KGI Asia Commentary
HSI rose 176 points on Thursday
The Hang Seng Index rose 176 points or 1.0% to 17,910 on Thursday. HSTECH rose 87 points or 2.2% to 4,117 and HSCEI rose 96 points or 1.6% to 6,171. Daily market turnover was HK$97.7bn.
European stocks closed slightly higher on Thursday
Thursday is the U.S. Thanksgiving holiday, and U.S. markets are closed. European stocks ended slightly higher on Thursday amid investors continued to seek direction. The pan-European Stoxx 600 index closed up 0.3%. Oil and gas stocks rose 1.4% despite continued declines in oil prices after OPEC postponed its policy-setting meeting. Travel stocks led the decline, falling 1%. The preliminary Eurozone Purchasing Managers Index for November showed that employment fell for the first time in nearly three years. Although the contraction in business activity has slowed, it continues to decline. The preliminary Eurozone HCOB composite PMI value in November was 47.1, higher than the previous 46.5. The forecast is 46.9.
The vice-president of Germany’s central bank, Buch, warned banks to be aware of interest rate risks. German banks performed strongly in the third quarter, Deutsche Bank's net profit was 1.031 billion euros (about USD1.13 billion); Commerzbank's net profit was 684 million euros, more than three times the same period last year. However, Buch pointed out that the provision for non-performing loans did not significantly increased. “In all likelihood, given the structural change that we have, given the uncertainty that we have around us, corporate insolvencies are likely to increase, credit risk is likely to increase.”
UK PMI composite rose to 50.1, but recession risks remain
UK PMI data for November reflected improved economic activity. The manufacturing PMI rose to a six-month high from 44.8 to 46.7, beating expectations of 45.0. The services PMI rose to a four-month high of 50.5 from 49.5, signaling a return to economic expansion and exceeding expectations of 49.5. The Composite PMI rose to 50.1 from 48.7, a four-month high.
Hong Kong Stock Connect had a net outflow of HK$5.75bn Thursday, of which X-Peng (9868) had the largest net inflow, reaching HK$0.21bn; followed by Xiaomi (1810). Tracker Fund (2800) recorded the largest net outflow at HK$3.02bn, followed by CSOP HS TECH (3033).
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