KGI Asia Commentary
HSI rose 682 points on Wednesday
The Hang Seng Index rose 682 points or 3.9% to 18,079 on Wednesday. HSTECH rose 174 points or 4.4% to 4,125 and HSCEI rose 239 points or 4.0% to 6,204. Daily market turnover was HK$134.9bn.
Dow closes higher as Target rebound lifts retailer shares
The Dow closed higher on Wednesday as data showed inflation continued to slow and Target Corp's third-quarter results beat expectations, pushing the retailer's shares higher. The S&P 500 index rose 0.16% to close at 4502.88 points, and the Nasdaq index edged up 0.07% to close at 14103.84 points. The Dow Jones Industrial Average rose 163.51 points, or 0.47%, to close at 34,991.21 points. Retail giant Target (TGT) reported better-than-expected profits and a smaller-than-expected same-store sales decline of 4.9%. The company's guidance for the fourth quarter was in line with expectations, and its stock price closed up nearly 18%. Tech stocks took a breather from a day earlier on weakness in the Meta platform, even as Microsoft unveiled its own AI chip, the Maia 100, expected to compete with Nvidia as demand for artificial intelligence hardware accelerates. As lawmakers sought to avert a government shutdown, the House of Representatives passed a bill late Tuesday that included a “laddered” continuing resolution. The measure will go to the Senate for a vote. If approved by lawmakers, the bill will be sent to President Biden. Without a funding bill, the federal government will shut down this weekend.
Inflation shows further signs of cooling
Producer prices fell to 1.3% in October from September's 2.2%, below the expectations of 1.9%, adding to optimism that slowing inflation will persist, a day after October's CPI showing a larger than expected slowdown. Optimism about a continued slowdown in inflation continues to support bets that the Fed's rate hike cycle is over, which could pave the way for a rate cut as early as the first half of next year. On the other side, retail sales fell 0.1% in October, stronger than the expected decline of 0.3%.
Hong Kong Stock Connect had a net outflow of HK$9.54bn on Wednesday, of which Kuaishou (1024) had the largest net inflow, reaching HK$0.20bn; followed by CNOOC (883). Tracker Fund (2800) recorded the largest net outflow at HK$4.3bn, followed by Tencent (700).
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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