Hang Seng Index, ASX200, Nikkei 225: Hang Seng Sees Red on Bank Woes

• It was a bearish Friday morning for the Asian markets, with the Hang Seng Index on target to end a three-day winning streak.
• Investor angst over the banking sector and Powell’s warning of an imminent credit crunch weighed on investor sentiment.
• Economic indicators from Australia and Japan failed to distract investors from the influences of the Fed.

Market Overview

It was a bearish morning for the Asian markets. The Hang Seng Index fell by 0.23%, with the ASX 200 and the Nikkei also struggling.

Investor jitters over the banking sector and Fed Chair Powell’s warning of a credit crunch weighed on the Asian indices. US Treasury Secretary and former Fed Chair Janet Yellen tried to ease investor tensions overnight.

Yellen assured investors that bank deposits are safe and policymakers have the tools to tackle a banking crisis. Speaking at the House of Representatives Appropriations subcommittee hearing, the former Fed Chair reportedly said,

“The strong actions we have taken to ensure that Americans’ deposits are safe. Certainly, we would be prepared to take additional actions if warranted.”

Despite Yellen’s best efforts, US bank stocks ended the Thursday session with heavy losses. However, the NASDAQ Composite Index rose by 1.01%, with the Dow and S&P 500 seeing gains of 0.23% and 0.30%, respectively.

ASX 200

The ASX 200 was down 0.19%, with bank stocks weighing. Economic indicators were also bearish, with Australia’s private sector contracting in March.

According to prelim figures, the Services PMI fell from 50.7 to 48.2 (3-month low), with the Manufacturing PMI declining from 50.5 to 48.7 (34-month low). Economists forecast the PMIs to fall to 50.5 and 50.4, respectively.

It was a bearish morning for the big-4. National Australia Bank (NAB) and the Commonwealth Bank of Australia (CBA) fell by 1.99% and 1.67%, respectively. ANZ Group (ANZ) and Westpac Banking Corp (WBC) saw losses of 1.01% and 0.91%, respectively.

Mining stocks found much-needed support. Rio Tinto (RIO) and BHP Group Ltd (BHP) rose by 0.25% and 0.30%, respectively, with Fortescue Metals Group (FMG) up 1.43%. Newcrest Mining (NCM) gained 1.32%.

It was a mixed session for oil stocks, however. Woodside Energy Group (WDS) rose by 0.02%, while Santos Ltd (STO) fell by 0.29%. Crude oil prices were back in the red this morning, with Brent Crude down 0.47% to $75.55.

Hang Seng Index

The Hang Seng was down 0.23% this morning. Bank stocks weighed while Tencent Holdings Limited (0700.HK) cushioned the downside.

Considering the main components, Tencent Holdings Ltd (HK:0700) was up 1.33%, while Alibaba Group Holding Ltd (HK:9988) fell by 0.75%.

It was a bearish morning for banking stocks. HSBC Holdings PLC slid by 2.79%, with China Construction Bank (HK: 0939) and Industrial and Commercial Bank of China (HK:1398) seeing losses of 0.97% and 1.17%, respectively.

CNOOC (HK: 0883) was down 1.57% in response to the latest pullback in crude oil prices.

Nikkei 225

The Nikkei 225 was down 0.17% this morning, with the weaker USD/JPY contributing to the pullback. Economic indicators failed to provide support despite a pickup in service sector activity and softer inflation numbers.

The annual inflation rate softened from 4.3% to 3.3% in February, supporting the Bank of Japan’s ultra-loose monetary policy position. According to prelim figures, Japan’s services PMI rose from 54.0 to 54.2, with the manufacturing PMI rising from 47.7 to 48.6. Economists forecast PMIs of 52.0 and 48.8, respectively.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group fell by 0.23% and 1.05%, respectively.

Looking at the main components, Fast Retailing Co (9983) fell by 1.16%, with KDDI Corp (9433) and SoftBank Group Corp. (9984) seeing losses of 0.15% and 0.04%, respectively.

Sony Corp (6758) and Tokyo Electron (8035) bucked the trend, rising by 0.22% and 1.73%, respectively.

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