KGI Asia Commentary

HSI fell 50 points on Tuesday

Hang Seng Index closed at 21,113, down 50 points or 0.2%. HSTECH closed at 4,330, down 44 points or 1.0%. HSCEI down 34 points, or 0.5%, to 7,110. Market turnover was HK$97.6bn.

DJIA fell as U.S. inflation cools less than expected

The Dow Jones Industrial Average ended lower on Tuesday as investors digested the latest data showing that U.S. inflation had cooled less than expected, triggering a rise in U.S. Treasury yields and betting on a more hawkish stance from the Federal Reserve. The Dow Jones Industrial Average fell 156.66 points, or 0.46%, to 34,089.27. The S&P 500 fell 0.03% to 4,136.13. The Nasdaq Composite pared earlier losses to close at 11,960.15, up 0.57%, led by gains of 7.51% for Tesla and 5.43% for Nvidia. Palantir shares soared 21.1% on Tuesday as the software company posted a $31 million fourth-quarter profit, a positive first-quarter profit for the company. Palantir's revenue was also stronger than expected, growing 18% year-over-year in the quarter. The company said it expects to remain profitable through 2023, beating Wall Street expectations for a full-year loss of 11 cents per share. Nvidia rose 5.4% in Tuesday's session as Bank of America raised its price target on the company to $255 a share from $215 and said the company is ready to lead the "AI arms-race."

OPEC Raises World Oil Demand Forecast For 2023

In its latest monthly report on the oil market, OPEC raised its forecast for global oil demand growth in 2023 by 100,000 barrels per day to 2.3 million barrels per day. The increase was due in large part to “improvements in economic activity in some countries and a slight recovery in oil demand in China after the lifting of its zero-Covid-19 policy.” "improving economic activity in some countries and a slight recovery in oil demand in China following the removal of the zeroing policy".

Jan CPI rose 6.4% yoy

The Consumer Price Index (CPI) rose 0.5% month-on-month in January, in line with expectations, but rose 6.4% year-on-year, more than the expectations of 6.2%. Excluding the volatile food and energy, the core CPI increased by 0.4% month-on-month and 5.6% year-on-year, higher than the expected 0.3% and 5.5% respectively. Rising shelter costs accounted for about half of the month's increase, the Bureau of Labor Statistics said in the report. The component accounts for more than a third of the index and rose 0.7% on the month and was up 7.9% from a year ago.

Hong Kong Stock Connect had a net outflow of HK$3.7bn on Tuesday, of which Meituan (3690) had the largest net inflow, reaching HK$1.23bn; followed by Kuaishou (1024). Tracker Fund (2800) recorded the largest net outflow at HK$3.1bn, followed by HSCEI ETF (2828).