KGI Asia Commentary
HSI fell 16 points on Wednesday
The Hang Seng Index fell 16 points or 0.1% to 18,009 on Wednesday. HSTECH fell 22 points or 0.6% to 4,041 and HSCEI fell 24 points or 0.4% to 6,235. Daily market turnover was HK$79.8bn.
Dow falls on Wednesday after August inflation report
The Dow Jones Industrial Average fell on Wednesday as traders digested higher-than-expected August core inflation data. The Dow Jones Industrial Average fell 70.46 points, or 0.20%, to 34,575.53 points, marking its second consecutive day of decline. Meanwhile, the S&P 500 rose 0.12% to 4,467.44. The Nasdaq Composite Index rose 0.29% to close at 13,813.59 points. 3M was the worst performer among the 30 Dow components, falling about 5.7%. Caterpillar shares fell 1.3%. Meanwhile, Apple shares fell more than 1%, falling for a second day in a row. On the other hand, gains in technology stocks helped boost the S&P 500 and Nasdaq. Tesla shares rose 1.4% as billionaire investor Ron Baron remained bullish on the electric car maker. Amazon shares hit their highest level since August 2022; the index rose more than 2.5%.
August’s core inflation slightly hotter than expected
The consumer price index (CPI) rose 3.7% in August, slightly higher than the forecast of 3.6%, as energy prices soared. The data increased by 0.6% month-on-month. At the same time, core CPI increased by 0.3% month-on-month and 4.3% year-on-year in August, compared with expectations of 0.2% and 4.3%. Fed officials have traditionally paid more attention to core data because it provides a better indication of the direction of long-term inflation. Wall Street has largely priced in expectations that the Federal Reserve will suspend interest rate hikes at next week's meeting. Fed funds futures pricing data as of Wednesday afternoon showed a 97% chance that rates would remain unchanged, according to CME Fed watch Tool. However, the International Energy Agency expects a "significant" shortage in the crude oil market in the fourth quarter of this year due to OPEC+ production cuts. The market is paying attention to the future development of inflation.
Hong Kong Stock Connect had a net outflow of HK$1.7bn on Wednesday, of which Country Garden (2007) had the largest net inflow, reaching HK$0.1bn; followed by Sino Ocean (3377). Tracker Fund (2800) recorded the largest net outflow at HK$2.17bn, followed by PetroChina (857).
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