Investment Daily Note

U.S. stocks surged as Republicans agreed to extend debt-ceiling deadline

    The U.S. default risk receded after Republicans proposed to extend the debt-ceiling deadline by six weeks without conditions. The FOMC minutes showed that the Committee members mostly agreed that the Fed should begin QE-tapering in this year. The Dow closed at 15,126, up 323 points. The S&P 500 closed at 1,692, up 2.2%. Hong Kong stocks may open higher with up-gap and the HK ADRs gained in the U.S. market, with their closing prices effectively putting HSI up 322 points, closing at 23,273. U.S. initial jobless claims jumped. New York gold futures in December closed at US$1,296.90/oz, down 0.8%. With a fall of OPEC oil output in September, New York crude oil futures rose US$1.40 to settle at US$103.01/bbl.

    HSI fell 82 pts amid the A-share decline

    The market sentiment was stabilized by the nomination of Fed vice-chair Janet Yallen. With the A-share plunge, the Hang Seng Index plunged 290 points and narrowed the downtrend, closing at 22,951, down 82 points. Market turnover was HK$55.7bn. The Shanghai Composite ended 0.9% lower at 2,190.

    Chinese property developers advanced with Kaisa (1638.HK, HK$2.58) up 3.2% and Shimao Property (813.HK, HK$19.70) hitting as high as HK$20.20. With news about the M&A reforms in China’s dairy industry, Biostime (1112.HK, HK$65.50) gained 5.6% and Modern Dairy (1117.HK, HK$3.51) climbed 8%. Gold fell on the USD strength, and gold and jewelry retailers pulled back, with Chow Tai Fook (1929.HK, HK$11.4) down 2.7%. Sa Sa (178.HK, HK$8.20) slumped 5.9% after analysts held their bearish view on the cosmetic retailer. C.P. Lotus (121.HK, HK$0.26) surged 26% on Wednesday but retreated 10.3% after it denied its acquisition plan over ParknShop. Shunfeng PV (1165.HK, HK$4.94) rallied 22% after it became a prospective strategic investor for the restructuring of Wuxi Suntech.