KGI Asia Commentary
HSI fell 63 points on Wednesday
The Hang Seng Index fell 63 points or 0.3% to 18,952 on Wednesday. HSTECH fell 14 points or 0.3% to 4,114 and HSCEI fell 18 points or 0.3% to 6,381. Daily market turnover was HK$111.7bn.
Dow closes up 109 points, breaks 35,000 mark
The Dow ended higher on Wednesday, snapping its eighth straight session of gains as investors continued to digest the latest quarterly results. The S&P 500 rose 0.2%, the Dow Jones Industrial Average rose 0.3%, or 109 points, and the Nasdaq was flat. Goldman Sachs Group Inc reported second-quarter earnings that missed Wall Street expectations, dragged down by weakness in its consumer and investment banking businesses. But the stock rose 1% as deal activity picked up and Chief Executive David Solomon expressed optimism about signs of recovery in the investment banking business. " It definitely feels better over the course of the last six-to-eight weeks than it felt earlier in the year,” Solomon said on an earnings call after the quarterly report. Western Alliance Bancorporation shares rose more than 6% despite the company's mixed quarterly results, signs of further stabilization of deposits quelled investor fears of potential outflows from regional banks after a mini-banking crisis erupted last summer. Streaming giant Netflix reported its second-quarter earnings, and although the company added 5.89 million new subscribers during the quarter, well above the 2.07 million expected, revenue fell short of Wall Street expectations. On Wednesday, Carvana announced an agreement with bondholders to reduce more than $1.2 billion in debt, sending shares of the used-car retailer up more than 40% during trading hours. Tesla's first-quarter earnings report on Wednesday showed the electric carmaker's profit margins were not as bad as feared, despite recent price cuts.
UK inflation slips to 7.9% in June, below expectations
U.K. inflation cooled significantly in June, with inflation increasing by 7.9% year-on-year, which was lower than market consensus expectations. On a monthly basis, it rose 0.1%, below the consensus estimate of 0.4%. Core inflation, which excludes volatile energy, food, alcohol and tobacco prices, rose 6.9 percent year-on-year, but eased from a 31-year high of 7.1 percent in May. Falling petrol prices had the biggest impact on the monthly annualized change in the CPI, the Office for National Statistics said on Wednesday. British inflation slowed sharply in June, boosting confidence that global central banks will slow the pace of tightening.
Hong Kong Stock Connect had a net inflow of HK$16.4bn on Thursday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$0.20bn; followed by HSCEI ETF (2828). Tencent (700) recorded the largest net outflow at HK$0.77bn, followed by HSBC (5).
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