Australia, China lead gains in mixed Asia trading; U.S. futures steady ahead of Jackson Hole

Asian markets showed mixed performance, with technology stocks recovering slightly and Japan's Nikkei 225 index declining for the third consecutive session, highlighting ongoing uncertainties in Japan's monetary policy.

Australia experienced a stock market surge to record levels driven by robust business activity data, with notable increases in the manufacturing and services PMIs, while inflation expectations eased to a five-month low.

In India, manufacturing and services sectors showed strong growth, with the HSBC Manufacturing PMI rising and the country moving forward with negotiations for a Free Trade Agreement with the Eurasian Economic Union.

Geopolitical tensions remain a concern, as Russia warned against Western efforts to negotiate security guarantees for Ukraine without its involvement, while China filed a complaint against Canada at the WTO over trade tariffs.

Market Trend Analysis: Mixed Signals Across Asia and Promising Data from Australia

On Thursday, Asian markets exhibited a mixed performance, with technology stocks beginning to recover from previous declines. In Australia, the stock market surged to record levels, buoyed by robust business activity data released for August.

From a geopolitical perspective, Russia warned that any efforts to resolve security concerns about Ukraine without its participation would lead to deadlock, sending a signal to Western nations as they consider security guarantees for Kyiv in a post-conflict scenario.

In commodities, silver was priced at approximately $37.8 per ounce, holding firm after a notable rise of more than 1% in the prior session. Meanwhile, gold prices remained stable, trading around $3,340 per ounce on Thursday.

Japanese markets experienced declines, with the Nikkei 225 index dropping 0.68% to close below 42,800, while the Topix index fell by 0.15% to 3,094. This marks the third consecutive session of losses for Japanese equities. The Japanese yen retraced to about 147.5 per dollar, reversing a two-day recovery amidst ongoing uncertainty regarding the Bank of Japan's monetary policy direction.

Economic indicators from Japan revealed a slight uptick in the S&P Global Manufacturing PMI, which rose to 49.9 in August from July's final reading of 48.9, surpassing market forecasts. Conversely, the Services PMI declined to 52.7 from July’s five-month high of 53.6. Japan's composite PMI saw a modest increase, rising to 51.9 in August from 51.6 in the previous month.

In China, the Shanghai Composite Index remained relatively unchanged, hovering at decade-high levels while investors awaited new triggers to sustain the upward momentum. Despite ongoing trade tensions with the U.S., Chinese equities continued to attract investment as the government imposed measures to limit excessive competition. On the trade front, China lodged a complaint against Canada at the World Trade Organization regarding added tariffs and quotas on steel and aluminum.

Hong Kong's Hang Seng Index dipped by 0.22%, settling near 25,174 after a slight gain earlier in the week. In contrast, the Sensex in India gained 0.42%, reflecting positive sentiment.

India's HSBC Manufacturing PMI rose to 59.8 in August from a final reading of 59.1 in July, also exceeding predictions. The Services PMI increased to 65.6 from July's 60.5, while the composite PMI surged to an unprecedented 65.2 from 61.1. Furthermore, India and the Eurasian Economic Union finalized their terms of reference to initiate negotiations for a Free Trade Agreement.

Australian shares climbed by 0.94%, reaching 8,969, thus extending gains from the previous session as investors responded enthusiastically to strong PMI figures. However, the Australian dollar depreciated to below $0.642, continuing its downward trend for four consecutive sessions, marking its lowest value in three weeks. The manufacturing sector in Australia demonstrated robust growth, with the S&P Global Manufacturing PMI increasing to 52.9 in August from July's 51.3. The Services PMI saw an increase to 55.1 from 54.1, reflecting the fastest expansion in 40 months. The composite PMI also continued its upward trajectory, reaching 54.9, the highest since April 2022.

Notably, consumer inflation expectations in Australia eased to a five-month low of 3.9% in August from July's 4.7%, indicating a reduction in price pressures.

In the United States on Wednesday, major stock indexes primarily closed lower as investors processed the minutes from the recent FOMC meeting, which suggested a hawkish stance given the ongoing inflation concerns. Technology shares also continued to face headwinds due to apprehensions about their high valuations and the durability of the AI-driven market rally.

Investors are now looking forward to a speech by Fed Chair Jerome Powell at the upcoming Jackson Hole symposium, which is expected to provide insights on prospective rate cuts. Other key upcoming economic indicators include weekly jobless claims, existing home sales, and earnings reports from major corporations like Walmart and Workday.

On Thursday, U.S. stock futures remained steady following a technology-led decline on Wall Street, showing minimal changes: Dow -0.15%; S&P 500 -0.08%; Nasdaq -0.01%.

In summary, the data and developments across various Asian markets suggest cautious optimism amid geopolitical tensions and mixed economic indicators, particularly with strong signals from Australia and India.