KGI Asia Commentary

HSI rose 101 points on Friday

The Hang Seng Index opened 112 points higher last Friday, opening at 20,061 points, and rose 101 points or 0.5% to 20,049 points throughout the day; the China Enterprises Index rose 79 points or 1.2% to 6,798 points; the Hang Seng Technology Index rose 40 points or 1%, at 3,896 points. The market turnover was HK$ 98.3 bn. Mainland banking stocks continued to perform well last Friday, Bank of China (3988) and Agricultural Bank of China (1288) both rose nearly 1%. As for technology stocks, NIO (9866) and Xpeng Motors (9868) both rose nearly 4%.

Regional bank stocks stopped falling and rebounded, non-farm payrolls beat expectations

Last Friday, U.S. stocks closed higher. The Dow Jones index rose 547 points, or 1.7%, to 33,674 points; the Nasdaq index rose 269 points, or 2.3%, to 12,235 points; the S&P 500 index rose 75 points, an increase of 1.9 percent to 4,136 points. Bank stocks in the U.S. region stopped falling and rebounded. After Apple (AAPL) announced its results, its stock price rose 4.7%.

On the economic data front, non-farm payrolls at 253,000 in April beat expectation and the unemployment rate also fell to 3.4%, which was lower than expected and the previous value, thus reducing market expectations for the Fed to cut interest rates. Short-dated Treasury yields, which are most sensitive to changes in the Fed's policy rate, rose the most. The 2-year yield rose as much as 15 basis points at one point. The 10-year Treasury yield rose nearly 6 basis points.

The Chinese State Council passed the accelerated promotion of new energy vehicles to the countryside

During the executive meeting of the Chinese State Council chaired by Chinese Premier Li Qiang, passed on accelerating the development of advanced manufacturing. The first industry benefit from the proposal is the new energy vehicle industry, pointing out that it will speed up the construction of charging infrastructure and support the development of new energy vehicles in the countryside. The meeting also pointed out that enterprises need to be guided to expand sales and service networks, it is also recommended that educational institutions train maintenance technicians in rural areas to promote the healthy development of the rural new energy vehicle market.

Hong Kong Stock Connect had a net outflow of HK$ 980 million on Friday, of which Bank of China (3988) had the largest net inflow of HK$540 million, followed by Meituan (3690). China Construction Bank (939) recorded the largest net outflow of HK$1.23 billion, followed by Tracker Fund (2800).