KGI Asia Commentary
HSI rose 223 points on Thursday
The Hang Seng Index rose 223 points or 1.2% to 18,537 on Thursday. HSTECH rose 75 points or 1.9% to 3,947 and HSCEI rose 103 points or 1.6% to 6,560. Daily market turnover was HK$123.6bn.
Dow closes more than 300 points higher
U.S. stocks rose on Thursday, with the Dow rising for a seventh straight session, as new data on initial jobless claims revived hopes the Federal Reserve would cut interest rates later this year. The Dow Jones index rose 331.37 points to close at 39,387.76 points, an increase of 0.85%, setting a record for the longest consecutive rise since December last year for nine consecutive days of gains. The S&P 500 index rose 0.51% to close at 5214.08 points, and the Nasdaq index rose 0.27% to close at 16346.26 points. Home Depot and Caterpillar led the Dow higher, each rising more than 2%. Initial jobless claims rose to their highest level since August last week, raising expectations that the central bank may cut interest rates at some point this year. In addition to the unemployment data, strong demand at Thursday's Treasury bond auction pushed yields lower. The 10-year U.S. Treasury yield fell 3 basis points to around 4.45%, and the 2-year U.S. Treasury yield fell 3 basis points to around 4.81%. Earlier, a new batch of quarterly earnings reports came in below Wall Street expectations, temporarily dampening sentiment. Arm shares fell more than 2% as the company gave lackluster revenue guidance. Airbnb shares fell more than 6% as weak guidance overshadowed better-than-expected first-quarter results.
Weekly jobless claims jump to 231,000, highest since August last year
The U.S. Department of Labor announced on Thursday that the number of seasonally adjusted initial jobless claims for the week ended May 4 was 231,000, an increase of 22,000 from the previous week and higher than the 214,000 expected. This is the highest number of claims since August 26, 2023, a potential sign that the otherwise strong labor market is changing. The report also showed that the number of people applying for continuing claims increased by 17,000 from the previous week to 1.78 million. More people now expect the central bank to start lowering interest rates in September.
Hong Kong Stock Connect had a net inflow of HK4.17bn on Thursday, of which China Mobile (941) had the largest net inflow, reaching HK$0.24bn; followed by ICBC (1398). Tracker Fund (2800) recorded the largest net outflow at HK$4.7bn, followed by HSBC (5).
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