Hang Seng Index, ASX200, Nikkei 225: Hang Seng Slides on Fed Fear

Market Overview

It was a mixed morning session. There were no US economic indicators from Monday to provide direction, with the US markets closed to commemorate George Washington’s birthday. With no stats to consider, the US futures market, Asian economic indicators, and Fed Fear weighed on the Hang Seng Index and the broader Asian markets.

Fading hopes of a China economic resurgence also weighed on market sentiment this morning.

Private sector PMI numbers for February were in the spotlight today, which failed to drive demand for riskier assets ahead of today’s US PMI numbers.

For the ASX 200 and the Nikkei 225, investor sentiment toward central bank policy outlooks remained headwinds ahead of tomorrow’s FOMC meeting minutes. Amidst hawkish Fed bets, there is uncertainty over the Bank of Japan’s monetary policy outlook as inflationary pressures build.

ASX 200

The ASX 200 was down 0.23% this morning. A bearish end to the week for the Dow Jones and a fall in the Dow mini weighed ahead of economic indicators and the RBA meeting minutes.

Ahead of the RBA meeting minutes, private sector PMIs for February delivered mixed results. While the manufacturing PMI increased from 50.0 to 50.1 in February, the services sector continued to contract. According to prelim figures, the services PMI rose from 48.6 to 49.2.

Following the mixed PMI numbers, the RBA released its monetary policy meeting minutes, which delivered no surprises. Last week, RBA Governor Lowe signaled more interest rate hikes to tackle inflation. According to the minutes,

“Members agreed that further increases in interest rates are likely to be needed over the coming months ahead to ensure that inflation returns to target and that the current period of high inflation is only temporary.”

This morning, bank stocks had a bearish morning. Westpac Banking Corp (WBC) and National Australia Bank (NAB) saw losses of 1.32% and 0.99%, respectively. Commonwealth Bank of Australia (CBA) and ANZ Group (ANZ) also saw red, falling by 0.69% and 0.76%, respectively.

Mining stocks had a mixed session. Rio Tinto (RIO) and Fortescue Metals Group (FMG) were up by 1.22% and 2.92%, respectively, while BHP Group Ltd (BHP) slipped by 0.33%. Newcrest Mining (NCM) was up by 0.63%.

Oil stocks found support, with Woodside Energy Group (WDS) and Santos Ltd (STO) rising by 0.49% and 0.29%, respectively. The gains came despite WTI sitting remaining at sub-$77 this morning.

On the earnings front, BHP Group Ltd released earnings today. A cut in dividend payouts off a slide in profits weighed. The company declared a $0.90 a share. The dividend payout was down from $1.50 a share a year ago.