KGI Asia Commentary
HSI fell 262 points on Wednesday
The Hang Seng Index fell 262 points or 1.48% to 17,467 on Tuesday. HSTECH fell 65 points or 1.7% to 3,817 and HSCEI fell 99 points or 1.6% to 6,030. Daily market turnover was HK$82.4bn.
Markets fall as interest rate scare extends October sell-off
U.S. stocks fell on Tuesday after the latest home sales and consumer confidence reports raised concerns about the state of the U.S. economy. The Dow Jones Industrial Average fell 388.00 points, or 1.14%, to 33,618.88 points, its worst day since March. The S&P 500 fell 1.47% to 4,273.53, closing below 4,300 for the first time since June 9. Meanwhile, the Nasdaq fell 1.57% to 13,063.61 points. Amazon's shares fell 4%, the biggest decliner among large technology stocks, after the U.S. Federal Trade Commission filed an antitrust lawsuit. The FTC alleged that the online retailer artificially raised prices to the detriment of competitors. JPMorgan Chase Chief Executive Jamie Dimon added to the bearish sentiment on Tuesday when he warned that further interest rate hikes may be needed to curb inflation. Bank stocks fell, with the SPDR S&P Regional Banks ETF (KRE) down more than 1%. Investors are also grappling with negotiations in Washington this week as lawmakers look to avoid a government shutdown that could occur as early as Oct. 1 if Congress cannot agree on a spending bill.
Economic worries return
New home sales in August were less than expected. Data from the U.S. Commerce Department showed that the total number of housing contracts in August was 675,000, down 8.7% from July. Economists had expected 695,000, a 2.7% drop from the unrevised July figure. Meanwhile, the Conference Board's consumer confidence index fell to 103 in September from 108.7 in August. Economists expected 105.5.
Hong Kong Stock Connect had a net outflow of HK$0.15bn on Tuesday, of which Tencent (700) had the largest net inflow, reaching HK$0.52bn; followed by Meituan (3690). Tracker Fund (2800) recorded the largest net outflow at HK$1.6bn, followed by CSOP HS TECH (3033).
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