Hang Seng Index, ASX 200, Nikkei 225: Futures Flash Red after Overnight US Losses

Key Insights:

• On Thursday, the Nikkei led the Hang Seng Index and the ASX 200 into negative territory.
• US economic indicators and corporate earnings results from Thursday suggest a choppy Friday session.
• On Friday, Chinese industrial profit and inflation numbers from Australia and Japan will be in focus.

Overview of the Thursday Session

On Thursday, the Nikkei led the Hang Seng Index and ASX 200 into negative territory.

US corporate earnings and 10-year US Treasury yields negatively impacted the Thursday session. Alphabet (GOOGL) earnings disappointed, resonating during the Wednesday US session. On Wednesday, the US equity markets reacted to the Alphabet results, with the Nasdaq Composite Index sliding by 2.43%. The Dow and the S&P 500 saw losses of 0.32% and 1.43%.

10-year US Treasury yields surged by 2.74%, ending the Wednesday session at 4.957%. Rising yields added to the risk-off mood through the Thursday Asian session.

On Thursday, there were no economic indicators from the Asian region to influence market risk sentiment. The lack of stats left US corporate earnings and US equity market moves from Wednesday to impact risk appetite.

US GDP Numbers Test Fed Rate Hike Bets

US economic indicators from Thursday and US corporate earnings will influence the Friday Asian market session. The US economy had a breakout in Q3. However, the GDP report highlighted weaker-than-expected disposable income and inflation. The numbers suggested the Fed may be near the end of its monetary policy tightening cycle.

10-year US Treasury yields tumbled by 2.14% to end the Thursday session at 4.851%. Yields slumped in response to the GDP report.

However, the US equity markets ended the Thursday session in negative territory. The resilience of the US economy could allow the Fed to keep interest rates higher for longer. US corporate earnings also impacted risk sentiment.

Meta Platforms (META) beat earnings estimates but forecast a weaker outlook. META ended the Thursday session down 3.73%. However, Amazon.com (AMZN) beat revenue forecasts, gaining 0.72% during after-hours trading.

On Thursday, the US equity markets reacted to the US GDP Report and corporate earnings. The Nasdaq Composite Index fell by 1.76%, with the Dow and S&P 500 declining by 0.76% and 1.17%.

The US session will influence the Asian markets on Friday. However, the Asian economic calendar also warrants consideration.

Industrial profits from China, inflation numbers from Japan, and producer prices from Australia will be in focus. Investors will also be mindful of US inflation numbers during the Friday US session. Stickier-than-expected figures could fuel bets on a December Fed rate hike.

In the Futures Markets, the ASX 200 and the Nikkei 225 were down 3 and 40 points, respectively.

ASX 200

The ASX 200 declined by 0.61% on Thursday. The S&P/ASX All Technology Index (XTX) tumbled by 2.47% as investors reacted to the rise in yields and Alphabet’s earnings. On Thursday, the big four banks ended the day in negative territory on hawkish RBA policy bets. However, mining stocks cushioned the downside.

Westpac Banking Corp (WBC) slid by 1.11%, with the National Australia Bank (NAB) declining 0.42%. ANZ Group (ANZ) and the Commonwealth Bank of Australia (CBA) fell by 0.24% and 0.36%.

However, Fortescue Metals Group (FMG) gained 0.86%. Rio Tinto (RIO) and BHP Group Ltd (BHP) rose by 1.20% and 0.47%. Newcrest Mining (NCM) declined by 1.27%.

Woodside Energy Group (WDS) and Santos Ltd (STO) saw gains of 0.03% and 0.26%.

Hang Seng Index

The Hang Seng Index fell by 0.24% on Thursday.

Alibaba Group Holding Ltd (HK:9988) rose by 0.57%, while Tencent Holdings Ltd (HK:0700) fell by 0.07%.

Bank stocks also had a mixed session. HSBC Holdings PLC (HK:0005) slid by 2.31%. However, China Construction Bank (HK:0939) and Industrial and Commercial Bank of China (HK:1398) saw gains of 1.12% and 0.80%.

Nikkei 225

(Graph for reference purposes only)

The Nikkei tumbled by 2.14%, with chip stocks delivering heavy losses.

SoftBank Group Corp. (9984) and Tokyo Electron Limited (8035) slid by 4.17% and 5.03%. Sony Corp. (6758) ended the day down 2.82%, with Fast Retailing Co (9983) falling by 2.56%. KDDI Corp. (9433) slipped by 0.91%.

Bank stocks also ended the Thursday session in negative territory. Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group (8306) ended the Thursday session down 1.22% and 0.97%, respectively.

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