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

• It was a mixed morning for the Asian markets, with the Hang Seng Index and the ASX 200 enjoying a bullish morning.
• Easing Silicon Valley Bank (SVIB) contagion risk and economic indicators from the US and China supported a Hang Seng Index rally.
• However, the Nikkei struggled with the USD/JPY at sub-135.

Market Overview

It was a mixed morning for the Asian markets. The Hang Seng Index and the ASX 200 responded favorably to economic indicators from China.

Industrial production increased by 2.4% year-over-year in February versus 1.3% in January. Retail sales increased by 3.5%, reversing a 1.8% fall from January. Economists forecast retail sales to rise by 1.5% and industrial production to increase by 2.6%.

Other stats included fixed asset investments and unemployment numbers. Fixed asset investments increased by 5.5% versus a 5.1% rise in January. Economists expected fixed asset investments to increase by 4.4% year-over-year. China’s unemployment rate increased from 5.5% to 5.6%.

While the pickup in industrial production provided support, the numbers were disappointing relative to the February PMI numbers. Production fell short of expectations, while China’s unemployment rate inched higher.

Easing Silicon Valley Bank (SIVB) and Signature Bank (SBNY) contagion fears supported bank stocks, with the latest US CPI report also market-friendly. In February, the annual inflation rate softened from 6.4% to 6.0%, in line with forecasts. The softer headline figure supported a less aggressive Fed interest rate trajectory to bring inflation to target.

On Tuesday, the NASDAQ Composite Index rallied by 2.14%, with the Dow and S&P 500 seeing gains of 1.06% and 1.65%, respectively. This morning, the NASDAQ mini was up 13.75 points, with the Dow mini rising by 7.

US retail sales and wholesale inflation figures could nudge bets of a 50-basis point Fed interest rate higher.

ASX 200

The ASX 200 was up 0.78%. There were no Australian economic indicators to influence, leaving bank and mining stocks to deliver support. While disappointing, the numbers from China were good enough to drive demand for mining stocks, easing Silicon Valley Bank contagion jitters supported bank stocks.

Bank stocks were mixed. ANZ Group (ANZ) was up 1.08%, with Westpac Banking Corp (WBC) gaining 0.91%. National Australia Bank (NAB) rose by 0.61%, while the Commonwealth Bank of Australia (CBA) was flat.

Mining stocks enjoyed a bullish session. Rio Tinto (RIO) and BHP Group Ltd (BHP) were up by 1.26% and 1.22%, respectively, with Fortescue Metals Group (FMG) up 1.10%. However, Newcrest Mining (NCM) slipped by 0.10%.

Oil stocks had a mixed morning. Woodside Energy Group (WDS) fell by 0.63%, while Santos Ltd (STO) was up 0.84%. The mixed session came despite a bullish morning for crude oil, with WTI and Brent up 1.50% and 1.37%, respectively. Tuesday’s rout placed oil stocks under pressure.

Hang Seng Index

The Hang Seng was up 1.26% this morning as investors responded to the US CPI report and the economic indicators from China. Easing banking sector contagion fears also provided support.

Looking at the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) rose by 1.17% and 2.31%, respectively.

It was a bullish morning for banking stocks. HSBC Holdings PLC rallied by 2.24%, with China Construction Bank (HK: 0939) and Industrial and Commercial Bank of China (HK:1398) seeing gains of 1.83% and 1.94%, respectively.

CNOOC (HK: 0883) was flat.

Nikkei 225

The Nikkei 225 was down 0.88% this morning, with a weaker USD/JPY at sub-135 testing support. There were no economic indicators from Japan for investors to consider. Dated Bank of Japan monetary policy meeting minutes failed to move the dial while financial stocks found support. Sumitomo Mitsui Financial Group (8316) rose by 2.94%, with Mitsubishi UFJ Financial Group rallying by 4.93%.

Looking at the main components, it was a mixed morning. SoftBank Group Corp. (9984) and Fast Retailing Co (9983) fell by 1.41% and 1.37%, respectively. However, Sony Corp (6758) and Tokyo Electron saw gains of 0.35% and 0.49%, respectively, with KDDI Corp (9433) rising by 0.12%.

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