Hang Seng Index, ASX 200, Nikkei 225: Alibaba, the Hang Seng, and 20,000

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Updated: May 26, 2024, 13:27 GMT+00:00

Key Points:

On Monday (May 13), the Hang Seng Index extended its winning streak to three sessions, while the Nikkei ended the session in negative territory.
On Tuesday (May 14), overnight US consumer inflation expectation numbers and US equity market session will set the tone for the session.
Economic indicators from Japan and corporate earnings will also need consideration.

US Equity Markets: Consumer Inflation Expectations and Fed Speakers

On Monday (May 13), US consumer inflation expectation numbers attracted investor attention, rising from 3.0% to 3.3% in April. Economists forecast an increase of 3.1%.

The upswing in consumer inflation expectations preceded US producer prices and the CPI Report on Tuesday and Wednesday. Investor apprehension before the respective reports impacted buyer demand for riskier assets.

On Monday, the Nasdaq Composite Index gained 0.29%. However, the Dow and S&P 500 saw losses of 0.21% and 0.02%, respectively.

The consumer inflation expectation figures and the US equity market session will set the tone for the Tuesday (May 14) Asian session.

Asian Economic Calendar: The Aussie Budget, Japanese Producer Prices and Earnings

On Tuesday (May 14), producer price trends from Japan could influence buyer demand for the Yen, the BoJ rate path, and the Nikkei Index.

Economists forecast producer prices to increase 0.9% year-on-year in April after rising 0.8% in March. Upward trends in producer prices signal an improving demand environment, with producers passing costs onto consumers.

A pickup in private consumption could enable the BoJ to begin discussions about interest rate hikes. Significantly, a stronger Yen could impact buyer appetite for Nikkei Index-listed export stocks.

Sentiment toward the Australian budget will likely impact buyer demand for retail and rate-sensitive ASX 200-listed stocks. A budget that could fuel consumer spending may force the RBA to leave interest rates higher for longer. Nonetheless, higher spending power would support the beleaguered retail sector.

Furthermore, investors should monitor corporate earnings results. Tencent Holdings (HK: 0700) and Alibaba (HK: 9988) are marquee Hang Seng Index-listed names releasing earnings results. SMC Corp (6273), Asahi Group Holdings (2502), and Isuzu Motors (7202) earnings will put the Nikkei Index in focus.

Commodities: Crude Oil, Gold, and Iron Ore

On Monday (May 13), gold spot (XAU/USD) slid by 1.02% to close the session at $2,336.05. WTI crude oil advanced by 1.10%, ending the Friday session at $79.12.

On the Singapore Futures Exchange, iron ore prices were down 0.08% on Tuesday (May 14). Iron ore spot rallied by 1.65% on Monday (May 13).

The USD/JPY and the Nikkei

The USD/JPY advanced by 0.29% on Monday (May 13), ending the session at 156.201. A stronger USD/JPY may support buyer demand for Nikkei Index-listed export stocks. However, Japanese government intervention threats and BoJ chatter about hiking interest rates could temper buyer appetite.

The Futures Markets

On Tuesday (May 14), the ASX 200 was down 8 points, while the Nikkei Index was up by 70 points.

ASX 200

ASX200 140524 Daily Chart

The ASX 200 advanced by 0.01% on Monday (May 13). Oil and tech stocks had a negative start to the week, with the S&P/ASX All Tech Index declining by 0.57%. However, it was a mixed Monday session for bank, gold, and mining stocks.

Oil stocks Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) saw losses of 1.05% and 0.89%, respectively. A pullback in oil prices on Friday pressured oil stocks.

Commonwealth Bank of Australia (CBA) rallied 1.34%. National Australia Bank Ltd. (NAB) rose by 0.68%, with Westpac Banking Corp. (WBC) gaining 0.08%. ANZ Group Holdings Ltd. (ANZ) bucked the trend, falling by 0.18%.

Iron ore price losses from Friday impacted mining stocks. Fortescue Metals Group Ltd. (FMG) and Rio Tinto Group Ltd. (RIO) declined by 0.61% and 0.75%, respectively. BHP Group Ltd (BHP) bucked the trend, rising by 0.79%.

Gold-related stocks Northern Star Resources Ltd. (NST) advanced by 0.55%, while Evolution Mining Ltd (EVN) ended the Monday session flat.

Hang Seng Index

HSI 140524 Daily Chart

The Hang Seng Index gained 0.80% on Monday (May 13). Tech stocks contributed to the gains, with the Hang Seng Tech Index (HSTECH) rallying 1.42%. However, real estate stocks eased back after a breakout Friday session. The Hang Seng Mainland Properties Index (HSMPI) declined by 0.26%.

Alibaba (9988) jumped 4.11%, with Tencent Holdings (0700) rising by 1.94%.

However, bank stocks had a mixed session. HSBC (0005) and Industrial Commercial Bank (1398) saw gains of 0.15% and 0.22%, respectively. China Construction Bank (0939) ended the session down 0.18%.

The Nikkei Index

Nikkei ended Monday in negative territory.

Nikkei 140524 Daily Chart

(Graph for reference purposes only)

The Nikkei Index declined by 0.13% on Monday (May 13).

Bank stocks continued trending higher. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) saw gains of 1.16% and 0.47%, respectively.

However, it was a mixed start to the week for the main components of the Nikkei Index.

Softbank Group Corp. (9984) and Sony Group Corporation (6758) rallied 1.56% and 1.72%, respectively. KDDI Corp. (9433) surged 3.69%. A return to profit drove buyer demand for Softbank shares.

However, Fast Retailing Co. Ltd. (9983) and Tokyo Electron Ltd. (8035) declined by 0.20% and 1.03%, 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.