Hang Seng Index, ASX200, Nikkei 225: Hang Seng Trails on Growth Targets

Market Overview

It was a bullish start to the week for the Asian markets, with the ASX 200 and Nikkei 225 on the move. However, the Hang Seng Index trailed the front runners, with revised growth targets from Beijing testing buyer appetite.

Economic indicators from the US and a shift in sentiment toward Fed monetary policy supported a bullish end to the week for the US markets. The ISM Non-Manufacturing PMI slipped from 55.2 to 55.1, indicating solid service sector activity and a sharp rise in hiring. In February, the ISM Non-Manufacturing Employment Index jumped from 50.0 to 54.0.

However, the numbers failed to fuel more aggressive Fed policy bets, with the talk of slow and steady rate hikes resonating.

Hawkish chatter from the weekend failed to weigh in risk sentiment this morning. On Saturday, FOMC Member Mary Daly spoke of lifting interest rates in 50-basis point increments to tackle inflation.

However, growth targets from Beijing pegged back the Hang Seng Index. China delivered a 5% growth target, below market expectations of 5.5%. The disappointing growth target weighed on the CSI 300, which fell by 0.56% this morning, bucking a bullish market trend.

There were no economic indicators from Asia to distract investors this morning. With US factory orders out later today, the focus will shift to the Fed and Fed Chair Powell’s testimony on Tuesday. A move to a more hawkish posture would catch the markets by surprise.