Hang Seng Index, ASX200, Nikkei 225: US Earnings Deliver Support

• It was a bullish Friday morning for the Asian markets, with the Hang Seng Index leading the Asian markets.
• US corporate earnings supported a bullish session for the US equity markets, delivering the bullish morning session.
• Softer producer price index numbers from Australia and better-than-expected retail sales and industrial production figures from Japan supported the respective indexes.

Market Overview

It was a bullish Friday morning for the Asian markets. The Hang Seng Index led the way, with the ASX 200 and the Nikkei also on the move.

Investors brushed aside disappointing Q1 GDP numbers from the US, with US corporate earnings supporting the bullish morning.

After better-than-forecasted earnings results from Microsoft (MSFT), Alphabet Inc. (GOOGL), and Meta Platforms (META), Amazon.com (AMZN) beat earnings forecasts to drive demand for riskier assets.

The morning gains came despite US economic growth slowing from 2.6% in Q4 to 1.1% in Q1. Economists forecast growth of 2.0%. While growth slowed, labor market conditions remained tight, with initial jobless claims falling from 246k to 230k.

The mixed economic indicators from the US failed to reduce bets on a 25-basis point Fed interest rate hike in May. This morning, the probability of a 25-basis point Fed interest rate hike in May stood at 87.4%, up from 72.2% on Thursday, according to the CME FedWatch Tool. There is a 24.8% chance of a 25-basis point June interest rate hike, up from 13.7% on Thursday.

Later this morning, the Bank of Japan will deliver its first monetary policy decision under Kazuo Ueda. The markets are expecting the BoJ to stand pat. However, adjustments to forward guidance would catch investors off-guard.

While investors await the BoJ monetary policy decision, US economic and earnings calendars need consideration. The all-important Core PCE Price Index numbers, personal income, and spending figures are due, with Exxon Mobil (XOM) and Chevron (CVX) earnings also out later today.

On Thursday, the NASDAQ Composite Index jumped by 2.43%, with the Dow and S&P 500 seeing gains of 1.57% and 1.96%, respectively. However, the NASDAQ mini was down 20.5 points this morning, with the Dow falling by 29.

ASX 200

The ASX 200 was up 0.33%. Mining stocks and the big-4 delivered support. Australian wholesale inflation numbers for March contributed to the upside, with the Producer Price Index rising at a less marked rate.

The big-4 had a bullish morning. ANZ Group (ANZ) and Westpac Banking Corp (WBC) were up 1.04% and 1.17%, respectively. The National Australia Bank (NAB) and The Commonwealth Bank of Australia (CBA) saw gains of 0.78% and 0.77%, respectively.

Mining stocks also had a bullish morning. Rio Tinto (RIO) and BHP Group Ltd (BHP) rose by 0.19% and 0.29%, respectively, with Fortescue Metals Group (FMG) gaining 0.10%. Newcrest Mining (NCM) was up 0.84%.

However, oil stocks had a mixed session. Woodside Energy Group (WDS) fell by 0.12%, while Santos Ltd (STO) was flat. Brent Crude was up 0.18% to $78.51 this morning.

Hang Seng Index

The Hang Seng was up 0.78% this morning, with US corporate earnings providing support.

Considering the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) rose by 1.28% and 1.28%, respectively.

It was also a bullish morning for bank stocks. The Industrial and Commercial Bank of China (HK:1398) and HSBC Holdings PLC saw gains of 0.95% and 0.53%, respectively, with China Construction Bank (HK: 0939) rising by 0.19%.

CNOOC (HK: 0883) was up 2.42%.

Nikkei 225

The Nikkei 225 was up 0.70% this morning. Better-than-expected industrial production and retail sales figures delivered support ahead of the Bank of Japan monetary policy decision.

Retail sales increased 7.2% in March year-over-year versus a forecasted 5.8%. Industrial production rose by 0.8% versus forecasts of a 0.5% increase. However, inflation accelerated in April, with Tokyo’s annual inflation rate up from 3.2% to 3.5%.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group saw gains of 1.05% and 0.80%, respectively.

Looking at the main components, Tokyo Electron Limited (8035) and SoftBank Group Corp. (9984) rose by 1.32% and 1.23%, respectively, with KDDI Corp (9433) up 1.15%.

Sony Corp (6758) and Fast Retailing Co (9983) also found support, rising by 1.07% and 0.22%, respectively.

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