Market Insights: April 18th, 2024

Stock Market Trends:

• After initially hitting a low, the A-share market rebounded today, with the Shanghai Composite leading the recovery into the green. However, both the Shenzhen Component Index and the ChiNext Index experienced declines.
• Market performance showed significant gains in sectors such as home appliances, minor metals, tourism, short-haul economy, and whole vehicle manufacturers, while oil & gas, real estate, and ST sectors saw larger declines.
• The Hong Kong stock market also fluctuated upwards, with both the Hang Seng Index and the Hang Seng Technology Index registering gains.

Technology Sector:

• European tech giant ASML's first-quarter new orders were significantly below expectations, plunging 61% quarter-over-quarter, leading to a general downturn in European and American chip stocks.
• During the U.S. stock trading session, the index for Chinese concept stocks continued to decline, whereas Chinese electric vehicle manufacturer Xpeng Motors bucked the trend, rising nearly 4%.

Currency and Economic Policies:

• Goldman Sachs analysts, in their latest report, pointed out that the trend of the U.S. dollar is dominating the movement of Asian currencies. Despite a pickup in Asian economic growth and easing inflation in recent months, the Federal Reserve's policy path has a more significant impact on the exchange rates of the U.S. dollar and Asian currencies.
• Current market expectations suggest the Federal Reserve might continue to raise interest rates, in stark contrast to early-year predictions of cuts, opening up room for further appreciation of the U.S. dollar.
• Under these circumstances, Asian currencies like the Korean won, Malaysian ringgit, and Indonesian rupiah may face depreciation risks, while the Indian rupee's sensitivity to devaluation decreases.

Commodity Markets:

• Oil prices fell more than 3% on the day, marking the largest drop in three months, and continued to fall to a three-week low for the third consecutive day. Meanwhile, gold prices also saw a decline for four consecutive days. However, copper prices rose more than 1% on the market, reaching a near two-year high.
• Bitcoin's price fell below the $60,000 threshold during trading, dropping nearly $5,000 to hit a new low for the first month in over a month.

Energy Sector:

• International oil prices fell on the day, affected by multiple factors. The increase in U.S. crude oil inventories was almost twice the market expectation at 2.7 million barrels, and concerns about China's demand decline were suppressed by worries about the potential impact of tensions in the Middle East on oil supplies.

Financial Industry:

• Morgan Stanley plans to cut about 50 investment banking positions in the Asia-Pacific region, with at least 80% of these employees based in Hong Kong and mainland China. This move marks another significant round of layoffs after last year's reductions, possibly due to declining revenues in Asia. This round of layoffs could be the largest in the firm's history in China.

Law and Regulation:

• ST Hengjiu Company received a case filing notice from the China Securities Regulatory Commission for alleged illegal information disclosure. Reportedly, the company's controlling shareholder and actual controller, Yu Rongqing, received a "Case Filing Notice", indicating regulatory violations. This decision was made in accordance with the "Securities Law of the People's Republic of China" and the "Administrative Punishment Law of the People's Republic of China" among other regulations.