KGI Asia Commentary
Hang Seng Index rose 514 points on Wednesday
The Hang Seng Index rose 514 points or 2.9% to 18,430 on Wednesday. HSTECH rose 135 points or 3.7% to 3,832 and HSCEI rose 219 points or 3.4% to 6,587. Daily market turnover was HK$112.7bn.
China Reform Holdings, a subsidiary of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, announced that its subsidiary Guoxin Investment has subscribed to the first batch of CSI Guoxin Stock Connect SOE Premium Index ETFs issued by fund companies. This is the second time Guoxin Investment has purchased an SOE-themed ETF after it subscribed to the CSI Guoxin SOE Science and Technology Index ETF on 1 December last year.
European stocks close slightly lower
U.S. financial markets were closed for the holiday. European stocks ended lower on Wednesday, losing the positive momentum from the previous session. The pan-European Stoxx 600 index closed down 0.18%, with various exchanges and sectors performing differently. Technology stocks led the decline, falling 1.15%, while mining stocks rose 0.65%. UK inflation rose by 2.0% year-on-year in May, hitting the Bank of England's target ahead of Thursday's policy rate decision. The Bank of England is widely expected to keep interest rates steady at 5.25%, with most economists expecting a rate cut in August.
Several Fed officials urge patience on rate cuts
"I will need to observe a period of favorable inflation, moderating demand and expanding supply before becoming confident that a reduction in the target range for the federal funds rate is appropriate. These conditions could take months, and more likely quarters to play out," Musalem said. It is his first public comments on monetary policy since becoming head of the regional Fed bank.
Hong Kong Stock Connect had a net inflow of HK2.36bn on Wednesday, of which BOC (3988) had the largest net inflow, reaching HK$0.57bn; followed by ICBC (1398). Tracker Fund (2800) recorded the largest net outflow at HK$0.33bn, followed by Bilibili (9626).
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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