Hang Seng Index, ASX200, Nikkei 225: Nikkei Makes a Move

• It was a bullish start to the week, with the ASX 200 and the Nikkei making solid gains off a bullish Friday session on Wall Street.
• US corporate earnings limited the impact of US economic indicators on market risk sentiment.
• This morning, economic indicators from the region had a limited impact as investors tracked First Republic Bank-related news.

Market Overview

It was a bullish start to the week for the Asian markets. The ASX 200 and the Nikkei made solid gains on Labor Day, while the Hong Markets were closed.

Disappointing economic indicators from China failed to weigh on investor sentiment. The NBS Manufacturing PMI fell from 51.9 to 49.2, with the Non-Manufacturing PMI declining from 58.2 to 56.4. The contraction in the manufacturing sector was significant, with the post-COVID recovery running out of steam.

However, progress toward saving First Republic Bank (FRC) delivered support.

On Sunday, news hit the wires of US regulators attempting to avert a banking crisis by selling the beleaguered bank to a large US bank. JP Morgan Chase (JPM) was reportedly the front-runner. Overnight, news of PNC Financial Services (PNC), JPMorgan, Citizens Financial Group (CFG), and other banks submitting bids in a First Republic Bank auction eased bets on another US bank collapse.

US economic indicators from Friday also failed to spook investors despite sticky inflation and weak consumer spending in March.

Corporate earnings continued to support the global equity markets despite the recessionary alarm bells ringing and the Fed on target to deliver a 25-basis point interest rate hike on Wednesday.

This morning, the probability of a 25-basis point Fed interest rate hike in May stood at 85.2%, up from 83.9% on Friday, according to the CME FedWatch Tool. There is a 20.8% chance of a 25-basis point June interest rate hike, down from 23.9% on Friday.

On Friday, the NASDAQ Composite Index rose by 0.69%, with the Dow and S&P 500 seeing gains of 0.80% and 0.83%, respectively. This morning, the NASDAQ mini was up 12.5 points, with the Dow rising by 4.

ASX 200

The ASX 200 was up 0.54%. The big-4 supported a bullish session.

The big-4 had a bullish morning. ANZ Group (ANZ) and Westpac Banking Corp (WBC) were up 0.62% and 0.71%, respectively. However, The National Australia Bank (NAB) and The Commonwealth Bank of Australia (CBA) led the way, rising by 1.04% and 1.09%, respectively.

Mining stocks had a mixed morning. Rio Tinto (RIO) and Fortescue Metals Group (FMG) rose by 0.02% and 0.02%, respectively, while BHP Group Ltd (BHP) fell by 0.43%. Newcrest Mining (NCM) was down 1.68%.

However, oil stocks had a bullish session. Woodside Energy Group (WDS) and Santos Ltd (STO) were up by 0.98% and 2.76%, respectively. Brent Crude was down 0.77% to $79.71 this morning.

Hang Seng Index

The Hong Kong Markets are closed for Labor Day. On Friday, the Hang Seng rose by 0.27% to end the day at 19,895.

Considering the main components, Tencent Holdings Ltd (HK:0700) fell by 0.17%, while Alibaba Group Holding Ltd (HK:9988) rose by 0.31%.

It was a mixed session for bank stocks. The Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) ended the day flat, while HSBC Holdings PLC fell by 0.18%.

CNOOC (HK: 0883) rose by 3.06%.

Nikkei 225

The Nikkei 225 was up 0.97% this morning. The Bank of Japan monetary policy decision and forward guidance from Friday and the resulting slide in the USD/JPY supported the bullish session.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group saw gains of 1.33% and 1.35%, respectively.

Looking at the main components, Tokyo Electron Limited (8035) and Sony Corp (6758) fell by 0.03% and 2.84%, respectively. While Sony Corp beat earnings estimates on Friday, a negative outlook weighed this morning.

However, SoftBank Group Corp. (9984) rose by 1.14, with KDDI Corp (9433) and Fast Retailing Co (9983) seeing gains of 0.52% and 0.97%, respectively.

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