Hang Seng Index, ASX200, Nikkei 225: Hang Seng Leads the Way

Market Overview

It was a bullish morning session. US retail sales figures for January impressed on Wednesday. Retail sales surged by 3.0% in January. Economists forecast a 1.8% increase. Retail sales had fallen for two consecutive months before January’s marked increase in consumption. Following the pickup in US service sector activity, the latest stats muted fears of a US economic recession.

The NASDAQ Composite Index rose by 0.92% on Wednesday, with the Dow Jones and S&P 500 seeing gains of 0.11% and 0.28%, respectively.

Significantly, the latest numbers from the US failed to fuel fears of more aggressive Fed policy moves to bring inflation to target. The markets are betting on the Fed pushing rates above 5%. Investors will likely stomach rates above 5% if the US avoids a recession.

ASX 200

The ASX 200 was up 0.72%. Employment numbers for January disappointed this morning. Australia’s unemployment rate rose from 3.5% to 3.7%, weighed by a 43.3k slump in full employment. The increase came despite a fall in the participation rate from 66.6% to 66.5%. While the numbers were disappointing, a higher unemployment rate could force the RBA to rethink its immediate policy goals.

This morning, bank stocks had a mixed session. Commonwealth Bank of Australia (CBA) bucked the trend, falling by 0.88%. Westpac Banking Corp (WBC) rose by 0.68%, with National Australia Bank (NAB) and ANZ Group (ANZ) seeing gains of 0.79% and 0.77%, respectively.

Mining stocks provided support. Rio Tinto (RIO) and BHP Group Ltd (BHP) were up by 0.60% and 0.50%, respectively, with Fortescue Metals Group (FMG) rising by 0.77%. However, Newcrest Mining (NCM) was down by 1.13%.

An overnight pullback in crude oil prices weighed on Woodside Energy Group (WDS) and Santos Ltd (STO), which fell by 0.68% and 1.63%, respectively. WTI was up 0.49% to $79.08 this morning.

However, earnings results were mixed. AMP Ltd (AMP) was down 13.74% on a sharp slide in annual profits, while Telstra Group (TLS) was up 2.05%. Block Inc (SQ2), the first crypto-related ASX listing, was up 9.22%, supported by a Wednesday crypto market rally.

Hang Seng Index

The Hang Seng was up 2.14% this morning. Market reaction to US retail sales figures delivered the bullish morning session.

Tencent Holdings Ltd (HK:0700) was up 3.50%, with Alibaba Group Holding Ltd (HK:9988) gaining 3.27%

Bank stocks also found support. Industrial and Commercial Bank of China (HK:1398) and China Construction Bank (HK: 0939) rose by 1.26% and 0.20%, respectively, with HSBC Holdings PLC up by 0.51%.

CNOOC (HK: 0883) found morning support off the back of a pickup in crude oil prices, rising by 0.79%.

Nikkei 225

The Nikkei 225 was up 0.18% this morning, with a USD/JPY return to 134 levels delivering further support. However, economic indicators pegged the Nikkei 225 back from more solid gains. Core machinery orders and trade data disappointed this morning.

In December, core machinery orders rose by 1.6% versus a forecasted 3.0% increase. Orders fell by 8.3% in November. Year-over-year, core orders were down 6.6% versus a 3.7% fall in November. Japan’s trade deficit widened from ¥1,452 billion to ¥3,497 billion in January. Imports were up 17.8%, while exports increased by a modest 3.5%.

SoftBank Group Corp. (9984) rose by 1.74%, with Fast Retailing Co (9983) gaining 1.93%. Tokyo Electron Ltd (8035) rose by 1.14%, while KDDI Corp (9433) fell by 0.35%. Sony Corp (6758) joined the broader market in the green, gaining 0.51%.