KGI Asia Commentary
HSI rose 114 points on Monday
The Hang Seng Index opened 381 points higher but narrowed its gains before mid-day. The HSI closed at 18,479 today, up 114 points or 0.6%. The HSTECH closed at 3,945, up 43 points or 1.1%. The HSCEI rose 36 points, or 0.6%, to 6,235. Market turnover was HK$78.3bn. Alibaba (9988) rose 3.2% in today, while other Chinese tech stocks rose between 1.7% and 4.1%. Automobile stocks performed individually. BYD (1211) rose 0.9%, while Geely Automobile (0175) fell 0.4%.
June U.S. CPI release soon; inflation expectations mixed
The market is now waiting for the June U.S. consumer price index released on Wednesday. Considering there will be a two-month gap between the July meeting and the next meeting, if the June CPI figures exceed consensus, especially the labor market figure was still strong, and the rate hike level in July may start at least 25bps.
In addition, US citizens' inflation expectations are currently mixed. A survey by the New York Federal Reserve showed that Americans in June expected the 1-year inflation increase to be the weakest in more than two years, which was 4.1% to 3.8%. Meanwhile, 5-year inflation expectation rose from 2.7% to 3.0%, widening the Fed's 2% long-term inflation target even further.
The three major US stock indexes all recorded gains yesterday. The DJIA rose 209 points or 0.62% to close at 33,944; the S&P 500 rose 10 points or 0.24% to close at 4,409; the Nasdaq Composite rose 24 points or 0.18% to close at 13,685.
June retail vehicle sales in line with expectation
According to data from CPCA, the retail sales of vehicles in June reached 1.89mn units, a MoM increase of 8.7%, higher than the previous estimate of 1.83mn units, and the monthly sales growth is accelerating. For new energy vehicles, retail sales in June were 665,000 units, up 14.7% MoM, slightly lower than the previous estimate of 670,000 units. It is expected that in July, due to the high base effect, there will be a chance of negative growth in YoY sales changes.
Hong Kong Stock Connect had a net outflow of HK$1.20bn on Monday, of which Kuaishou (1024) had the largest net inflow of HK$147mn; followed by Meituan (3690). Tencent (0700) recorded the largest net outflow of HK$643mn; followed by BYD (1211).
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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