KGI Asia Commentary
Hang Seng Index fell 203 points on Thursday
The Hang Seng Index fell 203 points or 1.3% to 15,878 on Thursday. HSTECH fell 22 points or 0.7% to 3,168 and HSCEI fell 61 points or 1.1% to 5,360. Daily market turnover was HK$77.7bn.
S&P 500 closes at record high, briefly touching 5,000 for first time
The S&P 500 closed at a record high for a second day in a row on Thursday, briefly touching an unprecedented 5,000 before the bell as soaring shares of Disney and ARM kept bulls going. The S&P 500 index edged up 0.06% to close at 4,997.91 points, having hit a high of 5,000.40 points at the close. The Dow Jones Industrial Average rose 48.97 points, or 0.13%, to close at 38,726.33 points; the Nasdaq Index rose 0.24% to close at 15,793.71 points. Strong earnings, along with continued gains in Big Tech stocks, have boosted the market in recent sessions. Meanwhile, Disney shares rose more than 11% after the media and entertainment company reported better-than-expected first-quarter earnings, raised its quarterly dividend by 50% and announced a $3 billion stock buyback plan. Chip design company Arm Holdings rose 48% after its current-quarter guidance exceeded Wall Street expectations. The optimistic guidance was driven by strong demand for its chip design led by artificial intelligence. PayPal Holdings shares fell 11%, leading losses across the financial sector, as the company's weak forecast offset a quarterly earnings beat that beat expectations. Ralph Lauren shares rose more than 16% as the apparel maker's better-than-expected quarterly results prompted a series of upgrades on Wall Street.
The labor market continues to show strength
The number of Americans filing initial claims for unemployment benefits fell by 9,000 to 218,000 in the week ended February 3, consistent with a series of recent data showing that the job market remains strong. Recent strength in the labor market could push up wages and inflation, clouding investor expectations for a sharp interest rate cut by the Federal Reserve this year. Richmond Fed president Tom Barkin acknowledged on Thursday that "robust" economic growth and a strong and tight job market have given the Fed time to delay the start of the "process of toggling rates down."
Hong Kong Stock Connect had a net outflow of HK$4.59bn on Thursday, of which Meituan (3690) had the largest net inflow, reaching HK$0.52bn; followed by China Mobile (941). ICBC (1398) recorded the largest net outflow at HK$0.04bn, followed by Tencent (700).
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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