KGI Asia Commentary
HSI closed flat on Wednesday
The Hang Seng Index closed flat at17,734 on Wednesday. HSTECH fell 7 points or 0.2% to 4,029 and HSCEI fell 1 point or 0.0% to 6,074. Daily market turnover was HK$81.1bn.
The Dow closed up nearly 200 points on Wednesday
U.S. stocks rose on Wednesday after Treasury yields fell to their lowest in two months. The Dow Jones Industrial Average rose 184.74 points, or 0.53%, to 35,273.03 points. The S&P 500 rose 0.41% to 4,556.62 points. The Nasdaq rose 0.46% to 14,265.86 points. On the Nasdaq, which is dominated by technology stocks, 62.9% of its constituent stocks rose. Small-cap and mid-cap stocks outperformed on Wednesday, rising 0.7% and 0.6% respectively. However, the energy sector fell 0.1% on Wednesday as OPEC postponed a production cut meeting originally scheduled for the weekend. They postponed the scheduled meeting from November 26 to November 30 because of difficulties in reaching an agreement on output levels, adding to uncertainty about potential production cuts. Technology stocks were higher, with gains of more than 1% in shares of Google, Microsoft and Meta, offsetting a more than 2% drop in Nvidia shares. Nvidia Corp. reported guidance and third-quarter results that beat Wall Street expectations, but the chipmaker warned that sales in China would be "significantly lower" in the quarter due to U.S. export restrictions on artificial intelligence chips to the country. China accounts for as much as a fifth of sales in its high-margin data center business. Meanwhile, HP shares rose nearly 3% despite reporting mixed fourth-quarter results. Deere & Company, the world's largest farm equipment maker, fell 3% after it forecast lower-than-expected profits in 2024 as high borrowing costs and tight budgets curb demand for farm equipment. At the same time, Nordstrom department store also expressed caution about the outlook, pointing to "weak consumer spending" and third-quarter revenue that fell short of analysts' expectations, causing its stock price to fall more than 4%.
Jobless claims below expectations
The U.S. Department of Labor announced on Wednesday that the number of initial jobless claims for the week ended November 18 dropped by 24,000 to a seasonally adjusted 209,000. Economists had expected that 226,000 people would apply for unemployment benefits in the latest week. At the same time, the consumer confidence index at the end of November was slightly better than expected, but it still fell for the fourth consecutive month. Data released on Wednesday showed that the University of Michigan's consumer confidence index rose to 61.3 in November from 60.4 earlier this month, but down from 63.8 in October.
Hong Kong Stock Connect had a net inflow of HK$5.16bn on Wednesday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$3.51bn; followed by CSOP HS TECH (3033). Tencent (700) recorded the largest net outflow at HK$0.76bn, followed by China Mobile (941).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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