KGI Asia Commentary

HSI rose 54 points on Wednesday

The Hang Seng Index rose 54 points or 0.3% to 17,845 on Wednesday. HSTECH rose 7 points or 0.2% to 4,008 and HSCEI rose 19 points or 0.3% to 6,117. Daily market turnover was HK$84.2bn.

U.S. stocks close higher as tech stocks regain momentum

U.S. stocks closed higher on Wednesday as Wall Street awaited the latest quarterly data from Nvidia, the chip designer buoyed by Wall Street's artificial intelligence boom. Falling bond yields also boosted investor sentiment. The Dow Jones Industrial Average rose 184.15 points, or 0.5%, to 34,472.98. The S&P 500 rose 1.1% to close at 4,436.01. The tech-heavy Nasdaq Composite rose 1.6% to 13,721.03, marking a three-day winning streak. Shares of sporting goods retailer Foot Locker fell 28% after it stopped paying a dividend and cut its guidance for the second straight quarter after reporting quarterly revenue that fell short of Wall Street expectations. Demand continued to soften in July as price-sensitive consumers felt pressure from inflation, the company said. Shares of Nike Inc., Footlocker's main merchandise supplier, fell more than 2 percent. However, Abercrombie & Fitch bucked the trend and jumped 23% after reporting better-than-expected quarterly results and raising its annual outlook. Peloton Interactive, which said it doesn't expect to be cash-flow positive for the next two quarters, reported a wider-than-expected loss due to a sharp drop in subscribers. Shares of the company fell nearly 22% to close at an all-time low. The company attributed the cash burn in the coming quarters to higher-than-expected bike recall costs and higher marketing spending.

All eyes on Jerome Powell's Jackson Hole speech this week

The Jackson Hole Economic Symposium for 2023 will be held from August 24 to 26. Although other central banks and economic leaders will also attend, the speech of Federal Reserve Chairman Powell will focus on the market. The U.S. economy had shown signs of slowing inflation ahead of the seminar, but it remained well below the Fed's 2 percent target. The strong labor market has yet to show significant signs of softening, leading to the current "higher for longer" narrative. Powell's upcoming speech at Jackson Hole could have important implications for the wider economic community and markets.

Hong Kong Stock Connect had a net inflow of HK$3.1bn on Wednesday, of which Meituan (3690) had the largest net inflow, reaching HK$0.31bn; followed by China Mobile (941). CSOP HS TECH (3033) recorded the largest net outflow at HK$0.11bn, followed by Tencent.