Hang Seng Index, ASX 200, Nikkei 225: ASX 200 Leads as Stats shine

US Tech Sector Rally Falters on Monday

The US equity markets had a mixed session on Monday, June 24. The Nasdaq Composite Index and S&P 500 saw losses of 1.09% and 0.31%, respectively. However, the Dow bucked the trend, advancing by 0.67%.

NVIDIA Corp. (NVDA) slid by 6.68% to $118.11, extending its losing streak to three sessions. The Monday sell-off left NVDA down $500 billion in market cap since Thursday, June 20. NVDA sent the Nasdaq to a Thursday high of 17,937 before a pullback to below 17,500.

Is the tech sector heading for a gloomy patch?

On Tuesday, June 25, US futures signaled a mixed session. The Dow mini and Nasdaq mini were up by 33 and 15 points, respectively, while the S&P 500 mini was down by 2.

China Stimulus Doubts Impact Mainland China Stocks

Mainland bucked the broader Asian market trend on Tuesday. The lack of stimulus measures to bolster the economy likely affected buyer demand for Mainland China-listed stocks.

Associate Professor of Economics at the London School of Economics had this to say about the Chinese economy,

“China’s economy is still in recovery mode and is also in transition, so everything is just going to take time. Let’s not forget that, first of all, China was the last to exit the pandemic lockdowns and Chinese households never got the kind of stimulus packages, government support that most other countries, especially in the US, the UK had. […]. The second is the transition to, let’s say less quantity, higher quality. Going for tech, innovation. You know, think about the government stimulus package. Why are they kind of holding off? What is financial stability? Let’s not repeat what happened after 2009.”

Keyu Jin went on to say,

“But guess what, that’s not going to replace real estate in terms of contribution to growth, employment, and all of that. So, China has to kind of feel the short-term pain for maybe the longer-term gains in productivity. But, I personally feel that there’s a cyclical problem here in China, which is an enormous aggregate demand deficit. You kind of need to give the right medicine to the right problem. […]. This lack of demand, you need to give a big stimulus package.”

However, views about the chances of a stimulus package vary.

Last week, founder and managing director of Z-Ben Advisers Peter Alexander spoke on Bloomberg Television, saying,

“What has it been, the past year or so, where you’ll have people on that are always talking about the need for China to have this bazooka of fiscal stimulus? You know, China did that in 2008/9, and it led to some pretty disastrous long-term effects. They don’t want to do that again.”

Extended delays to stimulus measures to bolster the real estate market and support the Chinese economy in transition could further affect buyer demand for Mainland-listed stocks.

Hang Seng Index Advances Despite Real Estate Sector Woes

The Hang Seng Index advanced by 0.61% on Tuesday, June 25. However, the real estate and tech sectors limited the gains.

The Hang Seng Tech Index (HSTECH) and the Hang Seng Mainland Properties Index (HSMPI) saw losses of 0.14% and 0.11%, respectively.

Nevertheless, Alibaba (9988) and Baidu (9888) advanced by 0.49% and 0.06%, respectively, with Tencent (0700) gaining 0.92%.

The Mainland China markets suffered losses on Tuesday morning, with Shenzhen Composite and CSI 300 sliding by 1.55% and 0.54%, respectively.

Nikkei Gains as USD/JPY Hovers Below 160

The Nikkei Index rose by 0.06% Tuesday morning. USD/JPY strength contributed to the modest gains as investors monitored intervention-related chatter.

Softbank Group Corp (9984) and Tokyo Electron Ltd. (8035) reacted to overnight losses on the Nasdaq, sliding by 2.83% and 2.46%, respectively.

However, Sony Group Corporation (6758) advanced by 1.47%, with the financial sector countering tech sector losses. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) rallied 2.44% and 3.01%, respectively.

ASX 200 Heads North as Consumer Sentiment Brightens

The ASX 200 increased by 0.73% on Tuesday, tracking the Dow into positive territory. Better-than-expected Australian consumer confidence numbers brightened the mood. The Westpac Consumer Confidence Index unexpectedly increased by 1.7% to 83.6 in June. Economists expected a 0.1% decline to 82.0.

Banking, oil, and mining stocks contributed to the morning gains.

Commonwealth Bank of Australia (CBA) and National Australia Bank Ltd. (NAB) advanced by 0.95% and 1.45%, respectively.

Mining giants BHP Group Ltd (BHP) and Rio Tinto Group Ltd. (RIO) saw gains of 0.68% and 0.34%, respectively.

Rising crude oil prices fueled buyer demand for Woodside Energy Group Ltd (WDS) and Santos Ltd (STO), which rallied 2.52 and 1.53%, respectively.

However, gold-related stocks struggled, with Evolution Mining Ltd (EVN) sliding by 1.69%.

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