Investment Daily Note

Three major US indices up; Dow 82 pts higher .

US stocks gained across sectors on fewer-than-expected initial jobless claims. Three major US stock indices ended higher. Dow closed at 17,924, up 82 points. S&P 500 closed at 2,088, up 7 points. NASDAQ closed at 4,945, up 25 points. ADRs rose in the US market, with their closing prices effectively putting HSI up 79 points, closing at 27,369. Stronger US Dollar and market concerns on crude oversupply were the drags on oil prices. New York crude oil futures closed at US$58.94/bbl, down US$1.99. Gold prices were also weighed down. New York gold futures settled at US$1,182.20/oz, off US$8.10.

HSI down 350 pts on continued pullback .

The Hang Seng Index continued pullback into the sixth day, opening 73 points down and widened losses to 433 points at most. It pared some losses approaching market end, finishing 350 points down at 27,289. The HSCEI settled at 13,768, down 228 points. Market turnover was ~HK$161.6bn. Chinese insurance players were hurt yesterday by sharp losses on Mainland market by as much as 3%, with China Life (2628.HK, HK$37.25) and CPIC (2601.HK, HK$39.30) off 1.7% and 2.0% respectively. China Taiping (966.HK, HK$28.30), having announced to place shares to raise funds, also dropped 3.1%. For individual stock performance, China Mobile (941.HK, HK$107.70) slipped 2.6%; and HKEX (388.HK, HK$280.20) dropped 2.0%. Sector wise, investors continued to lock in profits on Chinese property plays, with Evergrande (3333.HK, HK$6.82) plunging 8.2% and Agile Property (3383.HK, HK$6.12) down 4.4%. Infrastructure stocks also suffered sell-off. China Railway (390.HK, HK$9.36), China Comm Cons (1800.HK, HK$11.64) and China Rail Cons (1186.HK, HK$13.30) lost 4.6%, 5.2% and 6.1% respectively. Although the present price rocket is expected to continue, most stocks are now trading at substantially higher prices compared with late March. Investors should be more selective in stock pick even when the market turns firm, and should stay sidelined instead of making heavy bets on rebound in the near term.