KGI Asia Commentary
Hang Seng Index rose 340 points on Thursday
The Hang Seng Index rose 340 points or 1.6% to 21,624 on Thursday. HSTECH rose 140 points or 3.2% to 4,571 and HSCEI rose 124 points or 1.7% to 7,313. Daily market turnover was HK$117.7bn.
Nasdaq falls 1% as Alphabet shares continue to fall
U.S. stocks ended lower on Thursday, paring early gains, as worries about the Federal Reserve's future monetary policy move offset excitement from the latest batch of corporate earnings reports. The Dow Jones Industrial Average fell 249.13 points, or 0.73%, to 33,699.88. The S&P 500 fell 0.9% to close at 4,081.50. The Nasdaq Composite fell 1.02 percent to close at 11,789.58, the biggest drop among the three major indexes. Shares of Google parent Alphabet fell more than 4% as investors grew increasingly concerned about growing competition in artificial intelligence. A 3% drop in Meta also weighed on the tech-heavy Nasdaq Composite. Gaming stocks rose after Wynn Resorts and MGM Resorts International reported better-than-expected quarterly results, while consumer stocks rose. Meanwhile, Walt Disney Co. reported quarterly results that beat Wall Street expectations, and shares rose briefly, but ended lower. The company announced a restructuring plan that included cutting 7,000 jobs. Separately, PepsiCo rose nearly 1% after fourth-quarter earnings topped Wall Street expectations.
U.S. recession fears linger
The 85 basis point inversion of the U.S. 2-10 Treasury yield curve, the biggest inversion since the early 1980s, has raised fresh concerns about economic problems amid investors price in a more hawkish Fed. The number of people filing initial jobless claims rose by 13,000 to 196,000 last week, the Labor Department said on Thursday. The figure was higher than expectations of 190,000 and compared with a revised 183,000 the previous week. A strong labor market has masked recession fears, yet, some market participants saying a recent surge in layoffs will start to push up claims later in the year.
Hong Kong Stock Connect had a net outflow of HK$0.82bn on Thursday, of which Xiaomi (1810) had the largest net inflow, reaching HK$0.19bn; followed by Koolearn (1797). HSCEI ETF (2828) recorded the largest net outflow at HK$0.41bn, followed by Meituan (3690).
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