KGI Asia Commentary
HSI fell 328 points on Friday
The Hang Seng Index opened 83 points lower on Friday, at 19,135 points, and extended its decline to 328 points or 1.7% throughout the day, to 18,890 points; The H-Share Index fell 111 points, or 1.7%, to 6,394 point; the Hang Seng Technology Index fell 82 points, or 2.1%, to 3,879 point. The market turnover was HK$ 69.8 bn. Hong Kong stocks continued to trade at range-bound, EV stocks suffered setbacks, Xpeng (9868), Nio (9866) and Li Auto (2015) fell 9%, 6.6% and 2.9% respectively. Procurement results of Chinese medicines were released, and the prices of selected Chinese medicines fell by 50%, related stock plunged, Sino Biopharm (1177) fell by 7.2%。
Three major U.S. indexes snap multi-week rallies
The three major U.S. indexes all closed down. The Dow Jones index fell 219 points, or 0.65%, to 33,727 point; the Nasdaq index fell 138 points, or 1.01%, to 13,493 point; the S&P 500 index fell 34 points, a drop of 0.77%, at 4,348 point. The weekly performance recorded a decline, ending a multi-week rally. Investors are still assessing the Fed's monetary policy outlook after Powell took a hawkish stance last week.
After Powell said last week that interest rates will be raised twice in the future and that interest rates will not be cut in the short term, investors’ concern about the US and global economic recession. However, U.S. Treasury Secretary Janet Yellen said on Thursday that the risk of a U.S. recession is reducing, but slowdown in consumer spending to curb inflation should be expected. In addition, the market is worried that the Fed's continued interest rate hikes will continue to suppress crude oil demand, and WTI crude oil futures fell 3.9% for the week.
Dragon Boat Festival holiday ends
The Dragon Boat Festival holiday has just ended. The Ministry of Transport stated that about 140 million people travelled this year during the first Dragon Boat Festival holiday after the epidemic, an increase of 89.1% over the same period in 2022, continuing the momentum of the "Golden Week" travel. Ctrip (9961) announced that during the Dragon Boat Festival, domestic ticket sales and other orders have doubled compared to the same period in 2019. It reflects still have a strong desire to travel during the long holidays.
Hong Kong Stock Connect was closed on Friday due to the Dragon Boat Festival holiday and will resume 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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