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

Highlights

• The ASX 200 led the Nikkei into positive territory on Friday, while the Hang Seng Index ended the session in negative territory.
• On Monday, the US Jobs Report from Friday and US equity market gains will set the tone for the Asian session.
• Service sector PMIs from Australia, Japan, and China also warrant investor attention.

Overview of the Friday Session

On Friday, the Hang Seng Index ended the session in negative territory. However, the ASX 200 and the Nikkei bounced back after a negative start to February.

Overnight US economic indicators from Thursday had a limited impact on the markets. Labor market numbers were weaker than forecast but failed to sway bets on a March Fed rate cut.

However, corporate earnings were in focus before Friday’s US Jobs Report. Apple Inc. (AAPL), Amazon.com Inc. (AMZN), and Meta Platforms Inc. (META) were among the big names to release earnings on Thursday.

The US equity markets ended the session in positive territory. On Thursday, the Dow gained 0.97%. The Nasdaq Composite Index and S&P 500 rose by 1.30% and 1.25%, respectively.

However, Asian economic indicators also influenced the Asian session. Australian producer prices increased by 0.9% quarter-on-quarter in Q4 versus 1.8% in Q3. Softer producer prices signal dampening consumer price inflationary pressures, supporting bets on an RBA rate cut.

US Jobs Report and Services PMIs in Focus

On Monday, the US Jobs Report and gains across the US equity markets will likely set the tone for the Asian session. Nonfarm payrolls surged 353,000, with wage growth accelerating in January. Average hourly earnings increased by 4.5% year-over-year after rising by 4.1% in December.

On Friday, the Nasdaq Composite Index rallied 1.74%. The Dow and the S&P 500 saw gains of 0.35% and 1.07%, respectively.

Asian economic indicators also need consideration on Monday. Finalized Services PMIs for Australia and Japan and the China Caixin Services PMI will be in focus. However, the China Caixin Services PMI will likely have more impact. Economists forecast the China Caixin Services PMI to remain at 52.9.

For the ASX 200, trade data for December will influence buyer appetite for ASX-listed stocks. Economists expect the Australian trade surplus to narrow from A$11.437 billion to A$11.000 billion.

Beyond the economic calendar, stimulus chatter from Beijing, corporate earnings, and geopolitical tensions need consideration.

On Monday, the ASX 200 futures were down 69 points, while the Nikkei futures were up 280 points.

ASX 200

The ASX 200 rallied 1.47% on Friday. Gains were broad-based, though gold and tech stocks led the way. The S&P ASX All Technology Index (XTX) jumped 2.41% as investors reacted to the US mega-cap tech earnings results.

Gold (XAU/USD) stocks had a positive session. Northern Star Resources Ltd. (NST) and Evolution Mining Ltd. ended the day up 4.11% and 2.21%, respectively.

ANZ Group Holdings Ltd (ANZ) and Commonwealth Bank of Australia (CBA) rose by 1.26% and 1.50%, respectively. National Australia Bank Ltd. (NAB) and Westpac Banking Corp. (WBC) ended the day up 1.10% and 1.18%, respectively.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) saw gains of 0.62% and 1.80%, respectively.

However, it was a mixed Friday session for mining stocks. BHP Group Ltd (BHP) and Fortescue Metals Group Ltd. (FMG) gained 1.06% and 0.78%, respectively. Rio Tinto Ltd. (RIO) fell by 0.22%.

Hang Seng Index

The Hang Seng Index declined by 0.21% on Friday, bucking the broader market trend. Real estate stocks limited the downside. The Hang Seng Mainland Properties Index (HSMPI) rose by 1.29%. However, tech stocks contributed to the losses. The Hang Seng Tech Index (HSTECH) fell by 0.72%.

Alibaba (9988) ended the session down 0.49%, while Tencent (0700) gained 2.87%.

Bank stocks also had a mixed session. HSBC (0005) rose by 0.74%, while China Construction Bank (0939) fell by 0.22%. Industrial Commercial Bank (1398) ended the session flat.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei gained 0.41% on Friday.

Bank stocks had a mixed session. Sumitomo Mitsui Financial Group Inc. (8316) fell by 0.25%, while Mitsubishi UFJ Financial Group Inc. (8306) gained 0.22%.

The main components of the Nikkei also had a mixed session.

Tokyo Electron Ltd. (8035) rallied 1.66%, with Softbank Group Corp. (9948) gaining 0.91%.

Sony Group Corp. (6758) and KDDI Corp. (9433) ended the day up 0.59% and 0.53%, respectively. Fast Retailing Co. Ltd. (9983) declined by 0.54%.

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