KGI Asia Commentary
HSI fell 157 points on Tuesday
Hang Seng Index closed at 19,785, down 157 points or 0.8%. HSTECH closed at 3,925, down 64 points or 1.6%. HSCEI down 88 points, or 1.3%, to 6,581. Market turnover was HK$142.4bn.
The Dow closed down more than 200 points on Tuesday
Despite a strong start to the year, all major indexes posted their second monthly decline in three months. The Dow Jones Industrial Average fell 232.39 points, or 0.7%, to 32,656.70. The S&P 500 fell 0.3% to 3,970.15 and the Nasdaq Composite lost 0.1% to 11,455.54. Meta Platforms rose more than 3 percent after the company announced the formation of a new team to develop artificial intelligence products for the company. Zoom video communications Inc closed up about 2% after the video conferencing platform reported quarterly results that topped Wall Street expectations for both revenue and profit, driven by growth in its enterprise business. However, Zoom's revenue guidance fell short of expectations. Shares of Target Corporation rose 1% after better-than-expected fourth-quarter results, but its annual guidance came in below expectations. Target CEO Brian Cornell said: “We're planning our business cautiously in the near term to ensure we remain agile and responsive to the current operating environment," Meanwhile, Goldman Sachs Group CEO Solomon (David Solomon) said that the bank is considering "strategic alternatives" to its consumer business after missteps that have cost it billions of dollars. The stock fell nearly 3%.
U.S. Consumer Confidence misses expectations; French CPI hit the peak
On the economic front, U.S. consumer confidence fell to its lowest level since November in February, suggesting that robust consumer spending, which has underpinned robust growth so far this year, may be starting to slow.
Rising inflation in France and Spain has fueled fears of further rate hikes by the European Central Bank. French consumer price inflation accelerated to 7.2% year-on-year, driven by faster price increases for food and services. Economists polled by Reuters had expected French inflation to stagnate at 7% in January. Spain's consumer price index accelerated to 6.1% in February, up from 5.9% in January and higher than economists' forecasts for a cut to 5.5%, despite the country's massive food tax cuts in January. European government bond prices fell in response on Tuesday, with yields on rate-sensitive German two-year bunds rising 0.08 percentage point to 3.15%, the highest level since the 2008 financial crisis.
Hong Kong Stock Connect had a net inflow of HK$3.21bn on Tuesday, of which Tencent (700) had the largest net inflow, reaching HK$0.95bn; followed by Meituan (3690). Tracker Fund (2800) recorded the largest net outflow at HK$5.2bn, followed by HSCEI ETF (2828).
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