KGI Asia Commentary

Hang Seng Index fell 424 points on Friday

The Hang Seng Index opened 291 points lower on Friday, opening at 17,947 points and closing at 17,813 points for the day, down 424 points or 2.3%. The Hang Seng Technology Index reported at 3,879 points, down 139 points or 3.4%. The H-Share Index fell 151 points, or 2.4%, to 6,116 points. The market turnover was HK$84.2 bn. Major banks are bearish on JD.com (9618), stock price fell 11% to HK$104.2, was the worst-performed blue chip stock. Other major technology stocks also closed lower, with Alibaba (9988) and Meituan (3690) both falling by more than 3%.

U.S. earning continues to be market focus

U.S. stocks ended mixed on Friday. The S&P 500 posted its second consecutive weekly gain this week. Traders are currently focused on the earnings reports of major banks and the situation between Palestine and Israel. The Dow Jones Index rose 39 points, or 0.12%, to 33,670 points; the Nasdaq fell 167 points, or 1.23%, to 13,407 points; the S&P 500 Index fell 22 points, or 0.50%, to 4,328 points. This week, the Dow rose 0.79%, the S&P 500 rose 0.45%, and the Nasdaq fell 0.18%. In the bond market, the U.S. 10-year Treasury bond yield fell 9 basis points to 4.621% on Friday.

In terms of economic data, the initial value of the University of Michigan's consumer confidence index in the United States in October was 63, lower than the expected 67 and the final value of 68.1 in September. On the other hand, the one-year inflation expectation is 3.8%, which is higher than the previous value and the expected 3.2%, and is a new high in the past five months. In addition to paying attention to the situation between Israel and Palestine, the U.S. stock market has entered its quarterly results period. Last Friday, JPMorgan Chase and Wells Fargo announced their results and exceeded market expectations, which helped boost the market. Well-known companies such as Goldman Sachs, J&J, and Tesla will announce quarterly results this week.

China's inflation fell back to 0% in September, core inflation remained at 0.8%

The National Bureau of Statistics announced China's Consumer Price Index (CPI) in September. The overall CPI fell back to 0% in September, which past record was 0.1% in August. The latest number was lower than the market expectation of 0.2%; its MoM increase was 0.2% low. 0.3% higher than market expectations. But in fact, China's core inflation has recorded a year-on-year increase of 0.8% for the third consecutive month, and has not been as pressured as headline inflation.

Hong Kong Stock Connect saw a net inflow of HK$4.017 bn on Friday, of which Tracker Fund (2800) had the largest inflow, reaching HK$1.08 bn; followed by CSOP Hang Seng Technology (3033). Industrial and Commercial Bank of China (1398) recorded the largest net outflow of HK$210 mn; followed by Kuaishou-W (1024).