KGI Asia Commentary
HSI rose 317 points on Tuesday
The Hang Seng Index rose 317 points or 1.9% to 16,828 on Tuesday. HSTECH rose 112 points or 3.4% to 3,449 and HSCEI rose 123 points or 2.1% to 5,954. Daily market turnover was HK$116.0bn.
S&P 500 gains 1% as strong earnings boost stocks
The S&P 500 index closed higher on Tuesday, rising for the second consecutive trading day, mainly supported by better-than-expected quarterly earnings. The top seven technology companies will begin to announce profits. Among them, Tesla will release its financial report after the close. The Dow Jones Industrial Average rose 263.71 points to close at 38,503.69 points, an increase of 0.69%. The S&P 500 rose 1.2% to close at 5,070.55 points, and the Nasdaq rose 1.59% to close at 15,696.64 points. Spotify shares soared 11.4% after beating Wall Street expectations in the first quarter and issuing upbeat second-quarter guidance. Shares of express delivery giant United Parcel Service rose 2.4% after the company reported earnings that beat expectations. GE Aerospace shares rose 8.3% after the company reported earnings that beat expectations. Earlier on Tuesday, shares of Swiss drugmaker Novartis rose 2% after it reported better-than-expected first-quarter results and later raised its full-year outlook. Soft drinks giant PepsiCo fell nearly 3% as sales slowed in the U.S. market. Tesla is scheduled to release its earnings report after the market opens on Wednesday, and the Meta platform will release its earnings report on Wednesday afternoon. On Thursday, Google parent Alphabet and Microsoft ushered in a tech-focused earnings week. As of Tuesday, about 20% of S&P 500 stocks had reported results. FactSet data shows that 76% of these companies exceeded analysts' expectations.
U.S. Treasury yields fall on weaker U.S. economic data
U.S. Treasury yields fell from recent highs as data showed manufacturing and services sector activity unexpectedly weakened in April. The S&P Global PMI Composite Output Index fell to 50.9 in April from 52.1 in March. Flash US Services Business Activity Index at 50.9 (March: 51.7), at 5-month low. Flash US Manufacturing Output Index at 51.1 (March: 54.0), at 3-month low. The data comes ahead of GDP and Friday's PCE index, an inflation gauge favored by the Fed that will provide more clues about interest rates.
Hong Kong Stock Connect had a net inflow of HK2.34bn on Tuesday, of which BOC (3988) had the largest net inflow, reaching HK$0.69bn; followed by HKEX (388). HSBC (5) recorded the largest net outflow at HK$0.56bn, followed by Meituan (3690).
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