Hang Seng Index, ASX200, Nikkei 225: HSI Sees Red on Recession Fear

Key Insights:

• It was a mixed Tuesday morning, with the Hang Seng Index and ASX 200 seeing red while the Nikkei found support.
• Recessionary jitters resurfaced, with economic indicators from Germany raising red flags ahead of the US CPI Report mid-week.
• This morning, economic indicators from Australia, Japan, and China delivered mixed signals to test buyer appetite.

Market Overview

It was a mixed Tuesday morning session for the Asian markets. The Hang Seng Index and the ASX 200 saw red, while the Nikkei found support.

There were no US economic indicators from Monday to influence investor sentiment. The lack of stats left investors to fret over the threat of a US and global recession. On Monday, economic indicators from Germany highlighted the weak global macro environment, with industrial production falling by more than expected.

Uncertainty toward the US economic outlook also limited the impact of the US Jobs Report on sentiment toward Fed monetary policy. According to the CME FedWatch Tool, the probability of a 25-basis point June interest rate hike increased from 8.5% to 14.9% over 24 hours.

On Monday, the NASDAQ Composite Index gained 0.18%, with S&P 500 ending the day up 0.05%. The Dow slipped by 0.17%. However, the NASDAQ mini was down 14 points this morning, with the Dow falling by 27.

This morning, trade data from China delivered modest support to riskier assets.

China’s dollar trade surplus widened from $88.19 billion to $90.21 billion in April versus a forecasted $71.60 billion. Significantly, imports tumbled 7.9% year-over-year versus a 1.4% fall in March. Exports rose by 8.5% versus 14.8% in March. Economists forecast imports to decline by 5.0% and exports to increase by 8.0%.

However, while better-than-expected export numbers were bullish, the larger-than-forecast imports decline raised demand concerns.

ASX 200

The ASX 200 was down 0.22%, with mining stocks weighing. Finalized retail sales figures had no impact, with a 0.4% increase in retail sales unchanged from prelim numbers.

The big-4 had a mixed morning. Westpac Banking Corp (WBC) slipped by 0.14% to buck the bullish trend.

However, the National Australia Bank (NAB) was up 0.66%, with the Commonwealth Bank of Australia (CBA) and ANZ Group (ANZ) seeing modest gains of 0.01% and 0.08%, respectively.

Resurfacing recessionary jitters weighed on mining stocks. Rio Tinto (RIO) and BHP Group Ltd (BHP) fell by 0.05% and 0.38%, respectively, while Fortescue Metals Group (FMG) gained 0.44%. Newcrest Mining (NCM) was down 0.68%.

Oil stocks also struggled. Woodside Energy Group (WDS) and Santos Ltd (STO) saw losses of 0.59% and 0.55%, respectively. Brent Crude was down 0.50% to $76.70 this morning.

Hang Seng Index

This morning, the Hang Seng was down 0.49%. Recessionary jitters weighed on investor sentiment ahead of the US CPI Report.

Considering the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) saw losses of 1.64% and 0.98%, respectively.

Bank stocks had a mixed morning session. HSBC Holdings PLC rose by 0.17%, while the Industrial and Commercial Bank of China (HK:1398) was flat. China Construction Bank (HK: 0939) was down 0.18%

CNOOC (HK: 0883) gained 1.07%.

Nikkei 225

The Nikkei 225 gained 0.54% this morning, the upside coming despite weaker-than-expected household spending figures and a weaker USD/JPY. In March, household spending fell by 0.8% versus a forecasted 1.5% increase. Household spending declined by 2.4% in February.

Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group saw gains of 1.40% and 1.64%, respectively.

Considering the main components, Sony Corp (6758) led the way, gaining 2.11%, with Tokyo Electron Limited (8035) up 0.99%. SoftBank Group Corp. (9984) and KDDI Corp (9433) were up by 0.43%, respectively, with Fast Retailing Co (9983) rising by 0.26%.

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