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Market Insights: May 28th, 2024

TraderKnows
TraderKnows
05-28

The three major stock indexes of the A-shares opened slightly lower; Tencent's major shareholder Naspers plans to reduce its holdings in Tencent stock.

International Market Updates

  • Crude Oil and Precious Metals Market:
  1. Due to OPEC+ extending its oil production cuts until the end of September, and the anticipated increase in oil demand from the U.S. summer driving season, both WTI and Brent oil prices rose significantly on Monday, with intraday gains exceeding 1%.
  2. Gold and silver prices also surged on Monday, with gold rising over 1% and silver futures climbing over 5% at one point.
  • Federal Reserve and Inflation Data:

This Thursday, the Federal Reserve's most watched inflation measure - the Personal Consumption Expenditures (PCE) inflation data - will be released. Economists expect the report to show positive signals, indicating continued declines in inflation.

Chinese Market Updates

  • Stock Market:
  1. The Shanghai Composite regained 3100 points and the Hong Kong stock market saw a V-shaped rebound. Semiconductor and power stocks performed prominently, with Hua Hong Semiconductor rising over 10%.
  2. The three major A-share indices opened slightly lower, with the Shanghai Composite down 0.05%, the Shenzhen Component Index down 0.2%, and the ChiNext Index down 0.38%. Sectors such as non-ferrous metals and real estate led the gains, while spacetime big data, high-speed connectors, and Douyin stores topped the decliners.
  • RMB Exchange Rate:

The offshore yuan recovered to 7.26 during the session, moving away from its almost four-week low.

Corporate Updates

  • Tencent Major Shareholder Trimming:

Tencent's (0700.HK) major shareholder Naspers and its internet investment arm Prosus plan to reduce their holdings in Tencent. They disclosed that they have deposited 96 million Tencent shares into the Central Clearing and Settlement System (CCASS), representing a 1% stake in Tencent. The proceeds from this will be used for their own share buyback plan.

Japanese Economic Updates

  • Bank of Japan and Interest Rate Outlook:

Since the Bank of Japan announced its exit from the negative interest rate policy in March, market expectations for its final interest rate have been increasing. Recently, the BOJ's surprise reduction in bond buying has raised expectations for a rate hike in July, with the probability rising from 50% at the beginning of the month to around 70%.

Industry Updates

  • Precious Metals Sector:

On the morning of May 28, the precious metals sector was active. Hunan Silver rose more than 5%, Hunan Gold increased over 4%, and Western Gold, Sichuan Gold, China National Gold Group Corporation, and Xiaocheng Technology also saw gains.

  • Livestock Farming Concept Stocks:

Livestock farming concept stocks weakened in the morning session, with Biocause Pharma falling over 4%, Great Star Industrial, and Tianjin Tianyuan Veterinary Biological Products both down more than 3%, New Hope Group and Shengnong Development declining over 2%. The ETF tracking the CSI Livestock Farming Index fell by about 2%.

Bond Market Updates

  • Special Government Bond Issuance:

From 10 a.m. on May 27, China Merchants Bank and Zheshang Bank officially launched the sale of 20-year special government bonds for individual investors. The total amount of these bonds is 40 billion yuan, with a coupon rate of 2.49%, paying interest semi-annually, and repaying the principal along with the final interest payment on May 25, 2044.

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Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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