Hang Seng Index, ASX 200, Nikkei 225: US Jobs Report and China

Highlights

• The Hang Seng Index and ASX 200 ended the Friday session in negative territory, while the Nikkei saw gains on a stronger USD/JPY.
• Overnight US economic indicators from Thursday influenced market risk sentiment.
• On Monday, investors will respond to the US Jobs Report from Friday.

Overview of the Friday Session

On Friday, the Hang Seng Index and ASX 200 ended the session in negative territory. However, the Nikkei bucked the trend, with a stronger USD/JPY and better-than-expected Services PMI numbers supporting gains.

However, overnight US economic indicators from Thursday set the tone for the Friday session. The ADP reported a larger-than-expected increase in employment, with jobless claims falling. Better-than-expected US Services PMI numbers also supported expectations of a US soft landing.

Nonetheless, the numbers also delivered uncertainty about Q1 Fed rate cut intentions. Tighter labor market conditions could fuel consumer spending and demand-driven inflation. The net effect could be a higher-for-longer Fed rate path to curb spending.

On Thursday, the Nasdaq Composite Index and the S&P 500 saw losses of 0.56% and 0.34%, respectively. The Dow rose by 0.03%. 10-year US Treasury yields climbed 2.07% to 4.001% on Thursday.

US Jobs Report to Set the Tone for the Monday Session

On Monday, the US Jobs Report from Friday will influence the Asian equity market session. A hotter-than-expected US Jobs Report eased bets on a Q1 2024 Fed rate hike. However, the numbers and the ISM Services PMI sent mixed signals about the US labor market.

The US equity markets made gains despite the US Jobs Report. On Friday, the S&P 500 rose by 0.18%, with the Nasdaq Composite Index and Dow ending the day up 0.09% and 0.07%, respectively. However, 10-year US Treasury yields increased by 1.22%, ending the week at 4.050%.

There are no Asian economic indicators to influence the Monday session. However, investors must consider central bank commentary and geopolitical risk throughout the session.

ASX 200

The ASX 200 fell by 0.07% on Friday. Tech, oil, and mining stocks dragged the index into negative territory. The S&P ASX All Technology Index (XTX) slid by 1.17%.

Oil stocks ended the week on the back foot: Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) saw losses of 0.73% and 0.26%, respectively.

Mining stocks saw heavier losses on weaker iron ore prices. Fortescue Metals Group Ltd. (FMG) slid by 2.56%. BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) ended the day down 1.03% and 1.59%, respectively.

However, Gold (XAU/USD) stocks saw gains: Evolution Mining Ltd. (EVN) and Northern Star Resources Ltd. (NST) rose by 0.26% and 1.25%, respectively. The big four banks also avoided negative territory.

Commonwealth Bank of Australia (CBA) and Westpac Banking Corp. (WBC) saw gains of 1.35% and 0.97%, respectively. ANZ Group Holdings Ltd (ANZ) and National Australia Bank Ltd. (NAB) rose by 0.31% and 0.33%, respectively.

Hang Seng Index

The Hang Seng Index declined by 0.66% on Friday. The Hang Seng Tech Index (HSTECH) slid by 1.71%. Property stocks also ended the day in negative territory. The Hang Seng Mainland Properties Index (HSMPI) fell by 0.36%.

Alibaba (9988) and Tencent (0700) slid by 3.24% and 2.21%, respectively.

Bank stocks had another mixed session. HSBC (0005) rose by 0.24%. However, China Construction Bank (0939) and Industrial Commercial Bank (1398) fell by 0.65% and 0.79%, respectively.

The Nikkei 225

(Graph for reference purposes only)

On Friday, the Nikkei ended the session up 0.27%.

Bank stocks had another positive session. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) rallied 2.59% and 2.69%, respectively. However, it was a mixed session for the main components of the Nikkei.

KDDI Corp. (9433) rose by 1.03%. Softbank Group Corp. (9948) and Tokyo Electron Ltd. (8035) rose by 0.50% and 0.48%, respectively. Sony Group Corp. (6758) ended the day up 0.57%, while Fast Retailing Co. Ltd. (9983) fell by 0.14%.

For upcoming economic events, check out our economic calendar.