INVESTMENT DAILY

The Hang Seng Index is expected to trade at 18,900 to 19,300today

    A sharp fall in oil price led the US and Europe market down, Hong Kong equitiesonce declined nearly 700-point on Wednesday morning. The Hang Seng Indexposted a narrow decline afterward. Hang Seng Index closed at 18,991 points,decreasing 455 points. HSCEI closed at 7,858 points, dropping 200 points. Turnoverfor the whole day was $78.9 billion. Lenovo slumped more than 10% after releasingthe quarter results, which was the worst blue chip performer. The insurance sectortook the lead since UnionPay placed cubs on policy purchases. AIA (1299)decreased more than 9% at opening, it closed down by 4.9%. Ping An (2318), ChinaLife (2628) and CPIC(2601) fell around 3% to 4%.

    US service sector grew in January at the slowest pace in almost two years, togetherwith selling pressure on banking and technology sector, US stock market fell onearly Wednesday with the Dow once dropped 190 points. However, Federal ReserveBank of New York president Dudley warned that financial condition has beentightened, while additional strength of US Dollar could have significantconsequence for US economy. His comment strengthen investors belief that the Fedmight slow its rate hike pace. US dollar decline while US stock market and oil pricerebounded sharply rebound, the Dow closed 183 points higher (at 16,337) while theNasdaq dropped 13 points (to 4,504).

    Local blue chips performed well in the US ADR market, it will provide support toHK market today. However, Union Pay tighten the restriction for overseas insurancepayment, indicating Central government is imposing more measures to preventcapital outflow. Local market sentiment remain weak. We expect investors to becautious ahead of the long holidays.