KGI Asia Commentary

Hang Seng Index fell 170 points on Tuesday

The Hang Seng Index fell 170 points or 1.0% to 17,354 on Tuesday. HSTECH fell 31 points or 0.8% to 4,000 and HSCEI fell 68 points or 1.1% to 5,957. Daily market turnover was HK$95.0bn.

Dow closes higher as dovish comments from Fed official push down bond rates

The Dow closed higher on Tuesday, supported by a drop in U.S. Treasury yields as dovish comments from some Federal Reserve officials boosted bets on interest rate cuts. The Dow Jones Industrial Average rose 83.51 points, or 0.24%, to close at 35,416.98 points. The S&P 500 index edged up 0.10% to 4,554.89 points, and the technology-heavy Nasdaq index rose 0.29% to close at 14,281.76 points. U.S. Federal Reserve Governor Christopher Waller said he is "increasingly confident" that current policies will do a good job of slowing economic growth and bringing inflation back to the 2% target. Affected by this statement, U.S. Treasury bond yields fell. The 2-year U.S. Treasury bond yield fell nearly 12 basis points to around 4.74%, and the 10-year U.S. Treasury bond yield fell 6 basis points to 4.330%. Boeing boosted the Dow Jones Industrial Average up 1.4% on Tuesday, while Dow component retailers Nike and Walmart rose 0.7% and 1.2% respectively.

Retailers in focus after Cyber Monday sales hit record

Continuing signs that consumer confidence unexpectedly rose in November and consumers are still in good shape, while Cyber Monday sales hit a record high, boosted sentiment among retailers. Consumer spending on Cyber Monday, the largest online shopping day in the United States, is expected to soar to a record high of more than $12 billion, according to preliminary estimates from Reuters citing Adobe Digital Insights. Retailers like Walmart and Foot Locker are on the rise, while payments platform Affirm is up nearly 12% as a record number of holiday shoppers are likely to use "buy now, pay later" services.

U.S. Treasury yields fall as Fed officials boost hopes of rate cut

Earlier on Tuesday, U.S. Federal Reserve Governor Christopher Waller expressed confidence that policy is " currently well positioned" to slow economic growth and bring inflation down to 2%. He made the comments before the Federal Open Market Committee (FOMC) meeting to discuss interest rates on December 12-13. Markets generally expect the committee to keep interest rates unchanged.

Hong Kong Stock Connect had a net outflow of HK$3.05bn on Tuesday, of which Tencent (700) had the largest net inflow, reaching HK$0.38bn; followed by SMIC (981). Tracker Fund (2800) recorded the largest net outflow at HK$2.45bn, followed by Meituan (3690).