Hang Seng Index, ASX200, Nikkei 225: Futures Flash Red

Key Insights:

• It was a mixed Tuesday session for the Asian equity markets, with the ASX 200 and Nikkei finding support.
• A surprise RBA hold on interest rates provided ASX 200 support, while PMI numbers from China weighed on the Hang Seng Index.
• This morning, investors will respond to the manufacturing PMIs from Europe and the US, with the bears ready to step in.

It was a mixed Tuesday for the Hang Seng Index and the broader Asian markets. The Hang Seng Index struggled, while the ASX 200 and the Nikkei found support.

A light overnight US economic calendar from Monday left investors to respond to Tuesday’s economic indicators from the region and the RBA interest rate decision.

After disappointing NBS private sector PMI numbers from Monday, the all-important Caixin Manufacturing PMI drew interest on Tuesday. The Caixin Manufacturing PMI slipped from 50.5 to 49.2 in July. Weak domestic and overseas demand weighed on production. Economists forecast the PMI to decline to 50.3.

However, the RBA surprised the markets, holding the cash rate at 4.10%. Economists forecast a 25-basis point rate hike.

The Wednesday Session

It is a quieter session for the Asian markets today, with no economic indicators to provide direction. The Bank of Japan will release the monetary policy meeting minutes from the June meeting. However, following the July tweak to ultra-loose, the minutes will likely have a limited influence on the USD/JPY.

Investors will consider the manufacturing PMIs from Europe and the US, which failed to impress. The Eurozone manufacturing PMI fell from 43.4 to a 38-month low of 42.7 in July, with the German manufacturing sector a significant drag. The German manufacturing PMI tumbled to 38.8, its lowest since May 2020, which coincided with the COVID-19 lockdown.

From Tuesday US session, the all-important US ISM Manufacturing PMI remained below 50, rising from 46.0 to 46.4 in July. With the US Jobs Report out on Friday, the JOLTs Job Openings Report was also a drag. Job openings fell from 9.616 million to 9.582 million in June.

It was a busy session on the earnings calendar, with Caterpillar (CAT), Uber (UBER), and Pfizer (PFE) in the spotlight. Caterpillar enjoyed a breakout session on second-quarter profits, while Pfizer and Uber saw red on missed earnings.

The Dow rose by 0.20%. On Tuesday, the NASDAQ Composite Index and the S&P 500 saw losses of 0.43% and 0.27%, respectively.

ASX 200

The ASX 200 rose by 0.54% on Tuesday, with bank and mining stocks providing support.

On Tuesday, The National Australia Bank (NAB) and ANZ Group (ANZ) saw gains of 0.56% and 0.50%, respectively. The Commonwealth Bank of Australia (CBA) and Westpac Banking Corp (WBC) rose by 0.13% and 0.40%, respectively.

Mining stocks had a mixed session, with Fortescue Metals Group and BHP Group Ltd (BHP) gaining 1.38% and 0.78%, respectively. Newcrest Mining (NCM) ended the day up 1.44%, while Rio Tinto bucked the trend, falling 0.17%.

Oil stocks had a bullish session. Woodside Energy Group (WDS) and Santos Ltd (STO) rose by 0.50% and 0.75%, respectively.

Hang Seng Index

The Hang Seng Index fell by 0.34%, with the manufacturing PMI numbers a drag.

Considering the main Index components, Tencent Holdings Ltd (HK:0700) fell by 0.11%, while Alibaba Group Holding Ltd (HK:9988) rose by 0.36%.

Bank stocks also had a mixed session. HSBC Holdings PLC gained 1.69% on a jump in profits. However, The Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) ended the day down 0.53% and 0.88%, respectively.

CNOOC (HK: 0883) rose by 1.11%.

Nikkei 225

The Nikkei 225 rose by 0.92%, with a resurgent dollar providing support.

The banks had a bearish session. Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group declined by 2.36% and 1.13%, respectively.

Looking at the main components, Tokyo Electron Limited (8035) led the way, rallying 2.82%, with Sony Corp (6758) up 1.24%. Fast Retailing Co (9983) and KDDI Corp (9433) ended the day with gains of 1.04% and 1.00%, respectively. However, SoftBank Group Corp. (9984) trailed the front runners, rising by 0.11%.

Check out our economic calendar for economic events.