Hang Seng Index, Nikkei Index, ASX 200: Aussie Inflation, China, and Earnings

Overview of the Tuesday Session

The Hang Seng Index enjoyed a more upbeat afternoon session to lead the ASX 200 and Nikkei into positive territory.

Overnight US economic indicators from Monday set the tone for the Tuesday Asian session.

Better-than-expected new home sales and the Dallas Fed Manufacturing Index reflected a robust US economy. New home sales increased by 1.5% in January after surging by 7.2% in December. The Dallas Fed Manufacturing Index increased from -27.4 to -11.3 in February. Upbeat stats tested bets on an H1 2024 Fed rate cut before US inflation numbers on Thursday.

On Monday, the Dow fell by 0.16%. The Nasdaq Composite index and S&P 500 declined by 0.13% and 0.38%, respectively.

The US economic data and pullback across the US equity markets set the tone for the Tuesday session. However, inflation numbers from Japan pressured the Nikkei, with the lack of stimulus chatter impacting the ASX 200. The Hang Seng received a boost on hopes of the administration rolling out a budget targeting growth.

US Stats, Aussie Inflation, and Earnings in Focus

On Wednesday, overnight US economic indicators from Tuesday will influence market risk sentiment. US consumer confidence and core durable goods orders supported an H1 2024 Fed rate cut.

The CB Consumer Confidence Index declined from 110.9 to 106.7 in February. Economists forecast an increase to 115.0. Durable goods orders ex-transport fell by 0.3% in January after declining by 0.1% in December. Economists expected orders ex-transport to increase by 0.2%.

On Tuesday, the Dow fell by 0.25%. The Nasdaq Composite Index and S&P 500 ended the session up 0.37% and 0.17%, respectively.

The US market session will set the tone for the Wednesday Asian session. However, the Asian economic and earnings calendars also warrant investor attention.

Australian inflation numbers for January could raise bets on an RBA rate hike and impact the appetite for ASX-listed stocks. Economists forecast the annual inflation rate to rise from 3.4% to 3.5% in January. However, investors must also monitor stimulus chatter from Beijing, a Bank of Japan reaction to the inflation numbers, and corporate earnings.

Baidu (HK: 9888), Galaxy Entertainment (HK: 0027), Weibo (HK: 9898), Sincere (HK: 2096), and Xero (ASX: XRO) are among the big names to release earnings.

On Wednesday, the ASX 200 and the Nikkei futures were up 21 and 10 points, respectively.

ASX 200

The ASX 200 ended the Tuesday session up 0.13%. Bank and tech stocks contributed to the gains. The S&P ASX All Technology Index (XTX) rose by 0.43%.

The big four banks had a positive Tuesday session. The Commonwealth Bank of Australia (CBA) and Westpac Banking Corp. (WBC) gained 1.04% and 0.81%, respectively. ANZ Group Holdings Ltd (ANZ) and National Australia Bank Ltd. (NAB) rose by 0.49% and 0.53%, respectively.

Oil and mining stocks had a mixed Tuesday session.

BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) saw gains of 0.16% and 0.45%, respectively. Fortescue Metals Group Ltd. (FMG) declined by 1.18%.

Woodside Energy Group Ltd (WDS) rose by 0.93%, while Santos Ltd (STO) declined by 0.57%. Woodside Energy Group made gains despite weaker-than-expected FY 2023 earnings.

However, gold (XAU/USD) stocks limited the upside for the ASX 200. Northern Star Resources Ltd. (NST) and Evolution Mining Ltd. ended the session down 0.93% and 2.03%, respectively.

Hang Seng Index

On Tuesday, the Hang Seng Index ended the session up 0.94%. Tech stocks contributed to the gains on hopes of fiscal stimulus to boost growth. The Hang Seng Tech Index (HSTECH) rebounded from early losses to end the session up 3.24%. However, the Hang Seng Mainland Properties Index (HSMPI) declined by 0.15%.

Alibaba (9988) rallied by 1.82%, while Tencent (0700) declined by 0.91%.

Bank stocks also had a mixed session. HSBC (0005) fell by 0.08%. China Construction Bank (0939) and Industrial Commercial Bank (1398) gained 1.02% and 0.49%, respectively.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei ended Tuesday up 0.01%. Inflation numbers from Japan raised bets on an April BoJ pivot. The Nikkei gave up gains from early in the session.

Bank stocks had a positive Tuesday session. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) ended the session up 2.54% and 1.42%, respectively.

However, the main components of the Nikkei had another mixed session.

Sony Group Corp. (6758) fell by 0.81%, with Fast Retailing Co. Ltd. and KDDI Corp. (9433) declining by 0.30% and 0.29%, respectively.

However, Tokyo Electron Ltd. (8035) gained 0.72%, with Softbank Group Corp. (9948) rallying 2.44%. Arm Holdings (ARM) gains from overnight drove buyer demand for Softbank shares as investors reacted to ARM moves in the AI space.

For upcoming economic events, refer to our economic calendar.