KGI Asia Commentary
HSI rose 366 points on Thursday
The Hang Seng Index rose 366 points or 2.1% to 18,212 on Thursday. HSTECH rose 149 points or 3.7% to 4,158 and HSCEI rose 150 points or 2.5% to 6,267. Daily market turnover was HK$101.5bn.
Dow falls more than 300 points
Stocks fell sharply on Thursday after a tech rally sparked by Nvidia's stronger-than-expected earnings was short-lived. Traders are also looking forward to a key speech from Federal Reserve Chairman Jerome Powell. The Dow Jones Industrial Average fell 373.56 points, or 1.08%, to 34,099.42. The S&P 500 fell 1.35% to close at 4,376.31. The Nasdaq Composite Index, which is dominated by technology stocks, fell 1.87% to close at 13463.97 points. Shares of Nvidia hit an all-time high after the company reported quarterly earnings and revenue that beat analysts' high expectations. The company also raised its guidance, with executives expecting revenue to climb to $16 billion in the third quarter, up 170% from a year earlier. However, the stock closed up just 0.1%. Dollar Tree was the worst performer on the S&P 500, falling 12% on disappointing third-quarter guidance. Nike shares fell 1.1%, extending a record losing streak. Airplane maker Boeing fell more than 4% after it said it would delay deliveries of its 737 MAX jets due to new flaws discovered in the plane. Shares of Autodesk rose more than 2 percent after it posted upbeat guidance as the company reported second-quarter results that topped expectations amid strong demand for design software.
New signs suggest labor market remains strong
The number of initial jobless claims fell more than expected last week, fueling persistent concerns about a tight labor market and the threat of rising wages. Initial jobless claims fell to 230,000, the lowest level in three weeks, also above expectations for 240,000.
Two Fed officials accept rising bond yields for now
Separate interviews were conducted with Philadelphia Fed President Harker and Boston Fed President Susan Collins. Harker told CNBC in an interview that rising long-term borrowing costs "helps cool the economy some," Rising yields are not a major concern, but he is monitoring, he said. Meanwhile, Collins said on Yahoo Finance's video channel that the rise in yields is "absolutely fits in" with the broader story around the economy and monetary policy. "I think it's helpful that the higher longer rates are consistent with an understanding that this is going to take some time" on the part of the Fed to get inflation back down to the 2% target.
Hong Kong Stock Connect had a net inflow of HK$4.4bn on Thursday, of which Meituan (3690) had the largest net inflow, reaching HK$9.1bn; followed by Kuaishou (1024). Easy Buy (1797) recorded the largest net outflow at HK$0.16bn, followed by Innovent Bio(1801).
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