The Asian equities markets had yet another risk-off session. The Nikkei led the way down, while the ASX 200 suffered a little loss. Due to a Black Rainstorm warning, trading on the Hang Seng Index was halted.
The tone is established by labor market economic data in the United States. Tighter labor market circumstances backed up a more hawkish view of the Fed’s interest rate path. The shift in perception about the Fed’s interest rate forecast was mirrored in the US equities markets. The S&P 500 and NASDAQ Composite Index fell 0.32% and 0.09%, respectively, on Thursday, while the Dow gained 0.17%.
Japan’s economic data aggravated the gloom. Preliminary GDP revisions downward reinforced the Bank of Japan’s ultra-easy monetary policy, but also underscored underlying economic uncertainty. The implications of China’s trade figures on market mood were felt, with Beijing failing to deliver more stimulus to help the economy.
China’s August car sales and fresh Yuan loan numbers will have an impact on market risk sentiment and the Hang Seng Index. While the data was released after the Australian and Japanese markets shut, buyer interest may be dampened if another batch of dismal statistics is released. Economists predict that car sales would climb by 2.0% YoY (July: -1.4%), and new Yuan loans will increase from CNY345.9 billion to CNY1,200 billion. Forecasts enhance investors’ desire for riskier investments. While the figures will impact market risk appetite, investors should keep an eye on the news for signs of Chinese stimulus.
Gains in US equities markets on Friday will most likely give early support. However, investor concerns about more Fed rate rises and a higher-for-longer interest rate trajectory continue. The Consumer Inflation Expectations poll will be released later today as a precursor to the US CPI Report on Wednesday. Economists predict that consumer inflation expectations will fall from 3.5% to 3.4% in August, while the US annual inflation rate will rise from 3.2% to 3.6%. Given the Fed’s wagers and China’s economic troubles, investors should be cautious early in the week.
The S&P 500 and Dow gained 0.14% and 0.22%, respectively, on Friday, while the NASDAQ Composite Index closed flat.
On Friday, the ASX 200 fell by 0.20%. Iron ore futures continued to fall, weighing on mining companies. FMG (Fortescue Metals Group) fell 2.37%. BHP Group Ltd (BHP) and Rio Tinto (RIO) both finished the day down 1.19% and 1.71%, respectively. Newcrest Mining (NCM) increased by 0.59%.
The major four banks had a tumultuous session. ANZ Group (ANZ) and Westpac Banking Corporation (WBC) both gained 0.24%. The National Australia Bank (NAB) increased its share price by 0.21%. The Commonwealth Bank of Australia (CBA), on the other hand, defied the trend, decreasing by 0.09%. Oil stocks had a mixed session as well. Woodside Energy Group (WDS) increased by 0.11% while Santos Ltd (STO) decreased by 0.13%.
Despite a better USD/JPY exchange rate, the Nikkei 225 fell by 1.18%. Investors were put off by downward revisions to second-quarter GDP figures. The economy grew by 1.2% in the second quarter, compared to a preliminary 1.5%. The Thursday household expenditure estimates and the negative revision to GDP figures coincide with heightened warnings of government action to maintain the Yen. The possibility of intervention remains a headwind in China’s present macroeconomic environment.
Bank stocks finished the day in the red. Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group (1.30%) both declined. When it came to the primary components, it was similarly a mixed bag. Losses for Tokyo Electron Limited (8035) and Sony Corp. (6758) were 3.83% and 2.02%, respectively. Fast Retailing Co (9983) and KDDI Corp. (9433) both dropped by 1.26% and 0.61%, respectively. SoftBank Group Corp. (9984) outperformed the market, rising 0.22%.
The Hong Kong stock exchange was closed on Friday. The CSI300, on the other hand, finished the Friday session down 0.49%.
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.