KGI Asia Commentary
Hang Seng Index fell 25 points on Thursday
The Hang Seng Index fell 25 points or 0.15% to 16,429 on Thursday. HSTECH rose 5 points or 0.14% to 3,431 and HSCEI fell 10 points or 0.2% to 5,678. Daily market turnover was HK$130.3bn.
Nasdaq closes at first record high since 2021
The Nasdaq closed at a record high for the first time since 2021 on Thursday as an artificial intelligence-led rally continued and an inflation report in line with market expectations boosted hopes of a summer interest rate cut. The technology-heavy Nasdaq index rose 0.90% to close at a record high of 16,091.92 points, with technology and chip stocks rising at the close. The S&P 500 also surged to a record closing level, rising 0.52% to close at 5,096.27. The Dow Jones Industrial Average rose 0.12% to 38,996.39. The Nasdaq hit a record high as enthusiasm for artificial intelligence propelled a range of major tech stocks — and the broader market — through 2023 and into this year. The "Magnificent 7" including Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla lead the Nasdaq from 2022 It recovered from the turmoil of 2010, which was marred by rising interest rates and fears of a recession. Chip stocks were the standout performers in Thursday's rally, with AMD shares rising more than 9% and the VanEck Semiconductor ETF closing up 2.2%.
Fed's preferred inflation gauge meets economists' expectations
The overall PCE index increased by 0.3% month-on-month in January and 2.4% year-on-year. This was the smallest yoy increase since February 2021, compared with a 2.6% increase in December, easing investor concerns. U.S. Treasury yields fell on the news, but data showed personal income rose 1% from January, suggesting consumer spending is likely to continue. Another news is that the number of people filing for unemployment benefits increased by 13,000 in the week ended February 17, which was higher than market expectations for an increase of 8,000.
Hong Kong Stock Connect had a net inflow of HK1.36bn on Thursday, of which China Telecom (728) had the largest net inflow, reaching HK$0.13bn; followed by SMIC (981). Tencent (700) recorded the largest net outflow at HK$0.18bn, followed by China Shenhua (1088).
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