Hang Seng Index, ASX200, Nikkei 225: Hang Seng Bulls Kickstart Q3

Key Insights:

• It was a bullish start to the month, with the Hang Seng Index leading the ASX 200 and Nikkei 225.
• US economic indicators from Friday supported a bullish morning session.
• Economic indicators from Japan, Australia, and China were also bullish this morning.

Market Overview

It was a bullish morning session for the Asian markets. The Hang Seng Index led the way, with the ASX 200 and Nikkei also on the move.

US economic indicators from Friday supported a bullish session for the US equity markets. Softer inflation numbers delivered a bullish end to the second quarter.

The Core PCE Price Index increased by 4.6% year-over-year in May versus 4.7% in April, with the PCE Price Index up 3.8% versus 4.3%. Personal spending was lackluster, rising by just 0.1% in May versus 0.6% in April.

On Friday, the NASDAQ Composite Index gained 1.45%, with the S&P500 and the Dow seeing gains of 1.23% and 0.84%, respectively.

This morning, economic indicators from Australia and Japan were also bullish. However, manufacturing PMI numbers from China were the focal point.

In June, the Caixin Manufacturing PMI fell from 50.9 to 50.5 versus a forecasted 50.2. While weak overseas demand was a drag, investors responded favorably to the better-than-expected headline PMI number. The latest PMI reading supports the hope of further PBoC support to boost economic activity.

ASX 200

The ASX 200 was up 0.32% this morning, with economic indicators from Australia also providing direction. Building approvals surged by 20.6% in May, reversing a 6.8% decline in April. Economists forecast a 2.0% rise.

The big-4 had a mixed morning. ANZ Group (ANZ) and Westpac Banking Corp (WBC) were up 0.17% and 0.16%, respectively. The Commonwealth Bank of Australia (CBA) also found support, gaining 0.06%, while The National Australia Bank (NAB) bucked the trend, falling by 0.08%.

However, mining stock had a bullish morning. Rio Tinto (RIO) and BHP Group Ltd (BHP) saw gains of 0.77% and 0.64%, respectively, with Fortescue Metals Group (FMG) up 0.07%. Newcrest Mining (NCM) found support, rising by 2.25%.

Oil stocks also had a bullish morning. Woodside Energy Group (WDS) and Santos Ltd (STO) were up 0.70% and 1.00%, respectively. Brent Crude was up 0.11% to $75.49 this morning.

Hang Seng Index

The Hang Seng was up 1.25% this morning, with the PMI numbers from China providing support.

Considering the main Index components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) were up 1.27% and 1.91%, respectively.

Bank stocks also had a bullish morning. HSBC Holdings PLC was up 0.98%, with The Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) gaining 1.20% and 0.59%, respectively.

CNOOC (HK: 0883) rose by 0.89%.

Nikkei 225

The Nikkei 225 was up 0.72% this morning, with economic indicators from Japan also providing support. The Tankan Larger Manufacturers Index increased from +1 to +5 in Q2 versus a forecasted +3.

From the banking sector, Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group rose by 0.88% and 1.22%, respectively.

Looking at the main components, Tokyo Electron Limited (8035) and Sony Corp (6758) led the way, rallying by 4.01% and 2.70%, respectively.

However, both SoftBank Group Corp. (9984) and Fast Retailing Co (9983) rose by 0.41%, with KDDI Corp (9433) gaining 0.11%.

Check out our economic calendar for economic events.