Asian markets traded mixed on Thursday, with Hong Kong leading gains and Japan, South Korea and Australia seeing losses. Global economic worries, rising US interest rates and Middle East tensions weighed on sentiment.
Hong Kong stocks experienced a sharp decline on Thursday, snapping a six-day winning streak as the momentum generated by China's stimulus measures appeared to ease. The Hang Seng Index closed 1.47% lower at 22,113.51, reversing its strong gains from Wednesday that had lifted it to its highest level since January 2023.
The Hang Seng Mainland Properties Index tumbled as much as 10% before recouping some of the losses, while the Hang Seng Tech Index dropped 3.46% to 4,978.64.
Mainland China markets remained closed until October 8, following a recent surge in Chinese stocks driven by a wave of support measures announced last week.
While Beijing is widely expected to unveil further fiscal policies and support measures in the coming months, Nomura's Chief China Economist Ting Lu cautioned that the "scale and content of the fiscal package might be quite improvised and uncertain." He advised investors to exercise "more sober assessment" amid the recent market frenzy.
Other Asian Markets
Despite the Hong Kong slump, most other Asian markets traded higher, with Japan's Nikkei 225 leading the gains, closing at 38,552.06 with a nearly 2% increase. The Topix added 1.2%, ending at 2,683.71.
The Japanese yen strengthened slightly to 146.42 against the US dollar, recovering from its largest single-day decline since June 2022. Japan's new Prime Minister, Shigeru Ishiba, stated that current economic conditions do not support another rate hike, following a meeting with Bank of Japan Governor Kazuo Ueda.
Global Economic Data
Thursday saw the release of key economic data across the globe. Australia's seasonally adjusted Judo Bank Composite PMI for September came in at 49.6, down from 51.7 in August, falling below the 50 neutral mark. The services PMI also declined from 52.5 to 50.5.
Australia's trade surplus for August reached AU$5.64 billion, higher than the estimated AU$5.5 billion but down from July's AU$6.01 billion. Both imported and exported goods contracted by 0.2% month-on-month.
Japan's au Jibun Bank composite final PMI for September, representing both manufacturing and service activities, stood at 52.0, indicating a slower expansion compared to August's 52.9. The service sector PMI also declined from 53.7 to 53.1.
Middle East Tensions
Middle East conflicts remain in focus this week, creating uncertainty in the region. Israel launched a ground operation into Lebanon and conducted more airstrikes, while Iran retaliated with a ballistic missile attack following the recent killing of Hezbollah leader Hassan Nasrallah.
US Markets
Overnight in the US, the three major indexes closed slightly higher as Middle East tensions weighed. The S&P 500 added 0.01% to close at 5,709.54, the Dow Jones Industrial Average gained roughly 39 points to close at 42,196.52, and the Nasdaq Composite added 0.08% to 17,925.12.
