KGI Asia Commentary

Hang Seng Index fell 11 points on Friday

Hong Kong stocks opened slightly higher by 27 points on Friday, opening at 16,373 points. After rising as much as 118 points, the Hang Seng Index fell 11 points, or 0.1%, to 16,334 points throughout the day. The H-Share Index fell 18 points, or 0.3%, to 5,598 points; the Hang Seng Technology Index fell 14 points, or 0.4%, to 3,706 points. The market's full-day turnover was HK$88.3 billion. In terms of blue chips, Sunny Optical (2382) performed best, with its share price rising 2.1% to HK$68.2; on the other hand, Chow Tai Fook (1929) fell 5.2% to HK$10.3; and mainland property stocks were under pressure, with China Resources Land (1109) , Longfor (960) share prices fell 4.6% and 1.6% respectively.

U.S. nonfarm payrolls data beat market expectations

The three major U.S. stock indexes all closed higher. The Dow Jones index rose 130 points, or 0.36%, to 36,245 points; the Nasdaq index rose 64 points, or 0.45%, to 14,404 points; the S&P 500 index rose 19 points, or 14,404 points. It was 0.41% and reported 4604.37 points. All major stock indexes posted gains for a sixth consecutive week on Wednesday. The Dow Jones Industrial Average rose only 2.87 points from last Friday's closing price, with a cumulative gain of less than 0.01% over the week. The S&P 500 rose 0.21% and the Nasdaq rose 0.69%.

In terms of economic data, the non-farm payrolls data released on Friday was inconsistent with the slowdown in the job market seen earlier. The non-farm payrolls in November were higher than market expectations of 180,000 and the previous value of 150,000, to 190,000. At the same time, with the labor force participation rate remaining flat, the unemployment rate dropped 0.2 percentage points from the previous value to 3.7%. This employment data showed that 30,000 people were driven by the return of auto workers to work. Consumer confidence was also much better than market expectations, rising to 69.4, and inflation expectations dropped sharply from 4.5% last month to 3.1%.

China's November inflation was negative 0.5%, while core inflation was positive 0.6%

On Saturday, the National Bureau of Statistics announced that the consumer price index in November fell by 0.5% year-on-year. The negative value was recorded for the second consecutive month, which believed will once again arouse concerns in the market. But in fact, it has been pointed out earlier, last year's high pig prices continue to affect inflation data. For  core inflation, it increased by 0.6% year-on-year, and cumulative core inflation has increased by 0.7% for eight consecutive months. November will be the peak of the high base of pig prices, and the base effect will gradually fade away. By then, China's inflation data may gradually pick up.

The net inflow of Hong Kong Stock Connect on Friday was HK 3.369 bn. Among them, Tracker Fund (2800) had the largest inflow, reaching HK$ 1.79 bn; followed by Meituan (3690). Xiaomi (1810) recorded the largest net outflow of HK$416 mn; followed by China Construction Bank (939).