Hang Seng Index, Nikkei 225, ASX 200: HSI Losses Deepen Amid China’s Growth Concerns

US Markets: Tech Sector Earnings Underwhelm

On Tuesday, July 23, the US equity markets ended the session with losses. The Nasdaq Composite Index slipped by 0.06%, while the S&P 500 and the Dow saw losses of 0.16% and 0.14%, respectively.

Investors focused on corporate earnings results, with Alphabet Inc. (GOOGL) and Tesla Inc. (TSLA) releasing results after the closing bell. Tesla slid by 7.77% in after-hours trading because of an earnings miss. Alphabet Inc. fell by 2.18% as investors reacted to underwhelming earnings results.

Investors expect impressive earnings results from the Magnificent Seven. Disappointing results could lead to sharper pullbacks. The overnight US earnings results set the tone for the Asian Wednesday morning session.

Japan’s Jibun Bank Service PMI Impact

On Wednesday, service PMI numbers from Japan raised investor bets on a July Bank of Japan rate hike. The Jibun Bank Services PMI increased from 49.4 in June to 53.9 in July.

Input prices increased at a marked pace, with output price inflation higher, signaling a pickup in headline inflation. Higher inflation signals could green-light a July Bank of Japan interest rate hike. The better-than-expected numbers boosted Yen demand. The stronger Japanese Yen affected buyer appetite for Nikkei-listed export stocks.

S&P Global Market Intelligence Economist Usamah Bhatti commented on the July survey, stating,

“Firms continued to note stubbornly high input prices in the private sector.”

Hang Seng Index and Mainland China Stocks Extend Losses

Meanwhile, the Hang Seng Index fell by 0.33% on Wednesday morning. Real estate and tech stocks contributed to the morning losses.

The Hang Seng Tech (HSTECH) Index declined by 0.66% on Wednesday. Tencent (0700) fell by 0.27%. The Hang Seng Mainland Properties Index (HSMPI) was down 1.08%.

Concerns about the Chinese economy linger despite the People’s Bank of China cutting rates on Monday. Trade tensions also impacted buyer demand for Hong Kong and Mainland China-listed stocks. A trade war with the EU and the US could affect the Chinese economy.

The Shanghai SE Composite Index and CSI 300 were down 0.21% and 0.23%, respectively.

Nikkei Index Falls on Yen Strength

The Nikkei Index declined by 0.26% on Wednesday, a weaker USD/JPY impacting demand for Nikkei-listed stocks. On Wednesday, the USD/JPY was down 0.30% to 155.098, extending its losses from Tuesday (-0.91%).

KDDI Corp. (9433) and Fast Retailing Co. Ltd. (9983) fell by 0.74% and 0.53%, respectively. Nissan Motor Corp. (7201) slid by 1.35%, highlighting the effects of a stronger Yen on export stocks.

ASX 200 Tracks the US Markets into the Red

The ASX 200 Index slipped by 0.08% on Wednesday morning, tracking the overnight losses from the US. Mining and oil stocks left the Index in negative territory.

Woodside Energy Group Ltd (WDS) declined by 1.04% as oil prices fell on Tuesday. A 1.61% slide in iron ore spot prices impacted mining giants BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO), which fell by 0.58% and 0.05%, respectively.

Investors should remain alert with US politics and private sector PMIs in focus. Closely monitor the news wires, real-time data, and expert commentary to manage trading strategies accordingly. Stay informed with our latest news and analysis to manage positions across the Asian equity markets.