Hang Seng Index, ASX200, Nikkei 225: Hang Seng Bucks a Bearish Trend

Key Insights:

• It was a mixed morning session for the Asian markets, with the ASX200 and the Nikkei 225 seeing red.
• Hawkish Fed commentary from Wednesday weighed on riskier assets, with the ASX 200 tracking the Dow into the red.
• There were no economic indicators to distract investors this morning as investors looked ahead to the US Jobless Claims report.

Market Overview

It was a mixed morning session. While there were no US economic indicators from Wednesday to influence risk sentiment, FOMC members Williams and Waller delivered hawkish outlooks on monetary policy to overshadow Powell’s market-friendly speech from Tuesday.

FOMC member John Williams talked of a strong labor market and the need to do more to bring inflation to target. Williams reportedly said that a peak rate of 5%-5.25% is still a reasonable view that contrasted with Fed Chair Powell’s hope of rates staying below 5%.

FOMC member Christopher Waller reportedly spoke of needing to keep monetary policy tighter for longer than anticipated.

The hawkish commentary preceded today’s US jobless claims, with another fall in initial claims likely to support a more hawkish policy outlook.

ASX 200

The ASX 200 was down 0.48% this morning. There were no Australian economic indicators to guide investors. The lack of stats left the hawkish Fed chatter to weigh.

This morning, bank stocks were on the decline. Commonwealth Bank of Australia (CBA) was down 0.45%, with Westpac Banking Corp (WBC) falling by 0.29%. ANZ Group (ANZ) and National Australia Bank (NAB) saw modest losses of 0.16% and 0.09%, respectively.

Mining stocks also struggled. BHP Group Ltd (BHP) and Rio Tinto (RIO) were down 0.70% and 0.88%, respectively, with Fortescue Metals Group (FMG) down 0.09%. Newcrest Mining (NCM) bucked the broader trend, rising by 0.12%.

On the corporate earnings front, AGL Energy Ltd (AGL) slid by 7.18% in response to disappointing earnings and halving its interim dividend.

Hang Seng Index

The Hang Seng was up 0.19% this morning.

Tencent Holdings Ltd (HK:0700) was up 0.58%, with bank stocks also finding support. Industrial and Commercial Bank of China (HK:9988 and China Construction Bank (HK: 0939) were up 0.74% and 0.81%, respectively, with HSBC Holdings PLC gaining 1.22%.

CNOOC (HK: 0883) continued to make gains, rising by 1.40% on the uptrend in crude oil prices. This morning, WTI was down 0.09% to $78.40.

However, Meituan Inc. (HK: 3690) slid by 6.48% on news of hiring 10,000 to combat a challenge from ByteDance Ltd, with Alibaba Group Holding Ltd (HK:9988) falling by 1.24%

Nikkei 225

The Nikkei 225 was down 0.29% this morning despite a stronger USD/JPY from the hawkish Fed chatter.

Tokyo Electron Ltd (8035) slid by 2.31%, with SoftBank Group Corp. (9984), Fast Retailing Co (9984), and KDDI Corp (9433) seeing red. Sony Corp (6758) also struggled, falling by 0.67%.

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