KGI Asia Commentary
Hang Seng Index rose 123 points on Friday
The Hang Seng Index rose 123 points or 0.8% to 16,353 on Friday. HSTECH rose 26 points or 0.8% to 3,385 and HSCEI rose 42 points or 0.8% to 5,656. Daily market turnover was HK$86.6bn.
Nasdaq drops 1% on Friday as Nvidia shares fall
The S&P 500 ended its two-week winning streak on Friday as Nvidia's record gains came to an abrupt halt and a mixed labor market report showed more jobs were created in February, but layoffs accelerated last month, the unemployment rate unexpectedly rose. The S&P 500 fell 0.65% to 5,123.69 and the Nasdaq fell 1.16% to 16,085.11. The Dow Jones Industrial Average fell 68.66 points, or 0.18%, to close at 38,722.69. While Nvidia weighed on technology stocks, Apple's stock price rose 1% on Friday. With the gains, the stock ended its longest losing streak since early 2022. But the stock still fell nearly 5% this week, making it the worst performer among the Dow stocks. Broadcom shares fell nearly 7% as investors noted that the semiconductor group did not raise its full-year guidance despite reporting better-than-expected first-quarter results, signaling concerns about the future. Marvell Technology shares fell 11% after the company's first-quarter guidance fell short of analysts' expectations, offsetting stronger-than-expected fourth-quarter guidance. Shares of Costco fell 7% after the big-box retailer reported lower-than-expected second-quarter revenue as consumer demand for pricier goods was hampered by a more cost-conscious approach. Meanwhile, fashion retailer Gap's fourth-quarter results beat expectations, sending its shares up more than 8% amid strong demand for improved products.
Employment report mixed
Data from the U.S. Department of Labor's Bureau of Labor Statistics showed that nonfarm payroll employment increased by 275,000 in February, up from a downwardly revised 229,000 in January. During the period, average hourly wages increased by 0.1% month-on-month, compared with expectations for an increase of 0.3%. However, the unemployment rate rose unexpectedly. The unemployment rate was 3.9%, compared with expectations of 3.7%. U.S. nonfarm payroll grew more than expected in February, but the unemployment rate rose to a two-year high, reinforcing market expectations that the Federal Reserve will cut interest rates in June, and both U.S. bond interest rates and the dollar fell.
Hong Kong Stock Connect had a net inflow of HK1.87bn on Friday, of which CNOOC (883) had the largest net inflow, reaching HK$0.80bn; followed by BOC (3988). Tracker Fund (2800) recorded the largest net outflow at HK$0.63bn, followed by CSOP HS TECH (3033).
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