KGI Asia Commentary

Hang Seng Index rose 433 points on Friday

The Hang Seng Index opened 176 points higher on Friday to 17,406 points, rising 433 points, or 2.5%, to 17,664 points throughout the day. The H-Share Index rose 141 points, or 2.4%, to 6,052 points. The Hang Seng Stock Index rose 124 points, or 3.3%, to 3,937 points. The total daily turnover of the market was HK$90.9 billion. New World Development(17) the general meeting of shareholders approved the sale of NWS shares, and the stock price rose 3.9%. In addition, Sino Biopharm (1177) rose by more than 8%, Link (823) continued to rise by more than 3%, and Hong Kong Broadband (1310) rose by more than 18%.

U.S. employment data falls short of market expectations

U.S. stocks closed higher on Friday. The Dow Jones index rose 222 points, or 0.66%, to 34,061 points; the Nasdaq index rose 184 points, or 1.38%, to 13,478 points; the S&P 500 index rose 41 points, or 0.94%, reported 4,358 points. All three major stock indexes rose more than 5% this week. The Dow posted its biggest weekly gain in a year. The Dow rose 5.07% last week, recording its largest weekly gain since October 2022.

In terms of individual stocks, Apple, one of the market's focus stocks, reported that its fourth-quarter revenue and earnings exceeded expectations, but overall sales fell for the fourth consecutive month. In addition, the company also issued weak revenue guidance, and the stock price fell 0.5%.

In terms of economic data, last Friday the United States announced that non-farm employment increased by 150,000 in October, which was lower than the market forecast of 180,000; the previous non-farm employment in September was revised down to 29.7 from the last announced 0.336mn of people. The unemployment rate rose from 3.8% to 3.9%, and the average hourly wage increase in October slowed to 0.2% from 0.3% in September.

U.S. jobs data fuels bets on Fed not raising interest rates

The latest jobs data is likely to reinforce financial market expectations that the Fed's current rate hike cycle is complete. The market pointed to the continued slowdown in wage growth as an argument for the Fed to abandon its tightening bias. After the release of non-farm payrolls data, traders' expectations for the first U.S. interest rate cut were advanced from July to June.

The net inflow of Hong Kong Stock Connect on Friday was 1.158 billion yuan, of which Kuaishou-W (1024) had the largest inflow, reaching HK$365 million; followed by Tencent Holdings (700). China Mobile (941) recorded the largest net outflow of HK$194 million, followed by CNOOC (883).