Hang Seng Index, ASX200, Nikkei 225: Hang Seng Leads

Key Insights:

• It was a mixed Wednesday morning, with the Nikkei seeing red while the Hang Seng Index and ASX 200 found support.
• Investor bets on a Fed pause and hopes of stimulus to kickstart the Chinese economy provided support.
• GDP numbers from Australia and trade data from China disappointed but failed to drag the ASX 200 and Hang Seng Index into the red.

Market Overview

It was a mixed Wednesday morning session for the Asian markets. The ASX 200 and Hang Seng Index tracked the US equity markets into positive territory, while the Nikkei stumbled on global growth concerns.

There were no US economic indicators for investors to consider this morning, leaving sentiment toward the Fed to move the dial. Following the disappointing ISM survey-based manufacturing and services PMIs and the rise in the US unemployment rate, investors continue to bet on a Fed pause in June.

According to the CME FedWatch Tool, the probability of a 25-basis point June interest rate hike slipped from 24.1% to 19.4% on Tuesday versus 66.6% one week earlier.

This morning, economic data from Australia and China had a limited impact on the ASX 200 and the Hang Seng Index.

China’s USD trade surplus narrowed from $90.21 billion to $65.81 billion in May versus a forecasted $71.60 billion. Significantly, exports tumbled by 7.5% year-over-year, with imports down by 4.5%. Economists forecast exports to rise by 8.0% and imports to fall by 8.0%.

ASX 200

The ASX 200 was up by 0.14%, with mining stocks providing support. Economic indicators were a drag this morning, with the Australian economy growing more slowly than forecast in Q1. In Q1, the Australian economy expanded by 0.2% versus a forecast of 0.8%.

The big-4 had a mixed morning. ANZ Group (ANZ) bucked the trend, gaining 0.22%. However, Westpac Banking Corp (WBC) and The National Australia Bank (NAB) fell by 0.86% and 0.91%, respectively. The Commonwealth Bank of Australia (CBA) was down 0.22%.

Oil stocks had a bearish morning. Woodside Energy Group (WDS) and Santos Ltd (STO) declined by 0.52% and 1.07%, respectively. Brent Crude was down 0.45% to $75.95 this morning.

However, mining stocks found support. Rio Tinto (RIO) and BHP Group Ltd (BHP) were up 0.58% and 0.50%, respectively, with Newcrest Mining (NCM) rising by 0.34%. However, Fortescue Metals Group (FMG) slipped by 0.44%.

Hang Seng Index

The Hang Seng was up 0.97% this morning on China stimulus hopes.

Considering the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) gained 1.69% and 1.70%, respectively.

Bank stocks also had a bullish morning session. HSBC Holdings PLC rose 1.02%, with the Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) seeing gains of 0.94% and 0.79%, respectively.

CNOOC (HK: 0883) rose by 0.33%.

Nikkei 225

The Nikkei 225 was down 1.18% this morning, with the trade data from China a drag.

Sumitomo Mitsui Financial Group (8316) rose by 0.30%, while Mitsubishi UFJ Financial Group fell by 0.46%.

Looking at the main components, Tokyo Electron Limited (8035) slid by 2.39%, with Fast Retailing Co (9983) and Sony Corp (6758) seeing losses of 0.63% and 0.68%, respectively. SoftBank Group Corp. (9984) also saw red, falling by 0.43%, while KDDI Corp (9433) gained 0.50%.

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