by 0.48%. Commonwealth Bank of Australia (CBA) and Westpac Banking Corp (WBC) saw modest losses of 0.23% and 0.09%, respectively.

Mining stocks were also in the red. Rio Tinto (RIO) and BHP Group Ltd (BHP) fell by 0.88% and 0.64%, respectively, with Fortescue Metals Group (FMG) down 2.66%. Newcrest Mining (NCM) bucked the trend, rising by 1.23%.

Oil stocks joined the broader market in the red. Woodside Energy Group (WDS) and Santos Ltd (STO) declined by 0.70% and 1.07%, respectively. Crude oil prices were back in the red this morning, with Brent Crude down 0.83% to $76.05.

Hang Seng Index

The Hang Seng was up 0.78% this morning. Bets of a Fed pause on interest rate hikes provided support. However, the upside was modest, with concerns over a credit crunch and the knock-on effects on the US economy weighing.

Considering the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) rose by 5.65% and 1.75%, respectively.

It was a mixed morning for banking stocks. HSBC Holdings PLC and China Construction Bank (HK: 0939) saw losses of 0.37% and 0.20%, respectively, while Industrial and Commercial Bank of China (HK:1398) rose by 0.47%.

CNOOC (HK: 0883) was up by 1.23%.

Nikkei 225

The Nikkei 225 was down 0.29% this morning, with the weaker USD/JPY weighing.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group fell by 1.44% and 1.97%, respectively.

Sony Corp (6758) and KDDI Corp (9433) fell by 1.41% and 1.48%, respectively, with SoftBank Group Corp. (9984) and Fast Retailing Co (9983) seeing losses of 0.96% and 0.91%, respectively. Tokyo Electron (8035) bucked the trend, rising by 1.12%.

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