KGI Asia Commentary
Hang Seng Index fell 180 points on Tuesday
The Hang Seng Index fell 180 points or 1.1% to 16,991 on Tuesday. HSTECH fell 39 points or 1.1% to 3,622 and HSCEI fell 72 points or 1.2% to 5,799. Daily market turnover was HK$89.9bn.
Dow closes higher, corporate earnings beat expectations
The Dow closed higher on Tuesday, as a series of better-than-expected corporate earnings and solid U.S. Treasury yields boosted sentiment ahead of earnings reports from major technology companies. The Dow Jones Industrial Average rose 204 points, or 0.6%; the Nasdaq rose 0.9%; and the S&P 500 rose 0.7%. Technology stocks extended gains from the previous day as investors looked ahead to quarterly results from Microsoft and Google after the close. Coca-Cola Co. shares rose nearly 3% after the company reported better-than-expected quarterly results and raised its annual outlook. General Electric Co. also raised its full-year forecast, with the company's profit and revenue beating Wall Street expectations. The group also said it plans to spin off its renewable energy business GE Vernova in the second quarter of next year. 3M Co. sidestepped recent legal troubles and reported a third-quarter report that beat analysts' expectations, sending its shares up more than 5%.
Corporate and economic data remain resilient
About 23% of companies in the S&P 500 have reported results, with 77% of them beating analyst expectations, according to FactSet. Meanwhile, U.S. private sector economic activity continued to expand modestly in early October, with the S&P Global Composite PMI rising to 51 from 50.2 in September. The manufacturing PMI rose slightly to 50 from 49.8 in the same period, and the services PMI rose to 50.9 from 50.1. Both figures were higher than analysts' expectations.
Hong Kong Stock Connect had a net inflow of HK$2.32bn on Tuesday, of which Meituan (3690) had the largest net inflow, reaching HK$0.75bn; followed by SMIC (981). Tracker Fund (2800) recorded the largest net outflow at HK$0.99bn, followed by CSOP HS TECH (3033).
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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