Hang Seng Index, Nikkei Index, ASX 200: Inflation, Interventions, and the Chinese Yuan

The Fed, US Consumer Confidence, and US Market Caution

The US equity markets could set the tone for another cautious Asian market session on Wednesday. On Tuesday, the Nasdaq Composite Index fell by 0.42%. The Dow and the S&P 500 ended the session down 0.08% and 0.28%, respectively.

Mixed signals from Fed officials regarding the interest rate trajectory could continue to impact market sentiment. Weaker-than-expected US consumer sentiment numbers also dampened buyer demand for riskier assets. The US CB Consumer Confidence Index signaled a weaker consumption outlook.

The Core PCE Price Index and the US Jobs Report may change the narrative regarding Fed policy uncertainty.

Asian Economic Calendar: Aussie Inflation Puts the RBA in the Spotlight

On the Asian economic calendar, Australian inflation numbers for March could impact rate-sensitive ASX 200-listed stocks. Hotter-than-expected numbers may reignite speculation about an RBA rate hike. Economists forecast the CPI Monthly Indicator to increase from 3.4% to 3.5%.

Overnight crude oil, gold, and iron ore price movements also need consideration. Oil prices retreated, while gold prices ended the session higher. Concerns about demand from China could leave iron ore prices and mining stocks under pressure.

Currency Volatility Adds Pressure to Asian Equity Markets

Investors remained edgy about the increasing threat of an intervention to bolster the Japanese Yen. The USD/JPY gained 0.10% on Tuesday, ending the session at 151.558. Significantly, the USD/JPY has trended sideways in recent sessions. A move to 152 could force the Japanese government into action. An intervention may pressure Nikkei-listed export stocks.

While the Japanese government attempts to limit the downside for the Yen, the PBoC also warrants intervention attention. USD/CNY price swings on Friday (March 22) and Monday (March 25) have unsettled the markets.

Corporate Earnings Put the Hang Seng Index in Focus

It is earnings season for the Hang Seng Index, with many firms releasing earnings on Wednesday. Industrial Commercial Bank (1398), Bank of Communications (3328), and China Life Insurance (2628) are among the big names on the Hang Seng earnings calendar.

ASX 200

The ASX 200 declined by 0.41% on Tuesday. Mining, bank, and tech stocks pressured the ASX 200. The S&P ASX All Technology Index (XTX) slid by 1.14%. However, gold (XAU/USD) and oil stocks limited the ASX 200 losses.

Rio Tinto Ltd. (RIO) and BHP Group Ltd (BHP) saw losses of 0.17% and 0.59%, respectively. Fortescue Metals Group Ltd. (FMG) declined by 1.18%. Iron ore futures impacted mining stocks.

Bank stocks ANZ Group Holdings Ltd. (ANZ) and Westpac Banking Corp. (WBC) fell by 0.31% and 0.76%, respectively. Commonwealth Bank of Australia (CBA) and National Australia Bank Ltd. (NAB) saw losses of 0.16% and 0.29%, respectively. However,

Gold (XAU/USD) stock Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) saw gains of 1.60% and 0.57%, respectively.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) advanced by 0.96% and 0.40%, respectively.

Gold and oil stocks benefitted from Monday’s price gains in gold spot and WTI.

Hang Seng Index

On Tuesday, the Hang Seng Index advanced by 0.88%. Real estate and tech sectors contributed to the gains. The Hang Seng Mainland Properties Index (HSMPI) and Hang Seng Tech Index (HSTECH) ended the day up 0.65% and 1.00%, respectively.

Tencent (0700) rallied by 3.74%, while Alibaba (9988) ended the session flat.

Bank stocks had a positive Monday session. HSBC (0005) rose by 0.90%. China Construction Bank (0939) and Industrial Commercial Bank (1398) saw gains of 1.67% and 1.27%, respectively.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei slipped by 0.04% on Tuesday.

Bank stocks extended losses from Monday. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) fell by 0.27% and 0.95%, respectively.

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

Sony Group Corporation (6758) and KDDI Corp. (9433) saw gains of 0.46% and 0.73%, respectively. Tokyo Electron Ltd. (8035) gained 0.54%.

Softbank Group Corp. (9948) and Fast Retailing Co. Ltd. (9983) saw losses of 1.18% and 1.63%, respectively.

For upcoming economic events, refer to our economic calendar.