KGI Asia Commentary
Hang Seng Index rose 134 points on Thursday
The Hang Seng Index opened flat at 16,253 points, and then rose 134 points throughout the day to close at 16,386 points; the HSCEI Index rose 54 points, or 0.9%, to 5,804; the Hang Seng Technology Index rose 16 points, or 0.5%, to 3,357 points. The total daily turnover of the market was HK$95.3 billion. China National Building Materials (3323) issued a profit warning, and its share price fell 8.3% to HK$2.77. Insurance stocks performed well today, with Ping An Insurance (2318) and China Life (2628) rising 4.1% and 2.6% respectively. Anta (2020) announced that its first-quarter retail sales performance was as expected, and its stock price rose 4.1%.
IMF urges Asian countries to refrain from keeping monetary policies too close to the U.S. dollar
Asia's emerging currencies experienced greater volatility after the market began to reflect expectations that the Federal Reserve might not cut interest rates this year. For example, the Korean won, Vietnamese dong and Thai baht have fallen by an average of 2.7% against the US dollar in the past month, causing the market to worry that the rate spread between the US dollar and emerging market has widened further. The International Monetary Fund (IMF) urges Asian countries to consider their own economic conditions and avoid over-considering U.S. monetary policy, which can provide the price stability.
Among the three major U.S. stock indexes, only the DJIA recorded gains, rising 22 points or 0.06% to close at 37,775; the S&P 500 fell 11 points, or 0.22%, to close at 5,011; the Nasdaq composite fell 81 points, or 0.52%, to 15,601.
Bostic not expected to cut interest rates until at least the end of the year
Federal Reserve officials continue to release expectations to the market that they may not cut interest rates this year to suppress U.S. citizens' expectations for inflation. Atlanta Fed President Raphael Bostic (2024 FOMC voting committee) said that although inflation is falling toward the 2% target at this stage, the speed is too slow and it will take at least the end of this year to lower interest rates. He continued that the Federal Reserve still has tools to deal with inflation and is in no rush to adjust monetary policy. However, if inflation rebound , raising interest rates may be an option.
Hong Kong Stock Connect recorded a net inflow of HK$6.64bn on Tuesday, of which Tencent (0700) had the largest inflow, reaching HK$945mn; followed by Tracker Fund (2800). Meituan (3690) recorded the largest net outflow of HK$187mn, followed by PetroChina (0857).
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