Hang Seng Index, Nikkei Index, ASX 200: The Hang Seng and the Launch Toward 20,000

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Updated: May 26, 2024, 13:25 GMT+00:00

Key Points:

The Hang Seng Index extended its winning streak to three sessions as the broader Asian markets responded to policy measures from Beijing.
FOMC member commentary and US equity market trends from Monday will set the tone for the Tuesday session (May 21).
The RBA Meeting Minutes, Aussie Consumer Confidence, and Bank of Japan chatter also need consideration.

US Equity Markets: Fed Speakers and Rate Cut Hopes

On Monday (May 20), FOMC member chatter drew investor attention. FOMC members Michael Barr, Mary Daly, Philip Jefferson, and Raphael Bostic were on the calendar to speak.

Philip Jefferson: Too early to conclude if the recent cooldown in inflationary pressures would continue.
Michael Barr: Concerned that the first-quarter inflation numbers did not provide enough confidence to support an interest rate cut.
Mary Daly: Talked down the need for a rate hike but was also unsupportive of a rate cut.
Raphael Bostic: Reiterated the need for more confidence in inflation trends, as mentioned in a recent speech.

There were no US stats for investors to consider, leaving investor sentiment toward the Fed rate path to influence market risk appetite.

On Monday, the Dow declined by 0.49%. The Nasdaq Composite Index and S&P 500 advanced by 0.65% and 0.09%, respectively.

The US equity market trends from Monday (May 20) could set the tone for the Tuesday (May 21) Asian session.

Asian Economic Calendar: The RBA, Aussie Consumer Confidence, and the BoJ

On Tuesday (May 21), Australian consumer confidence figures warrant investor attention. Economists forecast the Westpac Consumer Confidence Index to increase by 0.9% to 83.1 in May. A pickup in consumer confidence could signal an upward trend in household spending. Lackluster household spending has impacted the Australian retail sector.

However, the RBA Meeting Minutes will also need consideration. Further clues on RBA requirements for a monetary policy move could move the dial. Recent wage growth and unemployment figures from Australia reduced investor bets on an RBA rate hike, driving buyer demand for ASX 200-listed stocks.

Beyond the economic calendar, investors should monitor Bank of Japan commentary. Discussions about a June interest rate hike could influence the USD/JPY and buyer appetite for Nikkei-Index listed stocks. Rate hike discussions could stoke buyer demand for the Japanese Yen. A stronger Yen would affect buyer appetite for Nikkei Index-listed export stocks.

Commodities: Crude Oil, Gold, and Iron Ore

On Monday (May 20), gold spot (XAU/USD) gained 0.42% to close the session at $2,425.31. WTI crude oil declined by 0.32%, ending the day at $79.80.

On the Singapore Futures Exchange, iron ore prices were up 0.74% on Tuesday (May 21). Iron ore spot rallied 1.39% on Monday (May 20).

The USD/JPY and the Nikkei

The USD/JPY rose by 0.30% on Monday (May 20), ending the session at 156.246. A stronger USD/JPY may support buyer appetite for Nikkei Index-listed export stocks. Nevertheless, investors should consider upward USD/JPY price trends and intervention risk.

The Futures Markets

On Tuesday (May 21), the ASX 200 was down 9 points, while the Nikkei Index advanced by 150 points.

ASX 200

ASX200 210524 Daily Chart

The ASX 200 advanced by 0.63% on Monday (May 20). Bank, gold, mining oil, and Tech stocks contributed to the ASX 200 gains. The S&P/ASX All Tech Index rose by 0.37%.

Gold-related stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) saw gains of 2.86% and 5.18%, respectively.

BHP Group Ltd (BHP) and Rio Tinto Group Ltd. (RIO) ended the session up 1.85% and 1.81%, respectively. Fortescue Metals Group Ltd. (FMG) increased by 1.11%.

Oil stocks Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) advanced by 2.07% and 2.12%, respectively.

Commonwealth Bank of Australia (CBA) rose by 0.60%, with Westpac Banking Corp. (WBC) gaining 0.75%. ANZ Group Holdings Ltd. (ANZ) and National Australia Bank Ltd. (NAB) advanced by 0.18% and 0.58%, respectively.

Hang Seng Index

HSI 210524 Daily Chart

The Hang Seng Index advanced by 0.42% on Monday (May 20). Tech and real estate stocks had mixed sessions. The Hang Seng Mainland Properties Index (HSMPI) declined by 0.71%, while the Hang Seng Tech Index (HSTECH) rose by 0.55%.

Baidu (9888) slid by 3.16%, with Alibaba (9988) declining by 0.41%. Tencent Holdings (0700) ended the session flat.

However, bank stocks had a positive session. HSBC (0005) rose by 0.44%. China Construction Bank (0939) and Industrial Commercial Bank (1398) saw gains of 0.85% and 0.42%, respectively.

The Nikkei Index

Nikkei Index ended Monday in positive territory.

Nikkei 210524 Daily Chart

(Graph for reference purposes only)

The Nikkei Index rose by 0.73% on Monday (May 20).

Bank stocks had another positive session. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) advanced by 1.50% and 0.61%, respectively.

However, it was a mixed session for the main components of the Nikkei Index.

Fast Retailing Co. Ltd. (9983) ended the session up 0.85%, with KDDI Corp. (9433) rising by 1.08%. Tokyo Electron Ltd. (8035) increased by 0.69%.

However, Softbank Group Corp. (9984) and Sony Group Corporation (6758) bucked the trend, falling by 2.78% and 0.27%, 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.