KGI Asia Commentary
Hang Seng Index fell 1 point on Friday
The Hang Seng Index opened 63 points higher at 16,788 points on friday, the index weakened, the market close low 1 point, at 16,724 points; the HSCEI Index fell 11 points, or 0.2%, to 5,863 points; Hang Seng Technology The index fell 10 points, or 0.3%, to 3,451 points. The total daily turnover of the market was HK$73.6 billion. WuXi continued to be under pressure, with WuXi AppTec (2359) and WuXi Biologics (2269) falling 5.5% and 4.8% respectively.
U.S. March non-farm payroll data continues to be strong
U.S. stocks closed higher on Friday. The Dow Jones index rose 307.06 points, or 0.80%, to 38904.04 points; the Nasdaq index rose 199.44 points, or 1.24%, to 16248.52 points; the S&P 500 index rose 57.13 points, or 1.11 %, reported 5204.34 points. In terms of weekly performance, all three major U.S. stock indexes recorded losses, with the Dow Jones Industrial Average falling 2.27%, recording its worst weekly performance since 2024. The S&P 500 fell 0.95%. The Nasdaq fell 0.8%.
In terms of economic data, the latest non-farm payrolls in March increased by 303,000, which was higher than the expected 212,000 and higher than the 270,000 non-farm payrolls in February which was revised downwards. The unemployment rate fell slightly to 3.8% in March, in line with expectations, from the previous value of 3.9%. In terms of average wages, the year-on-year increase of 4.1% was in line with market expectations, and the month-on-month increase of 0.3% was also in line with expectations, but the monthly growth rate was still higher than the previous value of 0.2%. The data still show the current job market has not been cool-down. In addition to observing inflation data, the labor market condition is also one of the factors to consideration of rate change path. Strong data will provide the market with more room for discussing interest rate cuts.
More officials think it's still too early to consider rate cuts
Amid recent strong employment data and signs of rising inflation, more officials have indicated that this year's interest rate cut schedule may be further delayed. On Friday, Dallas Fed President Logan said current data showed that borrowing costs may not be as big a drag on the economy as previously thought, saying it was too early to consider cutting interest rates. According to FedWatch tool data, the chance of a one-cent rate cut in June has dropped to 46.1%.
Hong Kong Stock Connect was closed last Friday due to the holiday and will reopen today.
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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