KGI Asia Commentary
HSI fell 246 points on Thursday
The Hang Seng Index fell 246 points or 1.4% to 17,832 on Thursday. HSTECH fell 76 points or 1.8% to 4,049 and HSCEI fell 87 points or 1.4% to 6,116. Daily market turnover was HK$115.2bn.
Dow closes lower as Walmart slides
The Dow closed lower on Thursday, mainly due to a decline in Walmart and a series of economic data that were mostly weaker than expected, causing market concerns about the economy. The Dow Jones Industrial Average fell 45 points, or 0.1%, while the S&P 500 rose 0.1% and the Nasdaq Composite rose 0.1%. Walmart, the largest U.S. retailer, raised its annual guidance, forecasting adjusted earnings of $6.40 to $6.48 per share, but that missed estimates of $6.50 per share and offset quarterly results that beat expectations for both revenue and profit. Its shares fell more than 8%. Walmart Chief Financial Officer John David Rainey said consumers affected by inflation are continuing to put off larger purchases as they wait for promotional periods, echoing comments from retailer Target on Wednesday when it noted rising interest rates and dwindling savings. The pressure on consumers lingers. Meanwhile, department store chain Macy's shares rose 4% after the company reported better-than-expected third-quarter results and raised its full-year forecast. Cisco Systems shares fell nearly 10% after the company lowered its full-year revenue and profit forecast, signaling slowing demand for its networking equipment. Energy stocks fell more than 2% as oil prices fell below $73 a barrel on concerns about demand.
Weak economic data shifts focus to economic slowdown
Weak economic data, including a higher-than-expected number of jobless claims last week and a Philadelphia Fed index that was better than expected but still in contraction, stoked concerns about the pace of the economic slowdown. The Federal Reserve is expected to keep interest rates high for longer. Data released by the U.S. Department of Labor on Thursday showed that the number of people applying for unemployment benefits for the first time last week increased by 13,000 to 231,000. This figure was higher than market expectations of 220,000, while last week's figure was revised upwards by 1,000 from 217,000 to 218,000.
Hong Kong Stock Connect had a net outflow of HK$4.33bn Thursday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$2.27bn; followed by CSOP HS TECH (3033). Tencent (700) recorded the largest net outflow at HK$0.06bn, followed by Li Auto (2015).
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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