KGI Asia Commentary
HSI fell 101 points on Wednesday
The Hang Seng Index fell 101 points or 0.6% to 17,568 on Wednesday. HSTECH fell 35 points or 0.9% to 4,020 and HSCEI fell 47 points or 0.8% to 6,039. Daily market turnover was HK$94.14bn.
Dow closes lower, ending winning streak
The Dow Jones Industrial Average ended lower on Wednesday, ending a seven-day winning streak, as investors paused bullish bets on stocks amid ongoing quarterly corporate earnings and remarks from Federal Reserve officials. The Dow Jones Industrial Average fell 0.1%, or 40 points, while the S&P 500 and Nasdaq closed up 0.1%, both extending their gains. Utilities and energy stocks were among the biggest losers, with the latter feeling pressured by falling oil prices on concerns about weakening global energy demand. In addition to demand concerns, an unexpected surge in U.S. crude stockpiles has added to worries about a demand slowdown. Shares of Robinhood Markets Inc. fell 14% after the online brokerage reported mixed quarterly results, with lower trading activity and lower revenue than expected due to fewer users on its trading platform. The company said it expected trading activity to be subdued in November and December given the holidays. Meanwhile, e-commerce platform eBay shares fell 2% after the company reported third-quarter results that topped Wall Street expectations but forecast sales in the key holiday quarter to be lower than expected. Roblox Inc reported a lower-than-expected third-quarter loss, and the online gaming platform said it would start providing guidance next year. The company's shares closed up 11%. About 88% of the companies in the index announced results, and more than 88% of them exceeded profit expectations. Slowing demand, however, has translated to only 62% topping revenue expectations, and some companies are cautious about the outlook.
Powell didn't offer many clues about future policy
Federal Reserve Chairman Jerome Powell gave no clues about future monetary policy in a speech at a conference on Wednesday. However, Federal Reserve Governor Lisa Cook said geopolitical tensions could change the U.S. economic outlook. Rising global geopolitical tensions could exacerbate already sluggish economic growth in Europe and China, with spillover effects that could change the path of the U.S. economy.
Hong Kong Stock Connect had a net outflow of HK$1.35bn on Wednesday, of which SMIC (981) had the largest net inflow, reaching HK$0.18bn; followed by Xiaomi (1810). Tracker Fund (2800) recorded the largest net outflow at HK$1.6bn, followed by CSOP HS TECH (3033).
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