The Hang Seng was steady on Wednesday as South Korea’s government called a no-confidence vote. Turmoil in the country has not spread to other indices.
HK50 – Daily Chart
The price of HK50 is hovering below 20,000 and that will be the target by the end of the week. Previous resistance lies at 21,000 ahead of the January 2023 high of 22,719.
US employment numbers from ADP failed to dent the S&P 500 on Wednesday. After surging 233k higher in October (the largest jump since July 2023), expectations were for a slowdown in November to 150k. The reality was much worse with the previous number downgraded to 184k and November’s coming in lower at 146k.
“While overall growth for the month was healthy, industry performance was mixed,” said Nela Richardson, Chief Economist at ADP.
“Manufacturing was the weakest we’ve seen since spring. Financial services and leisure and hospitality were also soft”.
The attention now turns to Friday’s NFP payrolls data, which could confirm the ADP weakness. That could be a reason to avoid being too long into the weekend on stocks as the number is released late Friday in Hong Kong. After more record highs in US markets this week, there could be a correction ahead.
US markets were awaiting a speech from Federal Reserve Chair Jerome Powell which will come ahead of the Asian session on Thursday. “The Fed has been quite clear up until now in their signaling, so if they were going to pause Powell might give some signals because they won’t want to surprise the market,” said Guy Miller, chief strategist at Zurich Insurance. “But I do think they will cut by 25 basis points this month,” he added.
In Korea, Yoon Suk Yeol now faces an impeachment proceeding after the shortest period of martial law in history. The President had the support of only 25% of voters after various personal scandals.
The Won has since stabilised and there was no risk of contagion across other Asian markets. Chinese stocks eased by 0.42% on the day after China’s services activity expanded at a slower pace in November, due to easing new business growth. Stocks in the country are giving up some of the recent gains which have led to two-week highs.
However, losses were limited after the People’s Bank of China extended its support for the yuan by setting its daily reference rate higher.
