Hang Seng Hang Seng Index: Trump Jitters Weigh – Asian Market Weekly Recap

US Equity Markets: Nasdaq Ends Seven-Week Winning Streak

US equity markets saw notable losses for the week ending November 1. The Nasdaq Composite Index ended its seven-week winning streak, declining by 1.50%. The Dow and the S&P 500 extended losses from the previous week, falling 0.15% and 1.37%, respectively.

Disappointing earnings outlooks from Microsoft (MSFT), Meta Platforms (META), and a 44.89% plunge in Super Micro Computer’s (SMCI) stock price contributed to the losses.

US Personal Income and Outlays and the Jobs Report

However, rising bets on a December Fed rate hike limited the US market losses. Friday’s US Jobs Report countered the Personal Income and Outlays Report that signaled sticky inflation. Nonfarm payrolls increased by just 12k in October, down from 223k in September, while the unemployment rate remained at 4.1%.

According to the CME FedWatch Tool, the probability of a 25-basis point December Fed rate cut jumped from 74.6% on October 25 to 84.1% on November 1. Friday’s US Jobs Report could set the tone for a positive Monday Asian session. Thursday’s Personal Income and Outlays Report had reduced expectations for a December Fed rate cut, impacting demand for Asian stocks on Friday.

China Private Sector PMIs Reflect Effective Policy Measures

China’s NBS and Caixin Manufacturing sector PMIs fueled optimism about a possible pickup in economic activity.

The all-important Caixin Manufacturing PMI increased from 49.3 in September to 50.3 in October, returning to expansion. The NBS Manufacturing PMI also signaled a return to expansion, rising from 49.8 in September to 50.1 in October. The PMIs suggested that recent policy measures were starting to stabilize China’s economy.

Expert Views on China’s Economy and Stimulus

Dr. Wang Zhe, Senior Economist at Caixin Insight Group, commented on the October Survey, stating,

“In late September, China’s Politburo noted emerging challenges in the economy and emphasized the need to focus on key areas and introduce new policies. Following this, a series of new policies were rolled out. Data from the Caixin manufacturing PMI survey show that market demand stabilized and optimism improved, suggesting early signs of policy impact.”

Hang Seng Index and Mainland China Markets Fall on Trump Jitters

The Hang Seng Index extended its losing streak to four weeks, falling 0.41%. Increasing chances of a Trump victory on November 5 and a tech sector rout left the Hang Seng in negative territory.

The US election polls showed Trump narrowed the gap with Kamala Harris, raising the chances of Trump returning to the White House. Markets expect Trump to target Chinese goods with punitive tariffs, potentially impacting it’s economy.

The tech sector struggled alongside the Nasdaq, with the Hang Seng Tech Index (HSTECH) ending the week down 1.19%. Tech giants Alibaba (9988) and Tencent (0700) declined by 0.37% and 0.36%, respectively, while Baidu (9888) advanced by 1.49%.

Meanwhile, real estate stocks advanced on sentiment toward China’s policy measures. The Hang Seng Mainland Properties Index (HMPI) rallied 4.80%.

On the Mainland, fears of US tariffs overshadowed the PMI numbers and expectations for further policy announcements. The CSI 300 declined by 1.68%, while the Shanghai Composite fell by 0.84%.

Commodity Markets: Crude Oil, Iron Ore, and Gold

Commodity markets had a mixed week. Iron ore spot slid by 2.72% in the week. Gold also trended lower, slipping 0.41% despite reaching an all-time high of $2,790.

However, WTI Crude ended the week higher as investors considered the Middle East conflict.

ASX 200 Extends Losses from the Previous Week

The ASX 200 declined by 1.13% in the week ending November 1, following a 0.87% loss from the previous week. Falling gold prices and reduced bets on a December Fed rate (before the US Jobs Report) impacted demand for ASX 200-listed stocks.

Demand for high-yielding Aussie banking stocks dampened as US Treasury yields climbed higher. National Australia Bank (NAB) and ANZ (ANZ) ended the week down by 1.90% and 2.02%, respectively.

Gold-related stock Northern Star Resources Ltd. (NST) slid by 3.88% on the pullback in gold prices.

Nikkei Index Advances on Political Impasse

In the week ending November 1, the Nikkei Index gained 0.37%. Japan’s general election result impacted demand for the Japanese Yen, boosting Nikkei Index-listed stocks. The Liberal Democratic Party (LDP) – Komeito coalition fell short of a majority, raising doubt about near-term Bank of Japan rate hikes.

Despite the election result’s impact on the Yen, a hawkish Bank of Japan stance supported Yen demand, resulting in the Nikkei’s modest gain. The USD/JPY advanced by 0.45% in the week.

Notable stock movers included SoftBank Group Corp. (9984), which advanced by 2.43% despite a 5.62% slide on Friday. Nissan Motor Corp. (7201) gained 1.59%. However, Tokyo Electron (8035) declined by 3.17%.

Outlook

Looking forward, key events, including the RBA interest rate decision, the US Presidential Election, and the upcoming National People’s Congress Standing Committee (NPCSC) meeting, will influence market risk sentiment.

Further stimulus measures from Beijing may fuel demand for riskier assets. However, hawkish central bank stances and a Trump victory could overshadow policy measures from Beijing.

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