KGI Asia Commentary
Hang Seng Index fell 190 points on Thursday
The Hang Seng Index fell 190 points or 0.9% to 20,429 on Thursday. HSTECH fell 59 points or 1.4% to 4,126 and HSCEI fell 57 points or 0.8% to 6,857. Daily market turnover was HK$110.5bn.
The Dow rallied Thursday, after Atlanta Federal Reserve President Bostic ruled out support for aggressive rate hike
Stocks rallied on Thursday as markets tried to shrug off worries about rate hikes. The S&P 500 and Nasdaq came under pressure early on. Markets, however, improved in the afternoon after Atlanta Federal Reserve President Bostic said he was "firmly" in favor of sticking to a 25 basis point hike. "Right now, I'm still very firmly in the quarter-point move camp," he told reporters on Thursday, easing concerns that after strong economic data, Fed may be forced to resume a more aggressive 50 basis point rate hike. The Dow Jones Industrial Average rose 341.73 points, or 1.05%, to 33,003.57. The S&P 500 gained 0.76% to close at 3,981.35. The Nasdaq Composite gained 0.73% to close at 11,462.98. Utilities and consumer staples were the biggest gainers on the day, the latter also helped by a 5 percent rise in shares of grocery chain Kroger. The company's better-than-expected guidance overshadowed a mixed fourth-quarter result in which revenue fell short of Wall Street expectations. Meanwhile, Macy's reported quarterly earnings that topped estimates, sending shares of the department store chain up 10%. Shares of Salesforce jumped more than 12% after Salesforce reported fourth-quarter results and guidance that beat Wall Street expectations. Tesla, on the other hand, detailed plans to reduce costs during its investor day on Wednesday, but failed to provide an update on plans to roll out more affordable electric vehicles, sending its shares down nearly 6%. Meanwhile, cryptocurrency bank Silvergate Capital Corp plummeted after delaying the release of its annual report, raising concerns about its ability to survive the FTX crash and crypto market slump.
ECB says rate hikes not over yet
New data from the euro zone on Thursday showed it would take some time for inflation to fall significantly, raising the chances of further rate hikes in the region in the coming months. Inflation in the euro zone fell to 8.5% in February from 8.6% in January, but was 8.3% higher than expected. During the period, core inflation climbed to a record high of 5.6%, beating expectations of 5.3%. ECB President Christine Lagarde said Thursday that bringing down inflation will still take time. The central bank is targeting a headline rate of 2%.
Hong Kong Stock Connect had a net inflow of HK$7.31bn on Thursday, of which HSCEI ETF (2828) had the largest net inflow, reaching HK$1.72bn; followed by Tracker Fund (2800). Wuxi Bio (2269) recorded the largest net outflow at HK$0.20bn, followed by CCB (939).
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