Hang Seng Index, ASX 200, and Nikkei 225 in Focus: China Trade Data and RBA Decision

There were no economic statistics from the United States on Monday to impact market risk sentiment on Tuesday. FOMC voting member Lisa Cook remained silent on interest rate policy, keeping US equity markets largely steady on Monday.

The Nasdaq Composite Index rose 0.30% on Monday, while the Dow and S&P 500 gained 0.10% and 0.18%, respectively. Ten-year US Treasury rates increased by 1.64%, bringing markets back down after another positive day. While the preliminary US session may have an impact on Asian markets, the Asian economic calendar will most likely have a greater impact.

Investors will be watching Chinese trade statistics and the RBA’s interest rate announcement today. The trade numbers will have an impact on the ASX 200, Hang Seng Index, and Nikkei 225. Imports and exports are expected to shrink at a slower pace, according to economists. Recent manufacturing PMI readings revealed sluggish international demand, which may have an impact on October exports. 

However, reports that the Chinese government intends to increase imports in order to repair trade ties with important trading partners may mitigate the impact of any disappointing results. The RBA interest rate decision and rate announcement will have an impact on rate-sensitive stocks in the ASX 200. Economists anticipate a 25-basis point increase in the cash rate to 4.35%. Unless there is a surprise decision to hold interest rates, the rate statement will be the focus.

Wage growth and household expenditure will be the focus of the Nikkei 225 and the Bank of Japan. Another drop in consumer expenditure and weak wage growth would strengthen the Bank of Japan’s commitment to ultra-easy monetary policy. The ASX 200 and Nikkei were down 11 and 70 points, respectively, in the futures markets on Tuesday.

On Monday, the ASX 200 gained 0.27%. WBC gained 1.95% on better yearly profitability, a bigger dividend distribution, and share buyback plans. The National Australia Bank (NAB) increased by 0.96%, while the Commonwealth Bank of Australia (CBA) and ANZ Group Holdings Ltd. (ANZ) increased by 0.49% and 0.55%, respectively. This week, ANZ and NAB will also report profits.

Mining and oil stocks finished the day in the red. BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) both declined by 0.13% and 0.90%. FMG (Fortescue Metals Group Ltd.) fell 0.04%. Losses of 0.76% and 0.40% were recorded by Woodside Energy Group Ltd. (WDS) and Santos Ltd. (STO), respectively.

On Monday, gold stocks got more support. Northern Star Resources Ltd. (NST) and Evolution Mining Ltd. (EVN) both concluded the day up 5.13% and 3.18%, respectively. However, Gold Spot ended Monday in the red, suggesting a turnaround on Tuesday.

On Monday, the Hang Seng Index rose 1.71%. Demand for HSI-listed equities increased as the Chinese government pledged to increase imports in order to strengthen relations with trading partners. Tencent (0700) and Alibaba (9988) both gained 2.41% and 3.30%, respectively. Bank stocks had a mixed day on Monday. HSBC (0005) and China Construction Bank (0939) gained 0.60% and 0.22%, respectively. The share price of Industrial and Commercial Bank (1398) fell by 0.52%.

The Nikkei 225 gained 2.37% on Monday, with the Index also catching up after the market closed on Friday. Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group (8306) lost 1.95% and 1.89%, respectively. The stock of KIDDI Corp. (9433) increased by 4.87%. Tokyo Electron (8035) and Softbank (9984) gained 2.14% and 2.05%, respectively, on the day. Fast Retailing (9983) and Sony Corp both increased by 1.58% and 1.83%, respectively.

Risk disclaimer:

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.