KGI Asia Commentary
Hang Seng Index rose 489 points on Thursday
The Hang Seng Index rose 489 points or 2.6% to 19,350 on Thursday. HSTECH rose 155 points or 3.8% to 4,237 and HSCEI rose 165 points or 2.6% to 6,543. Daily market turnover was HK$111.3bn.
Stocks rise for fourth day on weak inflation data
Stocks rose on Thursday after another key inflation data came in below expectations. The S&P 500 rose 0.85% to 4,510.04 and the Dow Jones Industrial Average rose 47.71 points, or 0.14%, to 34,395.14. The Nasdaq Composite gained 1.58% to close at 14,138.57. Alphabet shares rose more than 4% after it launched Bard AI in Brazil and Europe. Meta platform companies are also riding the AI ride, with the social media giant set to release a commercial version of its AI large-scale learning model, which it made available to researchers and academics earlier this year. Shares of Amazon rose more than 2% after the company reported a 6.1% jump in U.S. online sales to $12.7 billion for its Prime Day sale. According to Amazon, 375 million items were sold worldwide during the two-day sales frenzy, making it the largest Prime Day event ever. PepsiCo reported better-than-expected second-quarter results and raised its overall outlook as higher prices helped offset higher input costs. Shares of the company closed up 1%. Delta Air Lines reported record quarterly results that topped Wall Street expectations, though sentiment on the stock cooled after the airline said capacity constraints are expected to remain in place for an "extended period." Wall Street's major banks have announced results. Three Wall Street banks, including Citigroup and Wells Fargo, are due to report quarterly results on Friday before U.S. markets open. The result will provide a further gauge of the stability of the banking sector after the turmoil earlier this spring. Aside from the earnings data, any signs of weakening deposit growth and credit conditions are likely to come into focus.
Inflation shows further signs of slowing, but job market remains tight
The PPI rose 0.1% month-on-month in June, missing expectations for a 0.2% increase. The core PPI, which strips out volatile food and energy prices, rose 0.1%, also missing expectations. Meanwhile, weekly data from the Labor Department on Thursday showed initial jobless claims fell to 237,000 for the week ended July 8, below market expectations of 250,000. PPI followed yesterday's CPI showing that inflation is cooling, but lower-than-expected initial jobless claims reminded the labor market remains tight.
Hong Kong Stock Connect had a net outflow of HK$0.32bn on Friday, of which Kuaishou (883) had the largest net inflow, reaching HK$0.48bn; followed by CNOOC (883). Tencent (700) recorded the largest net outflow at HK$0.40bn, followed by HSBC (5).
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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