KGI Asia Commentary
HSI fell 165 points on Wednesday
The Hang Seng Index fell 165 points or 0.9% to 18,313 on Wednesday. HSTECH fell 50 points or 1.3% to 3,872 and HSCEI fell 69 points or 1.1% to 6,456. Daily market turnover was HK$128.6bn.
S&P 500 rally stalls
The S&P 500 ended flat on Wednesday, as its recent rebound stalled after U.S. Treasury yields rose, while mixed corporate earnings reports weighed on investor sentiment. The Dow Jones index rose 0.44% to close at 39,056.39 points, an increase of 172.13 points. The index posted its longest winning streak since 2024. The S&P 500 index fell slightly by 0.03 points to close at 5,187.67 points. The Nasdaq fell 0.18% to close at 16,302.76 points. Uber shares fell 5.7% after it reported a surprising net loss and lower-than-expected booking revenue, while chipmaker Intel dropped more than 2% after it lowered its second-quarter revenue forecast. Tesla shares fell 1.7% after Reuters reported that U.S. prosecutors are investigating whether the company committed wire fraud in an investigation into Tesla's Autopilot system. Reddit shares rose 4% after the social media platform reported stronger-than-expected first-quarter earnings and an upbeat second-quarter outlook, its first earnings season as a public company. Shares of Upstart, an online lending platform, fell nearly 6% after the company issued weak quarterly guidance.
Fed's Collins says economy may need to weaken to get 2% inflation
Collins, speaking at an event at the Massachusetts Institute of Technology (MIT), said that “A slowdown in activity will be needed to ensure that demand is better aligned with supply for inflation to return durably” to the official target. For now, when it comes to monetary policy, “the recent upward surprises to activity and inflation suggest the likely need to keep policy at its current level until we have greater confidence that inflation is moving sustainably toward 2%,” she said, with Collins noting “there is no pre-set path for policy – it requires decisions based on a methodical, holistic assessment of wide-ranging information.”.
Hong Kong Stock Connect had a net inflow of HK1.79bn on Wednesday, of which Li Auto (2015) had the largest net inflow, reaching HK$0.59bn; followed by China Mobile (941). HSBC (5) recorded the largest net outflow at HK$0.83bn, followed by Tencent (700).
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