Hong Kong’s Hang Seng Index fell more than 2% in recent trading, primarily dragged down by the consumer cyclicals sector. E-commerce giant JD.com saw its shares slump as much as 12% to its lowest level in a year, while jewelry company Chow Tai Fook, restaurant chain Haidilao, and automobile company Zhongsheng Group also experienced significant losses. Other heavyweights on the index, including Baidu, Alibaba, and Meituan, also saw their shares decline.
The consumer prices in China remained flat in September, falling below expectations of a 0.2% increase. The country’s producer price index also fell by 2.5% from a year earlier, weaker than economists had predicted. These tepid prices highlight the challenges in China’s economic recovery following the easing of Covid restrictions last year.
JD.com shares slumped to their lowest in a year due to downgrades and target price revisions by brokers, reflecting concerns about weaker retail growth for the e-commerce giant. Morgan Stanley downgraded JD.com to equal-weight from overweight, while Jefferies slashed its price target for the company’s Nasdaq listing.
China’s exports in September declined by 6.2% compared to a year ago, which was lower than the expected 7.6% drop. Similarly, imports also fell by 6.2% in U.S. dollar terms, slightly exceeding the Reuters poll forecast of a 6% decline. China has seen a decline in exports on a year-on-year basis every month since May, while imports have not shown positive growth since September last year.
Singapore’s central bank has kept its monetary policy stance unchanged for the second consecutive meeting, maintaining the rate of appreciation of its Singapore dollar nominal effective exchange rate policy band. The country’s GDP grew 0.7% year-on-year in the third quarter, beating expectations. The construction sector saw growth of 6%, while the manufacturing sector contracted by 5%.
India’s inflation eased to a three-month low of 5.02% in September, driven by lower vegetable prices. While this was below economists’ expectations of a 5.5% increase, it remains above the central bank’s target of 4%. The Reserve Bank of India recently kept interest rates steady at 6.5%.
According to Wolfe Research chief investment strategist Chris Senyek, Thursday’s consumer price report for September will not be enough to stop the Federal Reserve from raising interest rates one more time before the end of 2023. Senyek believes that core inflation needs to break below 4% before the Fed will pause and remain on hold for an extended period.
Asset management firm AllianceBernstein is bullish on India’s prospects, citing stronger economic growth, increased government spending, and a bottoming out of inflation. They expect India to provide one of the highest returns among key markets over the next several years. The firm disclosed some of its favorite stocks in the country.
According to Deepwater Asset Management, an under-the-radar AI stock will be crucial to the long-term infrastructure rollout of artificial intelligence. The stock is expected to benefit from the increasing adoption of AI technology.
Oil prices have been kept in check by concerns about demand, according to Helima Croft, RBC Capital Markets commodities strategist. Despite fears of an expansion of the Israel-Hamas war disrupting global oil supply, reports of a surprising gasoline build in the United States last week have helped to keep prices from rising further.
Analysts predict that the recent IPO of Birkenstock will boost shares of a British footwear brand by 65%. The successful IPO of the German shoe brand has generated positive sentiment in the footwear industry.