Hang Seng Index, Nikkei Index, ASX 200: Futures Flash Red Pre China Services PMI

By:

Updated: Apr 2, 2024, 22:43 UTC

Key Points:

On Tuesday, the Hang Seng Index had its best session since March 12, rallying 2.36% as investors reacted to the PMI numbers from China.
On Wednesday, overnight labor market data will set the mood for the session amid falling bets on a June Fed rate cut.
Investors must also consider service sector PMI numbers from Australia, Japan, China, and USD/JPY trends.

US Equity Markets: US Factory Orders and Job Openings

On Wednesday, overnight US economic indicators warrant investor attention amidst increasing uncertainty about a June Fed rate cut.

JOLTs job openings remained steady at 8.75 million in February after a downward revision to the January reading of 8.86 million. Economists forecast JOLTs job openings of 8.75 million. Importantly, the quit rate rose, signaling workforce confidence in labor market conditions. JOLTs job quits rose from 3.446 million to 3.484 million.

Factory orders beat expectations, rising by 1.4% in February after sliding by 3.8% in January.

10-year US Treasury yields ended the Tuesday session up 0.93% to 4.353%, down from a session high of 4.405%.

On Tuesday, the Nasdaq Composite Index and the S&P 500 declined by 0.95% and 0.72%, respectively. The Dow slid by 1.00%.

Asia Economic Calendar: Service Sector PMIs in the Spotlight

On Wednesday, the Asian economic calendar will also warrant investor attention. Numbers from China could drive demand for riskier assets after better-than-expected manufacturing data.

Economists forecast the Caixin Services PMI to increase from 52.5 to 52.7 in March. The figures will likely influence buyer demand for ASX 200 and Hang Seng Index-listed stocks.

Service PMI numbers from Japan may influence the Bank of Japan rate path. The BoJ is eyeing the services sector to fuel demand-driven inflation. Economists expect the Jibun Bank Services PMI to rise from 52.9 to 54.9 in March.

Commodities: Crude Oil, Gold, and Iron Ore Price Trends

Commodity price trends can impact market risk sentiment and the ASX 200. Crude oil and gold prices were higher on Tuesday. SGX TSI Iron ore prices also trended higher.

The USD/JPY, the Intervention Zone, and the Nikkei

The Nikkei remains in the hands of the USD/JPY and the Japanese government. Falling bets on a June Fed rate cut could drive buyer demand for the US dollar. An accommodative Bank of Japan would leave the Japanese government to counter a USD/JPY break above the 152 barrier.

The Futures Markets

On Wednesday, the ASX 200 and the Nikkei were down 30 and 230 points, respectively.

ASX 200

ASX200 030424 Daily Chart

The ASX 200 declined by 0.11% on Tuesday. Tech stocks pressured the ASX 200 on fading expectations of a June Fed rate cut. The S&P ASX All Technology Index (XTX) ended the session down 0.52%. Bank and mining stocks had mixed sessions. However, gold (XAU/USD) and oil limited the losses.

Gold (XAU/USD) stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) surged by 2.56% and 5.87%, respectively.

Woodside Energy Group Ltd (WDS) ended the session flat, while Santos Ltd (STO) advanced by 1.16%.

BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) ended the day up 1.94% and 0.68%, respectively. Iron ore prices advanced on the Singapore futures exchange, supporting the Tuesday session gains. However, Fortescue Metals Group Ltd. (FMG) bucked the trend, falling 1.09%.

National Australia Bank Ltd. (NAB)and Westpac Banking Corp. (WBC) rose by 0.52% and 0.04%, respectively. ANZ Group Holdings Ltd. (ANZ) and Commonwealth Bank of Australia (CBA) saw losses of 0.03% and 0.22%, respectively.

Hang Seng Index

HSI 030424 Daily Chart

On Tuesday, the Hang Seng Index rallied 2.36%. Real estate and tech ended the session in positive territory. The Hang Seng Tech Index (HSTECH) and Hang Seng Mainland Properties Index (HSMPI) saw gains of 1.89% and 1.90%, respectively. Investors responded to the better-than-expected private sector PMIs from China.

Tencent (0700) and Alibaba (9988) advanced by 1.78% and 1.07%, respectively.

Bank stocks had a positive start to the second quarter. HSBC (0005) rose by 1.23%. China Construction Bank (0939) and Industrial Commercial Bank (1398) rallied 2.75% and 2.28%, respectively.

The Nikkei 225

Nikkei eked out a modest gain on Tuesday.

Nikkei 030424 Daily Chart

(Graph for reference purposes only)

The Nikkei gained 0.09% on Tuesday. A steadier USD/JPY offered market comfort despite hovering within the intervention zone. Semiconductors tracked their Nasdaq-listed counterparts into positive territory, delivering the gains for the Nikkei.

Bank stocks saw more losses after the Monday sell-off. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) declined by 0.12% and 0.03%, respectively.

It was another mixed session for the main components of the Nikkei.

Tokyo Electron Ltd. (8035) rallied 3.42%, with Fast Retailing Co. Ltd. (9983) advancing by 0.13%.

However, Softbank Group Corp. (9948) and Sony Group Corporation (6758) fell by 0.39% and 0.27%, respectively. KDDI Corp. (9433) ended the session down 0.04%.

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.