KGI Asia Commentary
Hang Seng Index fell 619 points on Monday
The Hang Seng Index opened 109 points lower yesterday and then continued to decline. HSI closed at a near day-low level and closed at 22,069, down 619 points or 2.7%. HSTECH closed at 4,580, down 233 points or 4.8%. HSCEI fell 277 points, or 3.6%, to 7,496. Market turnover was HK203.3bn. Chinese tech stocks led the market down today, Alibaba (9988) and Tencent (0700) fell 7.1% and 6.7% respectively. The market concerned that Baidu (9888) may launch an AI chat robot service next month. The stock price once rose 3.1%, but still fell 0.6% when market closed.
EU economic figure in Jan beats consensus
EU economic outlook seems bottoming out after a sharp drop in energy costs. The European Commission announced that the economic sentiment index rose from 97.1 to 99.9 in January, beating market expectations to 97 and hitting a seven-month high since June 2022. In January, the industrial prosperity index was revised up from -0.6 to +1.3, beating market expectations and rising to -0.9 as well. On top of the decreased energy cost, China, as the largest trading partner of the EU, have rebounded in demand that benefit to European industrial producers.
The three major U.S. stock indexes fell on Monday, with the Nasdaq down 227 points or 1.96% to 11,393, the S&P 500 down 52 points or 1.30% to 4,017. The Dow Jones down 260 points or 0.77% to 33,717 point.
More China cities lowered interest rates to accelerate market recovery
A Chinese research institution announced that during the Chinese New Year period, the transaction volume of new homes in many focused cities did not perform as expected. Today, 2 more cities launched a stimulus policy. Zhengzhou local banks first-home loan interest rate has dropped to 3.8%, and the loan rate of Tianjin has dropped to 3.9%. It is expected that interest rates in various cities will continue to be adjusted downwards to accelerate the recovery of the real estate market.
Hong Kong Stock Connect had a net outflow of HK$3.7bn on Monday, of which Meituan (3690) had the largest net inflow of HK$839mn, followed by China Mobile (0941). Tencent (0700) recorded the largest net outflow of HK$3.69bn; followed by HKEX (0388).
Southbound trading of Hong Kong Stock Connect will resume today.
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