KGI Asia Commentary
Hang Seng Index fell 360 points on Friday
The Hang Seng Index opened 174 points lower at 17,604 points, the day's decline expanded to 360 points, or 2%, to 17,417 points on Friday; the HSCEI Index fell 142 points, or 2.2%, to 6,165 points; the Hang Seng Technology Index fell 76 points, or 2.1%, reported at 3,536 points. The total daily turnover of the market was HK$102 billion. Mainland Property developer and material stocks were generally under pressure. China Resources Land (1109) and Longfor (960) fell 5.7% and 5.9% respectively; China Hongqiao (1378) fell 5.9%.
Nasdaq continues to be under pressure
U.S. stocks closed lower on Friday. The Dow Jones index fell 377.49 points, or 0.93%, to 40287.53 points; the Nasdaq index fell 144.28 points, or 0.81%, to 17726.94 points; the S&P 500 index fell 39.59 points, or 0.71 points. %, reported at 5505.00 points. Last week, the Dow rose 0.72%, the Nasdaq fell 3.65%, and the S&P 500 fell 1.96%. For individual stocks, a major cyber security incident occurred in the Internet security software company CrowdStrike last Friday, causing some computers worldwide to enter a reboot cycle, causing service interruptions for some airlines, banks and financial services. The negative news caused CrowdStrike's stock price to fall 11.1%. In addition, the market continues to focus on sector rotation, US stock market earnings reports and the possibility of the Federal Reserve cutting interest rates in September.
In terms of the Fed's policy outlook, although the market has mostly expected an interest rate cut in September, the market will still pay attention to Powell's speech after the interest rate meeting in July to further confirm whether the Fed officials' confidence in cutting interest rates is consistent with the market expectation.
Current US President Biden withdraw from the next presidential election
Over the weekend, current US President Biden announced his drop out of the 2024 US presidential election and will focus on completing his presidential responsibilities during his term. In fact, Biden's performance in previous election debates has already caused the market to question whether Biden is qualified to be president. Biden's withdrawal decision might be the best outcome for the Democratic Party, but for the market, the competition between the new Democratic presidential candidate and Trump will bring uncertainty to the market.
Hong Kong Stock Connect saw a net inflow of HK$6.12 billion on Friday, of which Tracker Fund (2800) had the largest inflow, reaching HK$1.13 billion; followed by Tencent (700). Hong Kong Stock Exchange (388) recorded the largest net outflow of HK$138 million; followed by China Hongqiao (1378).
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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