KGI Asia Commentary

Hang Seng Index fell 373 points on Friday

The Hang Seng Index opened 116 points lower on Friday, at 16,979 points. The index's full-day decline expanded to 373 points, or 2.2%, to 16,722 points; the HSCEI Index fell 124 points, or 2.1%, to 5,879 points; the Hang Seng Technology Index fell 64 points, or 1.8 %, reported 3,474 points. The total market turnover for the whole day was HK$106.2 billion. Gold-related stocks continued to rally, with Zijin Mining (2899) and Shandong Gold (1787) rising 0.4% and 3.9%. Fast Retailing (6288) raised its full-year guidance, but its stock price still fell 3.1%.

Geopolitics risk heats up, SP500 VIX index rises

U.S. stocks closed lower on Friday. The Dow Jones index fell 475.84 points, or 1.24%, to 37983.24 points; the Nasdaq index fell 267.10 points or 1.62%, to 16175.09 points; the S&P 500 index fell 75.65 points, or 1.46%, reported 5123.41 points. Last week, all three major U.S. stock indexes posted losses for the second consecutive week. The Dow fell 2.37% over the week, the Nasdaq fell 0.45%, and the S&P 500 fell 1.56%.

The new quarterly results period for the U.S. stock market has begun again. On Friday, JPMorgan Chase, Citigroup, Wells Fargo and BlackRock all announced results that were better than market expectations. However, the CEOs of these large banks expressed concerns about inflation. Among them, BlackRock CEO Larry Fink said that it will be difficult for U.S. inflation to fall back to 2%. He predicts that the Federal Reserve will cut interest rates up to two times this year, but even so it will be difficult to suppress inflation; while JPMorgan Chase CEO Jamie Dimon said that he will continue to Inflationary pressures are weighing on the economy.

In addition, in addition to the earnings period, Iran launched drone and missile attacks on Israel, and geopolitical tensions in the Middle East also affected the volatility of global markets. Last Friday, the market's risk aversion sentiment increased. The U.S. stock VIX index rose 2.4 points to 17.31.

Social financing in March was better than market expectations

China's social financing increase in March was RMB 4.87 trillion, better than market expectations of RMB4.7 trillion, of which the increase in RMB loans to the real economy was RMB 3.29 trillion, better than the 3 trillion expected by Wind analysts. Although RMB loans to the real economy have declined year-on-year, we need to take into account the high base brought about by the optimistic market situation after the epidemic prevention and control was lifted in the same period last year. The data is still higher than the level in 2022. We believe that as long as the data is at Range fluctuations in 2023 and 2022 are still acceptable.

Hong Kong Stock Connect saw a net inflow of HK$6.145 billion on Friday, of which Bank of China (3988) had the largest inflow, reaching HK$386 million; followed by China Mobile (941). Anta (2020) recorded the largest net outflow of HK$155 million; followed by Li Auto (2015).