On Friday, Asian equity markets reversed course. The Nikkei was the first to fall, followed by the Hang Seng Index and the ASX 200. Despite the (NVDA) results report, tech stocks fell, with China's restriction on Japanese seafood imports adding to the selling pressure. Investors ignored Japan's weaker inflation figures, and a stronger dollar provided little …
On Friday, Asian equity markets reversed course. The Nikkei was the first to fall, followed by the Hang Seng Index and the ASX 200.
Despite the (NVDA) results report, tech stocks fell, with China’s restriction on Japanese seafood imports adding to the selling pressure. Investors ignored Japan’s weaker inflation figures, and a stronger dollar provided little relief.
Investor morale was pulled down by Thursday’s US economic readings and losses across the US equities markets. Fears of a hawkish Fed interest rate outlook were exacerbated by tight labor market conditions. Initial jobless claims in the United States fell from 240, 000 to 230, 000. In July, core durable goods orders increased by 0.5%. Economists predict a 0.2% rise.
The higher-than-expected figures corresponded with a shift in attention to Fed Chair Powell and the Jackson Hole Symposium.
The NASDAQ fell 1.87% on Thursday, while the S&P 500 and Dow fell 1.35% and 1.08%, respectively.
In Focus: Fed Chair Powell’s Speech and China
Australia’s economic indicators will be closely watched this morning, with July retail sales figures in particular. A larger-than-expected gain in retail sales might put the RBA on the map. Following the poor employment numbers, investors expect the RBA to remain on hold in September.
While we expect the ASX 200 to be sensitive to the statistics, Asian markets will take into account Fed Chair Powell’s speech and the US share market advances. Powell left the door open to more rate hikes. However, expectations of slower wage growth and lower inflationary pressures mitigated the impact on US equity markets.
The Dow and NASDAQ Composite Index increased by 0.73% and 0.94%, respectively, while the S&P 500 increased by 0.67%. While the gains in the United States should provide assistance, China will remain a factor. Following news that the business met its restart guidance and applied to resume trading today, China Evergrande Group (HK: 3333) will be a focus point.
Asian futures indicate a bullish open this morning. Dovish Bank of Japan Governor Ueda’s remarks at the Jackson Hole Symposium should provide Nikkei with assistance.
ASX 200
The ASX 200 fell 0.93% due to Fed monetary policy concerns. The big four banks and mining stocks have joined the tech stock sell-off.
The Commonwealth Bank of Australia (CBA) and The National Australia Bank (NAB) both lost 1.03% and 1.76% on Friday, respectively. Westpac Banking Corp (WBC) and ANZ Group (ANZ) both declined by 0.90% and 0.51%, respectively.
Mining stocks were also down. Rio Tinto (RIO) and BHP Group Ltd (BHP) were down 0.85% and 1.74%, respectively, on the day. Newcrest Mining (NCM) and Fortescue Metals Group (FMG) saw less severe losses, falling by 0.74% and 0.62%, respectively.
Today’s focus will be on Fortescue Metals Group, which will release its full-year earnings reports.
Concerns about demand weighed on oil stocks. The shares of Woodside Energy Group (WDS) and Santos Ltd (STO) declined 1.34% and 1.15%, respectively.
Hang Seng Index
The Hang Seng Index dipped 1.40%, snapping a three-day winning streak, as investors sold off technology firms ahead of Powell’s speech.
The HSI losses were caused by the main Index components. Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) both ended the day down 2.29% and 1.60%, respectively.
The performance of bank stocks was uneven. HSBC Holdings PLC and China Construction Bank (HK: 0939) both lost 0.76% and 0.24% of their value. The Industrial and Commercial Bank of China (HK:1398) outperformed the market, increasing by 0.29%.
Nikkei 225
The Nikkei 225 fell 2.05%, weighed down by China’s restriction on Japanese seafood imports and fears of a more aggressive Fed. On Friday, a higher USD/JPY brought no solace.
Banks lost money last week. Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group (8316) both dropped by 0.34% and 0.39%, respectively.
Tokyo Electron Limited (8035) and SoftBank Group Corp. (9984) both reversed Thursday’s gains, falling 5.93% and 3.05%, respectively. Artificial intelligence and chip-related stocks were among the poorest performers.
Fast Retailing Co (9983), on the other hand, slumped 3.04% after China banned Japanese seafood imports. Following the Japanese government’s dumping of tainted water into the sea, retailers exposed to China face further action from Beijing. In China, the company operates approximately 900 Uniqlo locations.
KDDI Corporation (9433) and Sony Corporation (6758) both declined by 1.07% and 1.29%, respectively.
Risk disclaimer:
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.
