KGI Asia Commentary
Hang Seng Index fell 208 points on Thursday
The Hang Seng Index fell 208 points or 1.3% to 16,230 on Thursday. HSTECH fell 53 points or 1.6% to 3,359 and HSCEI fell 59 points or 1.0% to 5,614. Daily market turnover was HK$98bn.
Nasdaq rises 1.5%, hits record high
The S&P 500 closed at a record high on Thursday, led by technology stocks, and Federal Reserve Chairman Jerome Powell reiterated that he may cut interest rates this year, adding to investor optimism that global central banks are expected to begin easing monetary policy measures in June. The S&P 500 rose 1.03% to 5,157.36 points, while the tech-heavy Nasdaq rose 1.51% to 16,273.38 points. Both major stock indexes hit record highs during the session, and the S&P 500 also hit a closing record. The Dow Jones Industrial Average rose 130.30 points, or 0.34%, to close at 38,791.35 points. Information technology and communications services stocks led the S&P 500 higher. Intel was the best performer on the Dow, rising more than 3%. The European Central Bank cut its annual inflation and economic growth forecasts on Thursday, boosting investor optimism, but it also kept key interest rates unchanged. This can be seen as a positive sign in terms of international inflation. The ECB announcement came after Federal Reserve Chairman Jerome Powell told Congress on Wednesday that he expected interest rates to fall this year. Nvidia shares rose more than 4% and closed at a record high, pushing the technology sector overall higher, as the chipmaker continues to benefit from optimism that the artificial intelligence revolution will stimulate demand for chips. Like Nvidia, Micron is in rebound mode, rising more than 3%. Shares of Kroger rose nearly 10% after the food retailer forecast annual sales and profits largely above Wall Street forecasts as more Americans stay at home amid persistent inflation. cooking, the demand for groceries in its outlets increased.
Powell reiterates rate-cuts ahead
While Powell said the Fed wasn't ready to start cutting interest rates immediately, he told the Senate Banking Committee on Thursday that the Fed isn’t far from having the confidence it needs on inflation to start. At the same time, the number of people filing for unemployment benefits in the United States remained unchanged last week at 217,000, further showing signs of a slowdown in the job market, while the important non-farm payrolls report will be released the next day.
Hong Kong Stock Connect had a net inflow of HK4.49bn on Thursday, of which CNOOC(883) had the largest net inflow, reaching HK$0.95bn; followed by BOC (3988). PetroChina (857) recorded the largest net outflow at HK$0.37bn, 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.