The Hang Seng Index extended its losing streak to four weeks, falling 0.41%. Increasing odds of a Trump victory on November 5 and a defeat in the technology sector pushed the Hang Seng into negative territory.
US election polls showed Trump narrowing the gap with Kamala Harris, increasing the chances of Trump returning to the White House. Markets expect Trump to target Chinese goods with punitive tariffs, potentially impacting the economy.
The technology sector struggled alongside the Nasdaq, with the Hang Seng Tech Index (HSTECH) ending the week down 1.19%. Technology giants Alibaba (9988) and Tencent (0700) fell 0.37% and 0.36% respectively, while Baidu (9888) rose 1.49%.
Meanwhile, real estate stocks advanced on sentiment towards Chinese policy measures. The Hang Seng Mainland Properties Index (HMPI) rose 4.80%.
On the continent, fear of US tariffs overshadowed PMI figures and expectations for further policy announcements. The CSI 300 fell 1.68%, while the Shanghai Composite fell 0.84%.
Commodity markets: crude oil, iron ore and gold
Commodity markets had a mixed week. The amount of iron ore fell by 2.72% in the week. Gold also trended lower, falling 0.41% despite hitting an all-time high of $2,790.
However, WTI Crude ended the week higher as investors took into account the conflict in the Middle East.
ASX 200 extends last week’s losses
The ASX 200 fell 1.13% in the week ending November 1, after losing 0.87% from the previous week. Falling gold prices and lower Fed rate bets in December (before the US Jobs Report) impacted demand for shares listed on the ASX 200.
Demand for high-yield Australian bank shares fell as US government bond yields rose. National Australia Bank (NAB) and ANZ (ANZ) ended the week up 1.90% and 2.02% respectively.
Gold-related shares Northern Star Resources Ltd. (NST) fell by 3.88% due to the decline in gold prices.
Nikkei index makes progress amid political impasse
In the week ending November 1, the Nikkei index rose 0.37%. The outcome of Japan’s general election had an impact on demand for the Japanese yen, boosting Nikkei Index-listed stocks. The coalition of the Liberal Democratic Party (LDP) and Komeito failed to win a majority, raising doubts about interest rate increases by the Bank of Japan in the short term.
Despite the impact of the election outcome on the yen, an aggressive stance by the Bank of Japan supported demand for the yen, resulting in the Nikkei’s modest gain. The USD/JPY rose 0.45% this week.
Notable share price moves included SoftBank Group Corp. (9984), which rose 2.43% despite falling 5.62% on Friday. Nissan Motor Corp. (7201) gained 1.59%. However, Tokyo Electron (8035) fell 3.17%.
Outlook
Looking ahead, key events including the RBA interest rate decision, the US presidential election and the upcoming meeting of the Standing Committee of the National People’s Congress (NPCSC) will influence market risk sentiment.
Further stimulus from Beijing could fuel demand for riskier assets. However, the central bank’s aggressive stance and a Trump victory could overshadow Beijing’s policy measures.
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