KGI Asia Commentary
Hang Seng Index rose 108 points on Wednesday
The Hang Seng Index rose 108 points or 0.7% to 16,613 on Wednesday. HSTECH rose 18 points or 0.5% to 3,726 and HSCEI rose 19 points or 0.4% to 5,612. Daily market turnover was HK$90.0bn.
Dow ends winning streak as profit taking triggers sharp reversal
The Dow Jones Industrial Average ended lower on Wednesday, snapping a nine-day winning streak, as stocks staged a sharp reversal on Wednesday as investors appeared to be profiting from a break in the stock market's weeks-long rally. The Dow Jones Industrial Average fell 475.92 points, or 1.27%, to 37,082.00 points. The Nasdaq fell 1.50% to close at 14,777.94 points. Both major stock indexes closed up for nine days, their biggest one-day losses since October last year. The S&P 500 fell 1.47% to 4,698.35, its worst day since September last year. FedEx was the worst performer on the S&P 500, down 12%. The package delivery giant issued a disappointing fiscal year revenue outlook and reported lower-than-expected revenue and profit in its fiscal second quarter. The Dow Jones Transportation Average, a price-weighted index of 20 stocks including FedEx, fell more than 2%. Food processor General Mills cut its annual sales forecast, missing its second-quarter forecast, and warned of a slowing recovery in demand, sending its shares down more than 3%. Alphabet ended up 1%, though well off its session high, after reports the tech giant is considering a plan to restructure its ad sales business through greater use of automation, including machine learning.
Market profit taking
U.S. stocks were briefly higher during the session amid signs of strong consumption and a pickup in housing activity. The Conference Board Consumer Confidence Index jumped to 110.7 in December, the highest level since July 2023 and the second highest level in the past two years. The National Association of Realtors reported on Wednesday that existing home sales rose 0.8% last month to a seasonally adjusted annual rate of 3.82 million units, ending five consecutive months of declines. Investors took profits from the surge in the stock market, which pushed the Dow to a record high and the S&P 500 near a record high, triggering the largest sell-off since March.
Hong Kong Stock Connect had a net outflow of HK$11.0bn on Wednesday, of which CNOOC (883) had the largest net inflow, reaching HK$0.05bn; followed by Xiaomi (1810). Tracker Fund (2800) recorded the largest net outflow at HK$6.95bn, followed by HSCEI ETF (2828).
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