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On April 4, the Yangtze River Delta Railway ushered in the peak of passenger flow during the Qingming Festival. It is expected to send 4.1 million passengers today, 365,000 more than the same period last year, an increase of about 9.8%, and is expected to set a new record for single-day passenger volume. This years Qingming Festival railway transportation will start from April 3 to 7. The Yangtze River Delta Railway is expected to send 17.6 million passengers in 5 days, with an average daily passenger flow of 3.52 million, a year-on-year increase of 6.8%.The yield on the two-year U.S. Treasury note fell to a six-month low of 3.6550% and was last at 3.6611%.On April 4, local time on April 3, U.S. Secretary of Health and Human Services Robert Kennedy Jr. said that about 20% of the layoffs in the Department of Government Efficiency were wrong and needed to be corrected. The U.S. Department of Health and Human Services laid off about 10,000 people on the 1st. Kennedy said that people who should not have been laid off were laid off, and the department is restoring their positions. Kennedy said that canceling the entire lead poisoning prevention and monitoring department of the Centers for Disease Control and Prevention was one of the mistakes. At present, it is unclear what other projects Kennedy may plan to restore.Bank of Japan Governor Kazuo Ueda: Will consider the impact of food costs on consumers.On April 4, local time on the 3rd, the automobile company Stellantis said that due to the impact of the US import automobile tariff policy, the company decided to lay off 900 employees in its five US factories and suspend production operations at two assembly plants in Canada and Mexico. Antonio Filosa, Chief Operating Officer of Stellantis Americas, said that the US factories that were laid off were powertrain and stamping parts factories, which produced spare parts for two assembly plants in Canada and Mexico. According to the plan, the assembly plant in Canada will stop production for two weeks, and the assembly plant in Toluca, Mexico will suspend production throughout April. Filosa said the company is "continuing to evaluate the medium- and long-term impact of tariffs on operations."

Hang Seng Index, ASX200, Nikkei 225: Fed Fear Weighed on Sentiment

Alice Wang

Mar 02, 2023 16:08

Market Overview

It was a bearish morning for the Asian markets, with the Hang Seng Index giving up some gains from the China PMI-fueled rally.


Economic indicators from the US and hawkish Fed chatter hit investor risk sentiment this morning. In February, the US ISM Manufacturing PMI continued to reflect a contraction across the sector.


However, sub-components of the report pointed to a pickup in inflationary pressure, weighing on riskier assets.


The ISM Manufacturing PMI increased from 47.4 to 47.7 in February. While the continued contraction across the manufacturing sector was bearish, the inflation sub-component showed further evidence of sticky inflation.


In February, the ISM Manufacturing Prices Index jumped from 44.5 to 51.3 versus a forecasted 45.1. Hawkish Fed commentary also fueled Fed Fear, with Fed Dove Neel Kashkari talking about being open to a 50-basis point rate in March.


The NASDAQ Composite Index and the S&P 500 responded to the stats and the Kashkari comments, falling by 0.86% and 0.47%, respectively. The Dow avoided the red, eking out a 0.02% gain.

Looking Ahead

This morning, the US Futures had a mixed session. The Dow mini was up 69 points, while the NASDAQ mini was down 54.75 points, reflecting investor uncertainty ahead of the US session.


It is a relatively busy day on the US economic calendar. US jobless claims, unit labor costs, and nonfarm productivity numbers will be in focus. While nonfarm productivity numbers will draw interest, the jobless claims and unit labor costs will likely have more influence.


A further decline in initial jobless claims, a jump in labor costs, and hawkish Fed chatter would further fuel market bets of a more hawkish Fed monetary policy outlook. FOMC member Waller will speak after today’s stats. Investors will want to know how high the Fed will be willing to go.


However, following the PMI numbers from China, today’s losses were modest considering the US inflation numbers, Fed commentary, and today’s stats.

ASX 200

The ASX 200 was down 0.02%. Disappointing building approval figures failed to spook investors. In January, building approvals tumbled by 27.6%, reversing a 15.3% increase from December. Economists forecast a more modest 8.0% decline. The numbers reflected the effects of RBA monetary policy on the housing sector.


Mining stocks continued to move northwards. Rio Tinto (RIO) and BHP Group Ltd (BHP) were up by 3.75% and 3.61%, respectively, with Fortescue Metals Group (FMG) gaining 3.80%. Newcrest Mining (NCM) trailed, rising by 1.56%.


Oil stocks were also on the move. Woodside Energy Group (WDS) and Santos Ltd (STO) saw gains of 1.60% and 0.57%, respectively. WTI Crude and Brent Crude gains delivered support, with Brent Crude up 0.07% to $84.37 this morning.


However, Bank stocks continued to struggle. ANZ Group (ANZ) and Westpac Banking Corp (WBC) slid by 2.18% and 1.81%, respectively. Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) saw losses of 1.21% and 1.11%, respectively.

Hang Seng Index

The Hang Seng was down 0.40% this morning as investors shifted attention to the US economic calendar and the Fed. There were no stats from China or HK to influence sentiment this morning.


However, HK retail sales numbers for January will be out after today’s market close.


Looking at the main components of the Index, Tencent Holdings Ltd (HK:0700) was down 1.57%, with Alibaba Group Holding Ltd (HK:9988) sliding by 4.46%.


However, it was a mixed morning for banking stocks. HSBC Holdings PLC fell by 0.16%, while China Construction Bank (HK: 0939) and Industrial and Commercial Bank of China (HK:1398) saw gains of 1.01% and 0.25%, respectively.


CNOOC (HK: 0883) found support from the upswing in crude oil prices, rising by 0.36%.