KGI Asia Commentary
HSI rose 135 points on Wednesday
The Hang Seng Index rose 135 points or 0.8% to 16,463 on Tuesday. HSTECH rose 64 points or 1.8% to 3,747 and HSCEI rose 54 points or 1.0% to 5,663. Daily market turnover was HK$98.8bn.
S&P 500 falls for third day in a row as recent rebound momentum weakens
U.S. stocks ended lower on Wednesday, extending a weak start to the week, even as signs of a further slowdown in the job market boosted hopes that the Federal Reserve will soon cut interest rates. The Dow Jones Industrial Average fell 70.13 points, or 0.19%, to close at 36,054.43 points. The S&P 500 fell 0.39% to 4,549.34 points, and the Nasdaq fell 0.58% to 14,146.71 points. It was the third consecutive day of losses for the Dow and S&P. Markets got a boost in early trading following the release of economic data. Falling labor costs are beneficial to controlling inflation, while rising productivity indicates that the economy may avoid recession. November private employment data released by ADP provided the latest sign that the job market is cooling. The job market has long been seen as a pain point for the Fed. In corporate news, Campbell Soup shares rose more than 7% after the company on Wednesday reported a better-than-expected quarterly profit, benefiting from higher prices for its packaged foods and snacks, which helped offset slowing demand from cost-conscious consumers. Brown Forman shares fell more than 10% as the company cut its 2024 net sales forecast as cost-conscious consumers in the U.S. look for cheaper alternatives to more expensive brands. Cloud services provider Box reported disappointing third-quarter results, sending the company's shares down 10%.
Private job gains slow in November
Data from payroll processor ADP showed that U.S. private employment opportunities increased by only 103,000 last month, down from a revised 106,000 in October. Economists had expected employment to increase by 130,000. The data came a day after job openings fell to their lowest level in more than two years in October, signaling a slowdown in the job market that could force the Federal Reserve to cut interest rates as soon as early next year. Initial jobless claims and non-farm payrolls data will be released on Thursday and Friday respectively.
Hong Kong Stock Connect had a net inflow of HK$5.61bn on Wednesday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$1.87bn; followed by CSOP HS TECH (3033). Tencent (700) recorded the largest net outflow at HK$0.33bn, followed by Wuxi Bio (2269).
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