Hang Seng Index: Real Estate and Tech Lead Gains Amid China Data Relief

US Markets: Easing Geopolitical Risks Lift Wall Street

On Tuesday, November 26, US equity markets extended their gains from Monday. The Nasdaq Composite Index rose 0.63%, the S&P 500 gained 0.57%, while the Dow increased 0.28%.

News of Israel and Hezbollah signing an agreement boosted demand for the Dow and S&P 500, which reached record highs.

Rising Consumer Confidence and FOMC Minutes Strengthen Market Sentiment

The US CB Consumer Confidence Index rose from 109.6 in October to 111.7 in November. Rising consumer confidence could signal higher consumer spending, indicating a robust US economy.

Later in the Tuesday session, the FOMC Meeting Minutes highlighted balanced risks to inflation and employment targets, suggesting further rate cuts.

However, the Minutes revealed a divided Committee. Some Committee members discussed a willingness to hold interest rates if inflation remained elevated. Conversely, others stated the Fed could accelerate policy easing if the labor market and economic activity deteriorated.

Despite a divided Fed, FOMC members favored gradual interest rate cuts.

China’s Industrial Profits Signal Mixed Trends

On Wednesday, November 27, China’s industrial profits declined by 4.3% from January to October compared to the same period in 2023. Industrial profits were down 3.5% year-to-date (Y/Y) in September.

However, losses improved in October year-on-year, falling by 10% compared with 27.1% in September. The October year-on-year numbers countered the year-to-date numbers, offering market relief amid ongoing speculation about US tariffs on China.

Hang Seng Index Rises Amid FOMC Optimism and China Data

In Asian markets, the Hang Seng Index advanced 0.53% on Wednesday morning. The overnight FOMC meeting minutes and China’s industrial profit numbers drove the Index higher. Real estate and tech stocks contributed to the morning gains.

The Hang Seng Mainland Properties Index and Hang Seng Tech Index gained 0.68% and 0.80%, respectively. Tencent (0700) advanced by 0.89%.

Mainland China’s equity markets recovered from another gloomy start to the session. The CSI 300 and the Shanghai Composite were up 0.82% and 0.39%, respectively.

However, Trump’s tariff threats remained a headwind for the HK and Mainland China Indexes.

Natixis Asia Pacific Chief Economist Alicia Garcia Herrero commented on the potential impact of Trump policies, stating,

“Trump will be pushing on decoupling more generally. There will be export controls, restrictions on the trade of science and technology, and a push for the repatriation of profits. All of that can be even more negative than tariffs.”

Nikkei Index Falls on Yen Strength and BoJ Rate Hike Speculation

Japan’s Nikkei Index declined by 0.72% on Wednesday morning. Rising bets on a December Bank of Japan rate hike boosted demand for the Japanese Yen, impacting demand for Nikkei Index-listed stocks. The USD/JPY pair was down 0.24% to 152.709 on Wednesday after sliding by 0.71% on Tuesday.

Nissan Motor Corp. (7201) slid by 5.10% with a stronger Japanese Yen and concerns about Trump policies impacting export stocks. However, it was a mixed session for the tech sector. Tokyo Election (8035) dropped by 0.84%, while Softbank Group Corp. (9984) gained 0.72%.

ASX 200 Tracks Wall Street Higher

Shifting the focus to the Australian market, the ASX 200 Index advanced by 0.61% on Wednesday morning. Overnight gains from Wall Street set the tone for the Wednesday session.

However, China’s industrial profit numbers and Aussie inflation figures also contributed to the gains. The Aussie Monthly CPI Indicator increased by 2.1% in October, mirroring September, raising hopes for a nearer-term RBA rate cut. Economists had expected a 2.3% inflation rate.

Banking, gold, and tech stocks pushed the Index higher. The S&P/ASX All Technology Index gained 0.67%. Northern Star Resources Ltd. (NST) rallied 2.65% after gold prices advanced by 0.29% on Tuesday and trended higher on Wednesday. Commonwealth Bank of Australia (CBA) gained 1.91%.

Outlook

Investors should monitor developments from Beijing, central bank commentary, and US tariff-related news. Stimulus measures targeting Chinese domestic consumption could offset trade concerns, while BoJ rate path expectations may drive Japanese Yen trends. Stay updated with our latest insights to navigate market risks effectively.