KGI Asia Commentary
HSI rose 227 points on Friday
The Hang Seng Index opened 221 points lower on Friday at 19,418 points. The full-day index rose to 277 points, or 1.4%, to 19,916 point; the China Enterprises Index rose 138 points, or 2.1%, to 6,808 point; the Hang Seng Technology Index rose 125 points, or 2.9 %, at 4,466 point. The market's full-day turnover was HK$ 137.7 bn. Evergrande Vehicle (708) resumed trading last friday, and its share price fell 61% to HK$1.24. Standard Chartered (2888) rose 3.9% to HK$74.5 after the results. On the other hand, sporting goods stocks performed well, Li Ning (2331) and Anta (2020) rose 7% and 2.7% respectively.
Core PCE data slows further
The three major U.S. stock indexes all rose on Friday. The Dow Jones index closed up 177 points, or 0.50%, to 35,459 point; the Nasdaq index rose 267 points, or 1.90%, to 14,317 point; the S&P 500 index rose 45 points, up 0.99% to 4,582 point. The financial reports of US stocks continue to be the focus of the market. So far, the performance of consumer goods giants such as Procter & Gamble and Ford Motor have exceeded market expectations.
On the economic data front, the Federal Reserve's heavily weighted indicator, personal consumption expenditures (PCE) figures were released on Friday, and the June data showed signs of further cooling in inflation. The core PCE rose 4.1% year-on-year, below market expectations of 4.2%, and the lowest level since September 2021. In addition, according to the U.S. quarterly labor cost index, the quarterly rate rose by 1%, which was also lower than the market expectation of 1.1%, recording the lowest growth rate in more than a year, reflecting that the U.S. labor market may be gradually cooling down.
Following the Politburo meeting, relevant departments start to show confidence
After the Politburo meeting was held last Monday to set the tone for China's development in the second half of this year, relevant departments have also actively released relevant news recently. For example, the National Development and Reform Commission held a meeting on Sunday (30th) to arrange key tasks for the second half of the year, including six key points, such as increasing the intensity of macro-policy regulation, promoting consumption and investment, and supporting the real economy, etc. On the other hand, in terms of home purchase policies, some first-tier cities have spoken out one after another, and follow-up policies are expected to be introduced.
Hong Kong Stock Connect had a net inflow of HK$ 7.31 bn on Friday. Hang Seng China Enterprises (2828) had the largest inflow, reaching HK$ 1.71 bn; followed by Meituan (3690). East Buy (1797) recorded the largest net outflow of HK$320 mn; 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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