KGI Asia Commentary
Hang Seng Index fell 105 points on Wednesday
The Hang Seng Index fell 105 points or 0.5% to 20,423 on Wednesday. HSTECH fell 57 points or 1.4% to 4,100 and HSCEI fell 92 points or 1.3% to 6,832. Daily market turnover was HK$114.6bn.
S&P 500 falls for fourth straight day
U.S. stocks ended lower on Wednesday, as the minutes of the Federal Reserve's February meeting increased expectations for further rate hikes to curb inflation. The Dow Jones Industrial Average fell 84.50 points, or 0.26%, to end at 33,045.09. The S&P 500 fell 0.16% to close at 3,991.05. Meanwhile, the Nasdaq Composite gained 0.13% to close at 11,507.07. Fed officials said at their latest meeting that there were signs that inflation was falling, but not enough to offset the need for further rate hikes, according to the minutes of the meeting released on Wednesday. Meanwhile, the picture on earnings has been mixed, with retailers continuing to be in the spotlight for investors. TJX Companies reported fourth-quarter earnings in line with expectations, with revenue topping estimates but guidance that fell short of Wall Street expectations, sending its shares down nearly 2%. In other news, chipmaker Intel Corp on Wednesday said it would cut its quarterly dividend by more than 65% to 12.5 cents from 36.5 cents, sending its shares lower. Earlier, the company implemented a wide range of cost-cutting measures.
Fed minutes reiterate hawkish stance on inflation
The Fed’s meeting minutes showed inflation remained “well above” the central bank’s 2% target, adding that the labor market is still “very tight, contributing to continuing upward pressures on wages and prices. “Participants noted that inflation data received over the past three months showed a welcome reduction in the monthly pace of price increases but stressed that substantially more evidence of progress across a broader range of prices would be required to be confident that inflation was on a sustained downward path,” the minutes said. The summary of the meeting reiterated that members believed that “ongoing” rate hikes will be necessary. The release of the minutes came after St. Louis Fed President James Bullard warned on Wednesday that the Fed's fight against inflation was far from over.
Hong Kong Stock Connect had a net inflow of HK$0.73bn on Wednesday, of which HSCEI ETF (2828) had the largest net inflow, reaching HK$0.30bn; followed by Great Wall Motor (2333). HKEX (388) recorded the largest net outflow at HK$0.16bn, followed by China Mobile (941).
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