Hang Seng Index, ASX 200, Nikkei 225: Futures Markets Signal Green for the ASX 200 and Nikkei

Highlights

• The Hang Seng Index and Nikkei kickstarted the week in positive territory, while the ASX 200 saw losses on Monday.
• Hopes of better ties between the US and China supported an upbeat session for the Hang Seng Index.
• Futures signal a positive start to the Tuesday session.

Overview of the Monday Session

On Monday, the Hang Seng Index and the Nikkei 225 saw gains, while the ASX 200 ended the session in negative territory.

Tech Stocks and US-China Relations Offer Support

US equity market gains from the Friday session set the tone for the Monday Asian session. 10-year US Treasury yields steadied on Friday after the Fed Chair Powell’s hawkish-induced surge on Thursday.

Softer Michigan consumer sentiment figures but higher-than-expected inflation expectations failed to impact the US equity markets.

On Friday, the Nasdaq Composite Index rallied 2.05%, with the Dow and S&P 500 rising by 1.15% and 1.56%, respectively.

There were no economic indicators from the Asian calendar to influence the Monday session. Tech stocks were on the rise, tracking the Nasdaq gains from Friday. Hopes of a thawing in relations between the US and China drove demand for Hang Seng-listed stocks. US President Joe Biden and China Premier Xi Jinping meet this week.

Improved US-China relations could ease pressure on chip stocks, with the pullback in Treasury yields also a boon for tech stocks.

However, corporate earnings and a grim RBA economic outlook weighed on the ASX 200.

Pre-US CPI Report Nerves May Test Riskier Assets

On Monday, the US equity markets had a mixed session. The Dow gained 0.16%, while the Nasdaq Composite Index and S&P 500 fell by 0.22% and 0.08%.

10-year US Treasury yields eased back at the start of the week. A US consumer inflation expectations report showed a softer inflation outlook, albeit modestly down from 3.7% to 3.6%.

However, caution prevailed ahead of US inflation numbers on Tuesday.

The pullback in US Treasury yields and steady US equity market session will likely offer early support to the Asian equity markets.

However, corporate earnings need consideration, with business and consumer sentiment figures likely to affect ASX 200 trends.

Big names on the earnings calendar include Mitsubishi UFJ Financial Group (TYO: 8306), Sumitomo Mitsui Financial Group (TYO: 8316), Tencent Music Entertainment Group (HK: 1698), and Commonwealth Bank of Australia (ASX: CBA).

Futures Market Flashes Green

On Tuesday, the futures markets signaled a positive start to the session. The ASX 200 and the Nikkei were up 68 and 210 points, respectively.

ASX 200

The ASX 200 fell by 0.40% on Monday. The S&P/ASX All Tech Index ended the session relatively flat while banks, energy, gold, and mining stocks weighed.

Australia and New Zealand Banking Group Ltd. (ANZ) slid by 3.02% as investors reacted to an earnings miss. Westpac Banking Corp. (WBC) and the Commonwealth Bank of Australia (CBA) fell by 0.29% and 0.01%. The National Australia Bank Ltd. (NAB) reversed losses from Monday, gaining 1.55%.

Mining stocks had a mixed session. BHP Group Ltd. (BHP) rose by 0.29%. However, Rio Tinto Ltd. (RIO) Fortescue Metals Group Ltd. (FMG) saw losses of 0.24% and 0.25%.

Oil stocks ended the session in negative territory. Woodside Energy Group Ltd. (WDS) and Santos Ltd. (STO) fell by 0.69% and 1.66%.

Gold stocks contributed to the ASX loss. Evolution Mining Ltd. (EVN) and Northern Star Resources Ltd. (NST) fell by 1.63% and 2.58%, respectively.

However, Gold Spot and crude oil prices saw gains on Monday, signaling a positive start to the Tuesday session.

Hang Seng Index

The Hang Seng Index rallied 1.30% on Monday.

Alibaba (9988) and Tencent (0700) saw gains of 1.32% and 2.31%, respectively.

Bank stocks also ended the Monday session in positive territory. HSBC (0005) rose by 0.79%. China Construction Bank (0939) and the Industrial and Commercial Bank (1398) ended the day up 1.36% and 1.09%, respectively.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei 225 rose by 0.05% on Monday.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group (8306) saw gains of 0.53% and 0.68%. However, it was a mixed Monday for the main components of the Nikkei 225.

Sony Corp (6758) slid by 2.43%, with Softbank (9984) and Fast Retailing (9983) falling by 0.48% and 0.25%, respectively.

However, Tokyo Electron (8035) rallied 1.74%, tracking the tech stocks across the region, with KIDDI Corp. (9433) gaining 0.41%.

For upcoming economic events, check out our economic calendar.