KGI Asia Commentary
HSI fell 92 points on Wednesday
The Hang Seng Index fell 92 points or 0.6% to 16,097 on Wednesday. HSTECH fell 26 points or 0.8% to 3,428 and HSCEI fell 28 points or 0.5% to 5,421. Daily market turnover was HK$74.5bn.
U.S. stocks rise, led by large-cap stocks
U.S. stocks closed higher on Wednesday as investors awaited the release of new U.S. inflation data and corporate earnings reports. The S&P 500 rose 0.57% to close at 4,783.45 points; the Dow Jones Industrial Average rose 170.57 points to close at 37,695.73 points, an increase of 0.45%. The Nasdaq rose 0.75% to close at 14,969.65 points. Microsoft, Meta Platforms and Nvidia are the biggest contributors to the S&P 500. Communication services is the best-performing of the S&P's 11 major sectors, with Meta Platform shares up about 4% since September 2021 after Mizuho raised its price target on Meta Platform to $470 from $400. highest level. Nvidia shares hit a record high after fellow chipmaker TSMC beat fourth-quarter revenue estimates. On Friday, banking giants JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are expected to report lower fourth-quarter profits.
Investors await inflation data
The market expects the consumer price index (CPI) to rise 0.2% in the last month of 2023 and 3.2% for the full year. Minutes of the meeting released last week did not show any discussion on the timetable for a rate cut. The current core task of the Federal Reserve is to adjust policy. It can neither be too loose and let inflation return, nor keep the policy too tight to avoid triggering a recession. Federal Reserve Bank of New York President John Williams said on Wednesday it was too early to call for a rate cut because the Fed still has some distance to go on getting inflation back to its 2% target. Market participants have lowered expectations for a rate cut of at least 25 basis points in March to 65%, according to the CME Group's FedWatch Tool.
Hong Kong Stock Connect had a net inflow of HK$2.56bn on Wednesday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$0.81bn; followed by CSOP HS TECH (3033). Tencent (700) recorded the largest net outflow at HK$0.80bn, followed by SMIC (981).
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