KGI Asia Commentary
HSI fell 246 points on Thursday
The Hang Seng Index fell 246 points or 1.3% to 18,230 on Thursday. HSTECH fell 12 points or 0.3% to 3,752 and HSCEI fell 94 points or 1.4% to 6,462. Daily market turnover was HK$125.5bn.
Dow drops more than 300 points as Salesforce plunges 20%
U.S. stocks closed lower on Thursday as Salesforce had its worst day in nearly 20 years. Traders are also watching the release of key U.S. inflation data. The Dow Jones Industrial Average fell 330.06 points, or 0.86%, to 38,111.48 points. The S&P 500 fell 0.6% to close at 5,235.48 points. The Nasdaq fell 1.08% to 16,737.08, highlighting weakness in technology stocks. Salesforce's first-quarter revenue fell short of expectations and its outlook was bleak. Its stock price plummeted 19.7%, marking its worst trading day since 2004. Nvidia also fell more than 3%, marking its first negative session since last week's blockbuster earnings report. Microsoft shares fell more than 3%, their worst day since October last year. Foot Locker shares rose 15% as the retailer confirmed its 2024 guidance as its turnaround plan showed signs of progress. Shares of Dollar General (DG) fell 8% after the discount retailer reported strong first-quarter earnings even though consumers spent less on average in the first quarter than a year earlier. Shares of department store chain Kohl's (KSS) fell 23% after the company reported an unexpected first-quarter loss and issued a profit warning for 2025. Clothing retailer American Eagle Outfitters reported lower-than-expected first-quarter sales. Although revenue increased 5% from the same period last year, the company's stock price fell more than 7%.
GDP growth slows in first quarter; inflation data eyed
The U.S. economic growth in the first quarter was lower than previously expected, with domestic GDP growing at an annualized rate of only 1.3%, lower than the 1.6% previously expected, and significantly lower than the 3.4% growth rate in the fourth quarter of 2023. Shortly after the data was released, Federal Reserve John Williams gave a speech in which he dismissed concerns about a rate cut, saying that the current level of monetary policy was suppressing the economy.
Hong Kong Stock Connect had a net inflow of HK4.4bn on Thursday, of which Tencent (700) had the largest net inflow, reaching HK$0.83bn; followed by ICBC (1398). Tracker Fund (2800) recorded the largest net outflow at HK$0.13bn, followed by Meituan (3690).
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