KGI Asia Commentary

Hang Seng Index fell 229 points on Friday

The Hang Seng Index opened slightly higher by 8 points on Friday, opening at 18,036 points. However, the index fell significantly by 229 points, or 1.27%, to 17,799 points throughout the day; the HSCEI Index fell 88 points, or 1.36%, to 6,382 points; the Hang Seng Technology Index fell 53 points. or 1.45%, at 3,597 points. The total daily turnover of the market was HK$90.3 billion.AI concept stocks cooled down, with SenseTime (20) and 4Paradigm (6682) fell 16% and 5.3% respectively. TingYi (322) raised the price of its flagship instant noodles starting this month, and its share price rose 1.6%.

U.S. employment data continues to cool

U.S. stocks closed higher on Friday. The Dow Jones index closed up 67.87 points, or 0.17%, at 39375.87 points; the Nasdaq index rose by 164.46 points, or 0.90%, at 18352.76 points; the S&P 500 index rose by 30.17 points, The increase was 0.54%, reported at 5567.19 points. All three major stock indexes recorded gains last week, with the Dow Jones Industrial Average rising 0.66% and the S&P 500 Index rising about 2%. The Nasdaq rose 3.5%, posting gains for its fifth consecutive week.

The market continued to focus on U.S. employment data last Friday. U.S. non-farm payrolls increased by 206,000 in June. Although higher than market expectations, it was also lower than the previous value. At the same time, non-farm employment data for May has revived downward sharply to 218,000 from the previously reported 272,000. Over the past year, U.S. employment has increased by an average of 220,000 per month. The unemployment rate rose to 4.1% compared with market expectations and the previous value. In terms of wage growth, it increased by 3.9% year-on-year and 0.3% month-on-month, both in line with market expectations and slightly lower than the previous value. The overall employment shows a cooling signal, increasing the possibility that the Federal Reserve will start cutting interest rates in the coming months.

The Federal Reserve releases its semiannual monetary policy report

On Friday, the Federal Reserve released its semi-annual monetary policy report, which summarized the U.S. economic conditions and the implementation of the Federal Reserve's monetary policy in the first half of the year. It is pointed out that as inflation slows and the job market returns to the "tense but not overheated" state, the U.S. economy is gradually returning to normal. The inflation slowdown is making moderate progress. In addition, new forecasts from policymakers show that they have adjusted their interest rate cut expectations from three times to only once this year, and some financial market participants and policymakers still expect the Federal Reserve to cut interest rates twice before the end of the year.

Net inflows were HK$350 million on Friday, of which Industrial and Commercial Bank of China (1398) had the largest inflow, reaching HK$330 million; followed by Tencent (700). Tracker Fund (2800) recorded the largest net outflow of HK$950 million; followed by Hang Seng China Enterprises (2828).