KGI Asia Commentary
HSI fell 305 points on Wednesday
The Hang Seng Index fell 305 points or 1.6% to 19,110 on Wednesday. HSTECH fell 57 points or 1.4% to 4,016 and HSCEI fell 123 points or 1.9% to 6,489. Daily market turnover was HK$86.8bn.
Dow slips as Fed minutes point to more rate hikes ahead
The Dow ended lower on Wednesday as the minutes of the Federal Reserve's June meeting showed further willingness to resume raising interest rates, but large technology stocks generally rose, as Meta will launch a new apps Threads to challenge Twitter, and its stock price soared to a 52-week high. The Dow Jones Industrial Average fell 0.38%, or 129 points, the Nasdaq lost 0.2%, and the S&P 500 lost 0.2%. Shares of General Motors rose more than 1% after reporting second-quarter new vehicle sales rose nearly 19% from a year earlier and 15% during the quarter, driven by rising demand for electric vehicles.
Fed Minutes Signal More Fed Hikes Ahead
Minutes of the Federal Reserve's June meeting, released on Wednesday, showed “almost all” members supported a resumption of rate hikes at a future meeting as inflation remained "unacceptably high." The minutes also showed signs of a hawkish tilt among Fed members, with some favoring a rate hike rather than a pause at the June meeting, suggesting a "very tight" labor market that could push up wages and inflation. “Many [officials] also noted that, after rapidly tightening the stance of monetary policy last year, the Committee had slowed the pace of tightening and that a further moderation in the pace of policy firming was appropriate in order to provide additional time to observe the effects of cumulative tightening and assess their implications for policy,” the minutes said. Data on Wednesday morning showed factory orders fell short of expectations in May. Later in the week, investors will focus on a series of employment and wage data for an indication of the strength of the labor market.
Hong Kong Stock Connect had a net inflow of HK$9.24bn on Thursday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$4.36bn; followed by HSCEI ETF (2828). CCB (939) recorded the largest net outflow at HK$0.18bn, followed by Tencent (700).
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