KGI Asia Commentary
Hang Seng Index fell 162 points on Monday
The Hang Seng Index closed at 16,629 points for the day, down 162 points or 1.0%. The Hang Seng Technology Index reported at 3,730 points, down 50 points or 1.3%. The H-Share Index fell 65 points, or 1.2%, to 5,634 points. The market turnover was HK$ 94.317 bn.
S&P 500 ends higher as Fed official's speech fails to cool gains
The S&P 500 ended higher on Monday, even as Federal Reserve officials tried to temper expectations of a rate cut. The Dow Jones Industrial Average was flat, the Nasdaq gained 0.61% and the S&P 500 gained 0.5%. Chicago Fed President Austan Goolsbee said earlier on Monday that he was "confused" by the market reaction after last week's Fed meeting, adding that Fed members "don't debate specific policies speculatively about the future." Meanwhile, Fed Chairman Loretta Mester also tried to push back, saying the next phase of the Fed's policy is not "when to reduce rates ... It's about how long do we need monetary policy to remain restrictive in order to be assured that inflation is on that sustainable and timely path back to 2%." The comments echoed comments made late last week by New York Fed President Williams, who said policymakers were not "really talking" about cutting interest rates "right now.". Shares of U.S. Steel soared 26% after Nippon Steel (TYO:5401) announced it would acquire its U.S. rival for $14.9 billion, including debt. The Japanese company will price $55 per share in an all-cash deal, a 40% premium to U.S. Steel's closing price on Friday.
Red Sea tensions send oil prices higher
Energy stocks rose nearly 1%, boosted by rising oil prices after Russia said it would expand oil export restrictions to about 50,000 barrels a day in December. Separately, some shipping companies said over the weekend that they would avoid the Suez Canal amid increased attacks on merchant ships by Yemen's Houthi rebels in the Red Sea, exacerbating concerns about crude supplies.
Hong Kong Stock Connect had a net outflow of HK$11.7bn on Monday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$8.1bn; followed by HSCEI ETF (2828). Cosco Ship (1919) recorded the largest net outflow at HK$0.31bn, followed by X-Peng (9868).
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