Hang Seng Index, Nikkei Index, ASX 200: Geopolitical Risks and US Jobs Report Impact

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Updated: Apr 8, 2024, 04:51 UTC

Key Points:

The Asian equity markets ended the Friday session in negative territory, tracking US equity market losses from Thursday.
On Monday, the US Jobs Report and US equity market gains from Friday will set the tone for the session.
Investors should also consider the Asian economic calendar and geopolitical tensions in the Middle East.

US Equity Markets: US Jobs Report and Equity Market Gains

On Monday, the hotter-than-expected US Jobs Report and US equity market reaction warrant investor attention.

Nonfarm payrolls surged 303,000, beating expectations of a 200,000 increase. The US unemployment rate unexpectedly fell from 3.9% to 3.8% in March. However, wage growth softened despite the jump in nonfarm payrolls. Average hourly earnings increased 4.1% year-on-year in March compared with 4.3% in February.

Rising market expectations of the US avoiding a recession fueled a positive response to the US Jobs Report.

On Friday, the Dow and the S&P 500 advanced by 0.80% and 1.11%, respectively. The Nasdaq Composite Index rallied 1.24%.

Asian Economic Calendar: Aussie Home Loans, Japan Wages, and the Bank of Japan

On Monday, investors should consider economic indicators from Australia and Japan.

The Australian housing sector will be in focus. Home loan numbers for February will draw investor interest. A rebound in home loans could signal an improving macroeconomic environment. Economists forecast home loans to increase by 2.25% after falling by 4.60% in January.

After better-than-expected household spending numbers, wage growth numbers from Japan could impact the Nikkei.

Economists forecast average cash earnings to rise by 1.4% year-on-year in February. Average cash earnings rose by 2.0% year-on-year in January. However, weaker-than-expected numbers may have a limited impact on the USD/JPY and the Nikkei. March wage hikes signaled a positive demand outlook.

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

Commodity price movements from Friday could influence market risk sentiment and buyer demand for ASX 200-listed stocks.

Crude oil and gold prices were higher on Friday. Rising tensions in the Middle East fueled concerns about supply. The increasing geopolitical risks also drove buyer demand for gold. Iron ore prices also trended higher on Friday.

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

The USD/JPY hovered within the intervention zone at 151.710 on Monday. The markets expect 152 to be the breaking point for the Japanese government. Intervention threats could impact the USD/JPY and Nikkei-listed export stocks.

The Futures Markets

On Monday, the ASX 200 and the Nikkei were up 38 and 320 points, respectively.

ASX 200

ASX200 080424 Daily Chart

The ASX 200 declined by 0.56 on Friday, tracking the Thursday losses across the US equity markets. Bank, mining, and tech stocks contributed to the losses. The S&P ASX All Technology Index (XTX) slid by 1.37%. Gold (XAU/USD) and oil limited the downside.

ANZ Group Holdings Ltd. (ANZ) and Westpac Banking Corp. (WBC) saw losses of 0.07% and 0.04%, respectively. Commonwealth Bank of Australia (CBA) and National Australia Bank Ltd. (NAB) declined by 0.26% and 0.17%, respectively.

Rio Tinto Ltd. (RIO) and BHP Group Ltd (BHP) ended the session down 1.03% and 0.89%, respectively. Fortescue Metals Group Ltd. (FMG) declined by 0.68%.

Gold stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) advanced by 0.54% and 2.36%, respectively. Rising gold prices contributed to the gains.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) benefitted from supply concerns, gaining 0.20% and 0.63%, respectively.

Hang Seng Index

HSI 080424 Daily Chart

On Friday, the Hang Seng Index slipped by 0.01%. Property and tech stocks contributed to the losses. The Hang Seng Tech Index (HSTECH) and Hang Seng Mainland Properties Index (HSMPI) fell by 0.29% and 1.06%, respectively.

Tencent (0700) gained 0.52%, while Alibaba (9988) declined by 0.43%.

Bank stocks also had a mixed session. HSBC (0005) rallied 2.20%. China Construction Bank (0939) and Industrial Commercial Bank (1398) fell by 0.21% and 1.00%, respectively.

The Nikkei 225

Nikkei 080424 Daily Chart

(Graph for reference purposes only)

The Nikkei slid by 1.96%. USD/JPY losses during the Asian session impacted Nikkei-listed export stocks.

Bank stocks saw more losses. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) declined by 1.19% and 1.52%, respectively.

It was a negative session for the main components of the Nikkei.

Tokyo Electron Ltd. (8035) tumbled 5.60%.

Fast Retailing Co. Ltd. (9983) and Softbank Group Corp. (9948) ended the session down 2.26% and 2.77%, respectively.

KDDI Corp. (9433) and Sony Group Corporation (6758) fell by 0.38% and 1.88%, 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.