KGI Asia Commentary

Hang Seng Index fell 361 points on Wednesday

The Hang Seng Index fell 361 points or 1.9% to 18,234 on Wednesday. HSTECH fell 75 points or 2.0% to 3,626 and HSCEI fell 120 points or 1.9% to 6,163. Daily market turnover was HK$170.9bn.

U.S. stocks fall as investors focus on House vote on debt ceiling

The Dow Jones Industrial Average slipped on Wednesday, dragged down by a plunge in consumer stocks led by retail and weakness in technology stocks as investors eagerly await the outcome of a key vote on the debt ceiling bill. Aside from the uncertainty over the passage of the debt ceiling bill, consumer stocks fell under pressure from Advance Auto Parts, also dragging the broader market lower. Auto parts retailer Advance Auto Parts Inc. slashed its quarterly dividend and reported quarterly results that missed Wall Street expectations, sending the stock down 35%. Shares of automakers including Ford Motor Co and General Motors Co, down more than 4 percent and 2 percent, respectively, also weighed on consumer stocks. In other earnings, Hewlett-Packard Co reported mixed quarterly results, with the company's shares falling more than 6% as revenue fell short of expectations, pressured by weak demand for PCs. Meanwhile, technology stocks took a breather from their recent climb as gains in artificial intelligence-driven chipmakers and other related stocks mostly lost steam. Nvidia fell more than 5%, C3 Ai Inc fell 9%, while Intel bucked the trend and rose nearly 5% as the chipmaker talked up the prospect of a turnaround and received a vote of confidence from Nvidia. Nvidia Chief Executive Jensen Huan said the company could source chips from Intel. Energy prices continued to slide this week, with oil falling further below $70 a barrel ahead of the upcoming OPEC+ meeting this weekend.

House advances debt-ceiling bill in 241-187 vote, with final vote expected soon

The U.S. House of Representatives voted 241-187 on Wednesday to pass a procedural measure related to a crucial debt-limit bill, putting the Republican-controlled chamber on track to pass the bill around 8:30 p.m. local time. 189 Republicans and 52 Democrats voted in favor of the procedural measure, while 29 Republicans and 158 Democrats voted against. Once the bill is approved by the House, it is expected to go to the Senate and then be signed into law by Biden. Yet obstacles remain.

Job vacancies unexpectedly rise in April

Job vacancies rose to the highest level since January in April. The latest Job Openings and Labor Turnover Surveys (JOLTs) report released Wednesday showed 10.1 million job vacancies at the end of April, up from 9.75 million in March. Economists polled by Bloomberg had expected 9.4 million job openings in April. The strong labor market data further suggested that continued strong economic data could prompt the Federal Reserve to raise interest rates again in June.

Hong Kong Stock Connect had a net inflow of HK$0.38bn on Tuesday, of which Meituan (3690) had the largest net inflow, reaching HK$0.64bn; followed by Tracker Fund (2800). CNOOC (883) recorded the largest net outflow at HK$0.63bn, followed by Tencent (700).