In the week ending October 18, the Hang Seng Index extended its losses from the previous week, falling 2.11% despite Friday’s rally of 3.61%.
Stocks from the technology and real estate sectors pushed the index into negative territory. The Hang Seng Tech Index (HSTECH) fell 2.86% in the week ended October 18, while the Hang Seng Mainland Properties Index (HMPI) fell 2.46%.
Key tech stocks that ended the week in the red included Baidu (9888), which fell 7.62%, while Alibaba (9988) fell 5.01%.
In the real estate sector, Shimao Group Holdings Ltd. fell. (0813) with 15.12%, while Agile Group Holdings Ltd. (3383) fell by 16.22%.
On the mainland, the CSI 300 advanced 0.98%, while the Shanghai Composite ended the week down 1.36%. Friday’s economic data from China and hopes for further stimulus measures led to a recovery.
Commodity markets: iron ore spot and gold
Concerns about the Chinese economy impacted spot iron ore prices, which fell 5.02% this week.
Gold, on the other hand, gained 2.41% to reach a record high of $2,723. Geopolitical tensions in the Middle East and investors’ hopes for multiple Fed rate cuts in the fourth quarter of 2024 boosted demand for gold.
ASX 200 gains thanks to Fed optimism
The ASX 200 rose 0.84% in the week ending October 18. Expectations for multiple Fed rate cuts in the fourth quarter of 2024 boosted demand for rate-sensitive ASX 200-listed shares.
Gold-related stocks led the gains, with Northern Star Resources Ltd. (NST) rose 6.95% and spot gold prices followed higher.
Australian bank shares rose as investors strengthened their bets on multiple Fed rate cuts. Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) posted gains of 5.32% and 5.10% respectively. Australian bank shares attract investor interest during monetary policy easing cycles due to their higher dividend yields.
However, falling iron ore prices continued to impact mining stocks. BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) fell by 3.15% and 1.64% respectively.
Nikkei index falls despite weaker yen
In the week ending October 18, the Nikkei index fell 1.58%. The USD/JPY failed to stimulate demand for Nikkei Index-listed stocks, despite rising 0.25% to 149.447 at the end of the week.
Notable price moves included Tokyo Electron (8035), which fell 8.27%, while Sony Group Corp. (6758) fell by 3.68% for the week.
Outlook
Investors should remain alert following shifting market sentiment on Chinese stimulus measures. New stimulus measures aimed at domestic consumption could boost demand for riskier assets.
Meanwhile, conflict in the Middle East, Bank of Japan chatter and sentiment on the Fed’s rate path also require attention. Stay up to date with our latest news and analysis to manage positions in the Asian stock markets.