Investment Daily Note

US stocks pulled back; Dow off 200 pts

US stocks retreated as market eyed the results reporting period starting from next week. Healthcare and industrial sectors declined. Dow closed at 17,776, down 200 points. S&P 500 closed at 2,068, down 18 points. NASDAQ closed at 4,901, down 47 points. ADRs rose in the US market, with their closing prices effectively putting HSI up 10 points, closing at 24,911. Iran and six world powers failed to reach an agreement on nuclear issues before deadline. But there were market speculations on Iran to export crude oil to Western countries, putting downward pressure on oil prices. New York crude oil futures closed at US$47.6/bbl, down US$1.08. New York gold futures settled at US$1,183/oz, off US$2.

HSI met resistance at high, failed to reclaim 25,000-mark

The Hang Seng Index opened over 200 points higher yesterday driven by the Chinese government’s decision to revive the property market. The HSI reclaimed the 25,000-point mark as soon as trade session opened, but then retreated from high and pared most of the gains after midday, closing at 24,900, up 45 points. The HSCEI settled at 12,346, up 39 points. The market turnover was ~HK$148.8bn. Chinese property plays drifted lower, with China Overseas (688.HK, HK$25.05) down 3.7% to become the top blue-chip loser and China Res Land (1109.HK, HK$21.90) down 1.4%. Sunac (1918.HK, HK$6.73) fell 3.9% after a rally of almost 7% the day before. All Chinese banks have reported earnings. With market focus staying on non-performance loan ratios and liquidity soundness of Chinese banks, fund flows were drawn to some safer state-owned names. ICBC (1398.HK, HK$5.72) and Bank of China (3988.HK, HK$4.48) were up by 1.2% and 0.5% respectively. Minsheng Bank (1988.HK, HK$9.47) announced forecast-missing results the day before last, stock price bucked the market uptrend by 0.2% yesterday on market concerns over its low capital adequacy ratio.