Hang Seng Index, ASX200, Nikkei 225: Private Sector PMIs Support

Key Insights:

• It was a mixed Tuesday, with the Hang Seng Index seeing red while the ASX 200 and Nikkei made early gains.
• A lack of progress toward a US debt ceiling deal weighed on risk sentiment, while upbeat private sector PMI numbers provided support.
• The US futures made gains this morning despite failed US debt ceiling talks, cushioning the downside for the Hang Seng Index.

Market Overview

It was a mixed Tuesday morning session for the Asian markets. The Hang Seng was on the back foot, while the ASX 200 and Nikkei 225 made modest gains.

There were no US economic indicators from Monday to set the tone this morning. However, investor sentiment toward the US debt ceiling crisis and Fed chatter provided early direction.

FOMC member Neel Kashkari was undecided about whether to vote in favor of an interest rate hike or hit the pause button next month. According to the CME FedWatch Tool, the probability of a 25-basis point interest rate hike increased from 17.4% on May 19 to 25.7% on Monday.

On Monday, the NASDAQ Composite Index and the S&P 500 saw gains of 0.50% and 0.02%, respectively, while the Dow fell by 0.42%.

This morning, news of US President Joe Biden and Speaker of the House Kevin McCarthy failing to reach an agreement to raise the debt ceiling was bearish.

However, the ASX 200 and the Nikkei found support from better-than-expected prelim private sector PMIs for May and early gains across the US futures markets.

This morning, the NASDAQ mini was up 40 points, with the Dow gaining 61.

ASX 200

The ASX 200 was up by 0.29%, with bank and mining stocks providing support. Australian private sector PMI numbers were market-friendly. According to prelim figures, the services PMI fell from 53.7 to 51.8 versus a forecasted 48.9, with the manufacturing PMI holding steady at 48.0. Economists forecast the manufacturing PMI to fall to 47.3.

The big-4 had a bullish morning. Westpac Banking Corp (WBC) gained 0.59%, with The Commonwealth Bank of Australia (CBA) and ANZ Group (ANZ) up by 0.31% and 0.46%, respectively. The National Australia Bank (NAB) trailed, rising by 0.26%.

However, mining stocks had a mixed morning. Rio Tinto (RIO) and Fortescue Metals Group (FMG) were up 0.97% and 0.54%, respectively, while BHP Group Ltd (BHP) was flat. Newcrest Mining (NCM) was down 1.24%.

Oil stocks had a bullish morning. Woodside Energy Group (WDS) and Santos Ltd (STO) rose by 0.53% and 0.47%, respectively. Brent Crude was up 0.36% to $76.26 this morning.

Hang Seng Index

The Hang Seng was down 0.20% this morning, with investors responding to the latest on the US debt ceiling crisis.

Considering the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) saw gains of 0.65% and 0.54%, respectively.

However, bank stocks had a mixed morning session. HSBC Holdings PLC and Industrial and Commercial Bank of China (HK:1398) were up 0.25% and 0.22%, respectively, while China Construction Bank (HK: 0939) fell by 0.37%.

CNOOC (HK: 0883) was up 0.16%.

Nikkei 225

The Nikkei 225 was up 0.27% this morning. A stronger USD/JPY from Monday and better-than-expected private sector PMIs provided support.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group saw gains of 0.53% and 0.70%, respectively.

Fast Retailing Co (9983) and SoftBank Group Corp. (9984) also found support, rising by 1.58% and 0.31%, respectively. However, Tokyo Electron Limited (8035) and Sony Corp (6758) saw losses of 0.48% and 0.88%, respectively, with KDDI Corp (9433) falling by 0.09%.

Check out our economic calendar for economic events.