Hang Seng Index, Nikkei 225, ASX 200: Tech Puts the Hang Seng and 19,500 in Focus

US Equity Markets: Fed Speakers Dampen Rate Cut Bets

Fed speeches continued drawing investor attention. FOMC members Michael Barr, Thomas Barkin, Christopher Waller, John Williams, and Raphael Bostic were on the calendar to speak on Tuesday (May 21).

The FOMC members echoed the consensus of higher for longer. Christopher Waller discussed the need for several months of favorable inflation numbers before being willing to support rate cuts. Christopher Waller also dismissed rate hike chatter, saying the chances of a rate hike were very low.

On Tuesday (May 21), the Dow advanced by 0.22%. The Nasdaq Composite Index and S&P 500 saw gains of 0.22% and 0.25%, respectively.

Fed chatter from Tuesday and US equity market trends will likely set the tone for the Wednesday (May 22) Asian session.

Asian Economic Calendar: Japanese Economy and the Bank of Japan

On Wednesday (May 22), the Japanese economy will put the Bank of Japan, the Japanese Yen, and the Nikkei Index in focus.

The Reuters Tankan Index and trade data warrant investor attention. Economists forecast the Reuters Tankan Index to decline from 9 to 7 in May. Furthermore, economists expect the trade deficit to narrow from ¥366.5 billion to ¥339.5 billion in April.

After the larger-than-expected economic contraction in Q1 2024, second-quarter data could signal a shift in the macroeconomic environment. Better-than-expected numbers may fuel speculation of a June BoJ interest rate hike.

Nevertheless, investors should also monitor Bank of Japan chatter with the Japanese economy in focus. Views on inflation and the timing of a BoJ rate hike could move the dial.

Commodities: Crude Oil, Gold, and Iron Ore

On Tuesday (May 21), gold spot (XAU/USD) fell by 0.22% to close the session at $2,420.75. WTI crude oil declined by 0.68%, ending the Tuesday session at $79.26.

On the Singapore Futures Exchange, iron ore prices were up 0.15% on Wednesday (May 22). Iron ore spot rallied 2.06% on Tuesday (May 21).

The USD/JPY and the Nikkei

The USD/JPY slipped by 0.07% on Tuesday (May 21), ending the session at 156.133. A weaker USD/JPY could impact buyer appetite for Nikkei Index-listed export stocks. Nevertheless, downward USD/JPY price trends would reduce intervention risk.

The Futures Markets

On Wednesday (May 22), the ASX 200 was up 21 points, while the Nikkei Index declined by 70 points.

ASX 200

The ASX 200 declined by 0.15% on Tuesday (May 21). Gold, mining, and oil stocks contributed to the losses. However, tech stocks limited the downside. The S&P/ASX All Tech Index gained 0.70%.

Gold-related stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) saw losses of 1.19% and 0.99%, respectively.

Oil stocks Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) fell by 0.32% and 0.13%, respectively.

However, mining and bank stocks had mixed sessions.

Fortescue Metals Group Ltd. (FMG) and Rio Tinto Group Ltd. (RIO) declined by 0.84% and 1.31%, respectively. BHP Group Ltd (BHP) gained 0.70% on sentiment toward the bid to take over Anglo American.

ANZ Group Holdings Ltd. (ANZ) advanced by 0.46%. Commonwealth Bank of Australia (CBA) gained 0.02%, with Westpac Banking Corp. (WBC) rising by 0.37%. However, National Australia Bank Ltd. (NAB) ended the session down 0.06%.

Hang Seng Index

The Hang Seng Index slid by 2.12% on Tuesday (May 21). Tech stocks tumbled, with real estate stocks ending the session in negative territory. The Hang Seng Mainland Properties Index (HSMPI) and the Hang Seng Tech Index (HSTECH) saw losses of 1.74% and 3.74%, respectively.

Baidu (9888) and Tencent Holdings (0700) slid by 4.28% and 2.89%, respectively. Alibaba (9988) fell by 1.11%.

However, bank stocks had a mixed session. HSBC (0005) and China Construction Bank (0939) ended the session down 0.36% and 0.51%, respectively. Industrial Commercial Bank (1398) gained 0.63%.

The Nikkei Index

(Graph for reference purposes only)

The Nikkei Index fell by 0.31% on Tuesday (May 21).

Bank stocks had a mixed session. Sumitomo Mitsui Financial Group Inc. (8316) gained 0.01%, while Mitsubishi UFJ Financial Group Inc. (8306) fell by 0.70%.

It was also a mixed session for the main components of the Nikkei Index.

Fast Retailing Co. Ltd. (9983) and Tokyo Electron Ltd. (8035) advanced by 0.22% and 0.80%, respectively.

However, Softbank Group Corp. (9984) and Sony Group Corporation (6758) saw losses of 1.64% and 1.42%, respectively. KDDI Corp. (9433) declined by 0.73%.

For upcoming economic events, refer to our economic calendar.