Hang Seng Index, ASX200, Nikkei 225: Earnings Send the Nikkei South

Key Insights:

• It was a mixed morning session for the Asian markets, with the Nikkei 225 seeing red.
• Corporate earnings weighed on the Nikkei 225, while the ASX200 was in recovery mode following the RBA-driven pullback on Tuesday.
• Despite Fed Chair Powell’s non-committal speech from Tuesday, Fed Fear will likely linger until the Fed hawks have had their say. Later today, FOMC members Williams, Barr, and Waller will speak.

Market Overview

It was a mixed morning session. While there were no US economic indicators from Tuesday to influence risk sentiment, Fed Chair Powell delivered a bullish session for the US indices. The Dow rose by 0.78%, with the NASDAQ Index and S&P 500 seeing gains of 1.90% and 1.29%, respectively. The Hang Seng Index and ASX200 found early Powell support.

The market-friendly speech resonated this morning but failed to deliver support to the Nikkei 225 that struggled. There were no economic indicators from Asia to provide direction, leaving the markets to consider corporate earnings, geopolitical risk, and whether other FOMC members will have a similar view to the Fed Chair on monetary policy.

ASX 200

The ASX 200 was up 0.25% this morning. There were no Australian economic indicators to guide investors. The lack of stats left the Fed Chair Powell speech to deliver morning support. However, the upside was modest following the hawkish RBA interest rate hike. On Tuesday, the RBA warned of more rate hikes, which had sent the ASX 200 into the red.

This morning, bank stocks were on the rise. ANZ Group (ANZ) was up 0.62%, with the Commonwealth Bank of Australia (CBA) rising by 0.01%. National Australia Bank (NAB) and Westpac Banking Corp (WBC) saw gains of 1.01% and 0.44%, respectively.

Mining stocks also delivered support. BHP Group Ltd (BHP) and Rio Tinto (RIO) were up 0.23% and 0.93%, respectively, with Fortescue Metals Group (FMG) gaining 1.45%. Newcrest Mining (NCM) continued to find support on the news of US mining company Newmont Corp’s $17 billion bid, rising by 1.64%. However, Suncorp Group (SUN) was a front-runner, rallying 4.09% on corporate earnings.

Suncorp (SUN) reportedly posted a 63% surge in first-half cash earnings, driven by margins and investment returns.

Hang Seng Index

The Hang Seng was up 0.19% this morning.

Tencent Holdings Ltd (HK:0700) was up 0.85%, with Alibaba Group Holding Ltd (HK:9988) rising by 1.55% through the morning.

Bank stocks had a mixed morning, however. Industrial and Commercial Bank of China (HK:9988) rose by 1.00%, while China Construction Bank (HK: 0939) was flat. HSBC Holdings PLC gained 1.43%.

However, CNOOC (HK: 0883) was a front-runner, rallying by 2.15% on the uptrend in crude oil prices. This morning, WTI was up 0.34% to $77.40.

Nikkei 225

The Nikkei 225 bucked the broader market trend, falling by 0.37% this morning. A weaker USD/JPY and corporate earnings weighed.

SoftBank Group Corp. (9984), Sharp Corp. (6753), and Nintendo (7974) saw heavy losses, with disappointing results and gloomy outlooks weighing.

Softbank Group Corp (9484) and Nintendo (7974) saw losses of 1.01% and 6.05%, respectively, while Sharp Corp. (6753) tumbled by 11.00%. Sony Corp (6758) declined by 0.87%.

Elsewhere, Fast Retailing Co (9984) was down 1.55%, while KDDI Corp (9433) and Tokyo Electron Ltd (8035) found much-needed support, rising by 0.28% and 0.49%, respectively.

Check out our economic calendar for today’s economic events.