KGI Asia Commentary

Hang Seng Index fell 17 points on Friday

Last Friday, the Hang Seng Index opened 88 points lower, at 16,655 points. The decline for the day narrowed to 17 points, or 0.1%, to 16,725 points; the H-Share Index rose 7 points, or 0.1%, to 5,765 points; the Hang Seng Technology Index fell 10 points, or 0.3% at 3,399 points. The total daily turnover of the market was HK$96 billion. Lenovo (992) was downplayed by brokerages after its results, and its stock price fell 3.3%. On the other hand, the share price of Ctrip (9961) continued to perform well, rose 3%. Standard Chartered (2888) rose 3.7% to HK$62.4 after the results were announced.

The official continues to speak

U.S. stocks closed higher on Friday. The Dow Jones index rose 62.42 points, or 0.16%, to 39131.53 points; the Nasdaq index fell 44.80 points, or 0.28%, to 15996.82 points; the S&P 500 index rose 1.77 points, or 0.03%, reported at 5088.80 points. All three major stock indexes recorded gains last week, with the Dow rising 1.3%, the S&P 500 rising 1.66%, and the Nasdaq rising 1.4%. In terms of individual stocks, the rise continued after NVIDIA announced its results. The stock price reached a new high, reaching a maximum of US$823.9, and the market value once exceeded US$2 trillion.

The recent market focus is still on the direction of the Federal Reserve's monetary policy. New York Fed President John Williams said on Friday that the overall economy and inflation are still generally moving in the right direction unless the economy encounters unexpected events. Otherwise, he believes that it is a reasonable decision for the Federal Reserve to withdraw its restrictive monetary policy later this year, but the road to falling inflation back to the Federal Reserve's 2% inflation target may be slightly bumpy.

Market expectations for interest rate cuts continue to cool

For the market expectations, JPMorgan Chase raised its forecast for U.S. Treasury bond interest rates, raising the 2-year bond interest rate from 3.25% to 3.8% and the 10-year bond interest rate from 3.65% to 3.8% to reflect a longer than expected quantitative tightening cycle. Current Fedwatch data reflects that there is only a 52% chance of a rate cut and a 33% chance of keeping interest rates unchanged in June.

Hong Kong Stock Connect saw a net inflow of HK$6.45 billion on Friday, of which Tracker Fund (2800) had the largest inflow, reaching HK$2.06 billion; followed by China National Offshore Oil Corporation (883). Industrial and Commercial Bank of China (1398) recorded the largest net outflow of HK$166 million; followed by Lenovo (992).