KGI Asia Commentary
Hang Seng Index fell 56 points on Tuesday
The Hang Seng Index fell 56 points or 0.3% to 21,331 on Tuesday. HSTECH fell 12 points or 0.3% to 4,558 and HSCEI fell 22 points or 0.3% to 7,263. Daily market turnover was HK$131.3bn.
U.S. stocks inched higher on Tuesday as optimism over cooling inflation drove investors into tech stocks
U.S. stocks rose on Tuesday as investors continued to build on a new year's rally while awaiting economic data and corporate earnings later in the week. The Dow Jones Industrial Average rose 186.45 points, or 0.56%, to 33,704.10. The S&P 500 gained 0.70% to close at 3,919.25. The Nasdaq Composite regained the lead among the major indexes, rising 1.01% to close at 10,742.63. It was the index's first three-day winning streak since November, as optimism over cooling inflation drove investors into battered technology stocks. Among the most volatile stocks, Virgin Orbit (VORB) fell 12.18% after its first launch out of the United Kingdom failed to reach orbit. Bed Bath & Beyond Inc (BBBY) posted a bigger-than-expected third-quarter loss, but its shares rose as much as 27% amid speculation that the company could become a potential takeover target. Coinbase Global (COIN) closed up 9.3% after it detailed plans to cut costs by 20% of its workforce.
Powell comments were not too hawkish at the central bank seminar in Sweden
Powell did not directly comment on the economic outlook and the direction of interest rates at a central bank seminar in Sweden. He merely noted that, amid high inflation, restoring price stability may require unpopular measures in the short term, suggesting continued rate hikes for some time to come. U.S. stocks rebounded slightly as Powell comments were not too hawkish. Powell on Tuesday stressed the need for the central bank to be free of political influence while tackling persistently high inflation. “Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy,” the chairman said.
Hong Kong Stock Connect had a net inflow of HK$6mn on Tuesday, of which China Edu Group (839) had the largest net inflow, reaching HK$0.49bn; followed by XiabuXiabu (520). Tencent (700) recorded the largest net outflow at HK$0.57bn, followed by Meituan (3690).
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.
The materials contained herein are provided by KGI Asia Limited ("KGI") for information only. While such materials are based on or derived from sources believed to be reliable, KGI makes no representation or warranty (express or implied) as to their accuracy or reliability. Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or solicitation of an offer to buy or sell any securities or investments. KGI and its officers, employees, agents and affiliates may have interests in the securities or investments covered herein and accept no liability whatsoever for any loss or consequence whatsoever (whether direct or indirect) resulting from any use of or reliance by you on such materials.