KGI Asia Commentary
HSI fell 25 points on Wednesday
The Hang Seng Index fell 25 points or 0.1% to 19,195 on Wednesday. HSTECH rose 11 points or 0.3% to 3,992 and HSCEI fell 3 points or 0.0% to 6,817. Daily market turnover was HK$126.6bn.
Dow closes 200 points lower as Fed raises inflation concerns again
U.S. stocks fell on Wednesday as minutes from the Federal Reserve's May meeting stoked concerns about persistent inflation and suggested the central bank may not cut interest rates anytime soon. The Dow Jones Industrial Average fell 201.95 points, or 0.51%, to close at 39,671.04 points. It was the index's worst trading day in May. The S&P 500 fell 0.27% to close at 5,307.01 points, and the Nasdaq fell 0.18% to close at 16,801.54 points. Shares of TJX Corp rose more than 3% after parent company TJ Maxx reported better-than-expected first-quarter results and raised its annual profit forecast. Sportswear retailer Lululemon's shares fell 7% after the company announced the departure of chief product officer Sun Choe. Target Corp. shares fell 8% as earnings missed expectations and management said trends in discretionary spending were weakening. The retailer's troubles raise broader concerns about consumer spending.
Fed minutes show concern over lack of progress on inflation
Minutes of the FOMC meeting from April 30 to May 1 released on Wednesday showed a lack of progress in lowering inflation in recent months.“Participants observed that while inflation had eased over the past year, in recent months there had been a lack of further progress toward the Committee’s 2 percent objective,” the summary said. “The recent monthly data had showed significant increases in components of both goods and services price inflation.” The minutes also showed “various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.”
Hong Kong Stock Connect had a net inflow of HK1.65bn on Wednesday, of which BOC (3988) had the largest net inflow, reaching HK$0.71bn; followed by CCB (939). X Peng (9868) recorded the largest net outflow at HK$0.44bn, followed by Meituan (3690).
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