Investment Daily

Hong Kong equities followed the upward trend of US market on Friday morning,but it could not surpass 26000-level. Hang Seng Index increased 115 points andclosed at 25,924 points. HSCEI closed at 10,666 points, rising 47 points. Turnoverwas $85.2 billion. The automobile sector stayed strong, in which the blue chipautomobile stock jumped nearly 5%. On the other hand, the large-sized Chinesebanking sector rose in general, individual stocks hit 52-week high.

    US non-farm payroll data released last Friday is much below expectation,although futures market indicate that rate hike in June is still very likely, but it willslow down rate hike pace in the second half of 2017. US stock market hit newrecord high again last Friday, the Dow and the Nasdaq rose 62 points (to 21,206)and 59 points (to 6,306) respectively. Looking ahead this week, investors focuswill shift to Europe, including the UK election and Europe Central Bank interestrate meeting on Thursday.

    Southbound funds continued to flow in while EM market index hit new high, HKis at the stage of “Fund Flowing In” market. Hence, although valuation of HKmarket is not very attractive, the uptrend has no signs to be reversed yet. HSI islikely to test 26,000.