KGI Asia Commentary
HSI fell 10 points on Wednesday
The Hang Seng Index fell 10 points or 0.1% to 17,101 on Wednesday. HSTECH fell 6 points or 0.2% to 3,752 and HSCEI fell 2 points or 0.0% to 5,859. Daily market turnover was HK$67.97bn.
Dow closes up more than 200 points after FOMC meeting
U.S. stocks rebounded Wednesday from a slump of the past three months. The Federal Reserve held interest rates steady for the second time in a row, leading investors to believe the central bank will keep rates on hold for the rest of the year. The Dow Jones Industrial Average rose 221.71 points, or 0.67%, to 33,274.58 points. The S&P 500 rose 1.05% to 4,237.86, briefly crossing its 200-day moving average. The Nasdaq rose 1.64% to 13,061.47 points.
ADP payrolls lower than expected, but JOLTS more than expected, ahead of Friday’s key report
ADP private sector payrolls in October were lower than expected but still stronger than September. However, job openings at JOLTS in September exceeded economists' expectations. U.S. job openings unexpectedly climbed for a second consecutive month in September, underscoring continued strong demand for labor across all sectors of the U.S. economy. The U.S. Bureau of Labor Statistics' Job Openings and Labor Turnover Survey released on Wednesday showed that the number of job openings increased to 9.6 million from a downwardly revised 9.5 million in August. Friday's jobs report will provide the Federal Reserve and investors with the latest detailed data on labor market conditions.
Fed holds rates steady
Federal Reserve members unanimously agreed to maintain the federal funds rate at a target range of 5.25%-5.5%. The central bank also said “economic activity expanded at a strong pace in the third quarter.” In previous remarks, it noted the economy was growing at a “solid pace.” Bond yields fell after the interest rate decision and after the Treasury shared its bond sale plans, boosting equities. The 10-year U.S. bond yield fell below 4.8% on Wednesday, while the 2-year bond yield fell below 5%.
Hong Kong Stock Connect had a net inflow of HK$2.23bn on Wednesday, of which SMIC (981) had the largest net inflow, reaching HK$0.30bn; followed by Xiaomi (1810). Tencent (700) recorded the largest net outflow at HK$0.34bn, followed by Haidilao (6862).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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