KGI Asia Commentary
Hang Seng Index rose 323 points on Monday
The Hang Seng Index opened 204 points higher in the early session, opening at 18,283 points. The index closed at 18,403 points for the day, up 323 points or 1.8%. The Hang Seng Technology Index was at 3,784 points, up 93 points or 2.5%. The HSCEI Index rose 139 points, or 2.2%, to 6,532 points. The total market turnover for the whole day was HK$132.3 billion. Numbers of EV stocks announced May sales data, BYD (1211) and Li Auto (2015) rose 5% and 5.3% respectively. OEPC announced the extension of production cuts, and PetroChina (857) and CNOOC (883) rose 0.8% and 0.7% respectively.
EU manufacturing PMI stabilizes in May
The euro zone's manufacturing sector continued to improve. The final value of the S&P PMI in May was 47.3. Although the index is still below 50, the contraction rate has slowed down for the third consecutive month. The PMI output index rose to 49.3, also a 14-month high, indicating that production continues to stabilize. The PMI export index also declined, with the decline being the lowest since May 2022. It is noticed that that Germany is still the worst performer in the euro zone, with the final PMI value of 45.4, but it is also the highest level in four months.
Among the three major U.S. stock indexes, only the DJIA fell 115 points, or 0.30%, to close at 38,571; the Nasdaq composite rose 93 points, or 0.56%, to close at 16,828; the S&P 500 rose 5 points, or 0.11%, to close at 5,283.
US May ISM PMI weaker than expected
The Institute for Supply Management (ISM) announced that the May PMI was 48.7, lower than 49.2 last month, falling for the second consecutive month. It was also lower than the expected 49.6. Most of the components fell. Among them, the new orders index fell from 49.1 to 45.4, a decrease of 3.7 percentage points MoM. This was also the largest single-month decrease since June 2022. The orders index is now at its lowest level in a year. The employment index was 51.1, compared with 48.6 last month, reflecting that manufacturers have made greater progress in obtaining labor and labor market tensions have eased.
Hong Kong Stock Connect recorded a net inflow of HK$3.4bn on Monday. Among them, China Mobile (0941) had the largest net inflow, reaching HK$1.79bn; followed by China Hongqiao (1378). ICBC (1398) recorded the largest net outflow of HK$320mn; followed by China Telecom (0728).
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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