Hang Seng Index, Nikkei 225, ASX 200: US Equity Market Moves Set Tone for Asian Session

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Updated: Mar 13, 2024, 23:17 UTC

Key Points:

It was another mixed Asian session on Wednesday, with the Hang Seng Index and Nikkei ending the day in negative territory.
Updates on wage negotiations in Japan pressured the Nikkei, as investors raised bets on a March Bank of Japan pivot from negative rates.
On Thursday, overnight movements across the US equity markets will set the tone for the session. Bank of Japan commentary also needs consideration.

Overview of the Wednesday Session

On Wednesday, the Hang Seng Index and Nikkei ended the session in negative territory. The ASX 200 bucked the broader market trend with a positive mid-week session.

Overnight US inflation numbers from Tuesday failed to spook investors despite hotter-than-expected inflation figures. The US annual inflation rate rose from 3.1% to 3.2% in February. Core inflation eased from 3.9% to 3.8%. US Treasuries reacted to the US CPI Report. 10-year US Treasury yields increased by 1.29%, ending the session at 4.153%.

Tech stocks brushed aside the uptrend in yields, leading the US equity markets into positive territory. On Tuesday, the Nasdaq Composite Index rallied 1.54%. The S&P 500 and the Dow gained 1.12% and 0.61%, respectively.

The US equity markets set the tone for the Wednesday session, with the ASX 200 and Nikkei opening in positive territory.

However, updates on wage negotiations from Japan pressured the Nikkei. Toyota Motor Corp. (7203), a leading indicator of wage negotiations, reportedly agreed to union demands for wage increases. On Wednesday, Toyota Motor Corp. gave factory workers the most marked increase in pay in 25 years.

News of rising mortgage defaults in China impacted Hang Seng-listed real estate stocks. Tech stocks gave up early gains. In contrast, the ASX 200 tracked the overnight gains from the US. Bank and retail stocks were among the front-runners.

US Equity Market Moves and the Bank of Japan in Focus

On Thursday, the US equity market session from Wednesday will set the tone for the session. There were no US economic indicators for investors to consider on Thursday.

10-year US Treasury yields gained 0.94%, ending the session at 4.192%. Caution ahead of US retail sales and producer price numbers, out on Thursday, impacted market risk sentiment mid-week.

On Wednesday, the Dow rose by 0.10%. The Nasdaq Composite Index and S&P 500 saw losses of 0.54% and 0.19%, respectively.

While the US equity market session will set the tone for Thursday, Bank of Japan commentary will need consideration. Reaction to updates on wage negotiations and the timeline for a Bank of Japan pivot from negative rates will influence the Nikkei.

Investors must also monitor stimulus chatter from Beijing. Efforts to bolster the economy could drive buyer demand for ASX 200 and Hang Seng-listed stocks.

On Thursday, the ASX 200 futures were up 22 points, while the Nikkei futures were down by 40 points.

ASX 200

ASX200 140324 Daily Chart

The ASX 200 gained 0.22% on Wednesday. Tech, retail, and bank stocks contributed to the gains. The S&P ASX All Technology Index (XTX) advanced by 0.55%.

ANZ Group Holdings Ltd (ANZ) and Westpac Banking Corp. (WBC) rallied 1.71% and 1.81%, respectively. National Australia Bank Ltd. (NAB) gained 1.68%, while the Commonwealth Bank of Australia (CBA) declined by 0.16%.

Gold (XAU/USD) stocks capped the upside for the ASX 200. Northern Star Resources Ltd. (NST) and Evolution Mining Ltd. slid by 2.34% and 2.45%, respectively.

However, mining and oil stocks had a mixed session.

Fortescue Metals Group Ltd. (FMG) and BHP Group Ltd (BHP) declined by 1.01% and 1.34%, respectively. Rio Tinto Ltd. (RIO) gained 1.39%.

Woodside Energy Group Ltd (WDS) fell by 0.72%, while Santos Ltd (STO) ended the day up 0.56%.

Hang Seng Index

HSI 140324 Daily Chart

On Wednesday, the Hang Seng Index slipped by 0.07%. Real estate stocks contributed to the losses. The Hang Seng Mainland Properties Index (HSMPI) declined by 1.11%. However, tech stocks limited the downside. The Hang Seng Tech Index (HSTECH) gained 0.34%.

Alibaba (9988) and Tencent (0700) saw losses of 1.14% and 0.07%, respectively.

Bank stocks had a mixed session. HSBC (0005) rose by 0.94%. China Construction Bank (0939) and Industrial Commercial Bank (1398) declined by 1.01% and 1.70%, respectively.

The Nikkei 225

Nikkei 140324 Daily Chart

(Graph for reference purposes only)

The Nikkei fell by 0.26% on Wednesday.

Bank stocks had a mixed session. Sumitomo Mitsui Financial Group Inc. (8316) rose by 0.56%, while Mitsubishi UFJ Financial Group Inc. (8306) fell by 0.26%.

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

Tokyo Electron Ltd. (8035) rallied 2.41%, with Sony Group Corporation (6758) gaining 0.54%.

KDDI Corp. (9433) slid by 1.40%. Softbank Group Corp. (9948) and Fast Retailing Co. Ltd. (9983) declined by 0.19% and 0.69%, respectively.

For upcoming economic events, refer to our economic calendar.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.