All three major U.S. stock indexes saw declines of over 1%. Banking stocks experienced a widespread drop. Fitch Ratings warned of potential downgrades for dozens of U.S. banks. Concerns about global economic growth prospects dampened market sentiment. Strong July retail sales data in the U.S. reinforced the possibility of the Federal Reserve continuing to consider interest rate hikes.
U.S. Stocks
Fundamental Analysis:
Data released by the U.S. Department of Labor on Tuesday indicated a 0.4% increase in import prices, surpassing expectations of 0.2% and reversing the previous -0.1%.
Import prices for goods in the U.S. have risen after several months of decline. The main driver was a rise in fuel import prices, with a 3.6% increase in July following a modest rise in June. Notably, finished petroleum prices surged by 3.5%. Additionally, import prices for capital goods, food, feed, beverages, and automobiles all rose.
Amid concerns about global economic growth, the mood in the U.S. stock market remained subdued. Large technology stocks fell across the board, with Tesla and Amazon dropping over 2%, and Facebook, Apple, and Google falling over 1%. Netflix and Microsoft experienced slight declines.
Banking stocks also saw a general decline, with Bank of America leading the way with a drop of over 3%. JPMorgan Chase, Wells Fargo, and American Express also fell over 2%, with the former experiencing the fourth-largest decline among Dow Jones Industrial Average components.
Citigroup dropped over 2%, while Goldman Sachs, Morgan Stanley, and Berkshire Hathaway Class B shares all dropped over 1%. Prior to this, an analyst from Fitch Ratings warned that the U.S. banking sector was approaching the beginning of another period of turbulence, potentially resulting in comprehensive downgrades for dozens of U.S. banks, including major ones like JPMorgan Chase.
Technical Analysis:
(S&P 500 Index, 1-day chart)
Market Trends:
- Dow Jones Industrial Average dropped 361.24 points, a decline of 1.02%, closing at 34,946.39 points.
- Nasdaq Composite fell 157.28 points, a decline of 1.14%, closing at 13,631.05 points.
- S&P 500 Index dropped 51.86 points, a decline of 1.16%, closing at 4,437.86 points.
Hong Kong Stocks
Fundamental Analysis:
All three major Hong Kong stock indexes experienced declines, with the Hang Seng Index (HSI) impacted by a significant drop in U.S. stocks.
The HSI dipped as low as 18,314, a decline of up to 221 points, before recovering some ground to close with a drop of 175 points.
In the morning session, the HSI initially dropped 224 points but later narrowed the decline to 140 points, closing at 18,440. The persistent weakness continued, reaching a low of 18,304, a decline of up to 276 points, marking a five-week low.
In terms of sector performance, technology and internet-related stocks declined, with Baidu, Inc. (9888.HK) dropping over 3% and companies like Kuaishou Technology (1024.HK), Alibaba Group Holding Limited (9988.HK), Meituan (3690.HK), and Tencent Holdings Limited (0700.HK) also falling.
Property development and property management stocks rebounded, with companies like China Vanke Co., Ltd. (2202.HK) and China Evergrande Group (3333.HK) rising over 4%, and Country Garden Services Holdings Company Limited (6098.HK) gaining over 6%.
However, automobile stocks showed a lackluster performance, with NIO Inc. (9866.HK) dropping over 5% and XPeng Inc. (9868.HK) falling nearly 7%.
Newton Resources Ltd (1231.HK) announced a $500 million strategic investment plan, with the source of funds remaining uncertain.
The film and television sector led the gains, with Starlight Culture Entertainment Group Limited (1159.HK) surging nearly 4%. Chinese brokerage stocks displayed active growth.
Technical Analysis:
(Hang Seng Index, 1-day chart)
Market Trends:
- Hang Seng Index (HSI) dropped 1.39%, closing at 18,323.22 points.
- Hang Seng Tech Index (HSTECH) fell by 1.28%.
- Hang Seng China Enterprises Index (HSCEI) fell by 1.36%.
FTSE China A50 Index
Fundamental Analysis:
In early trading, the three major A-share indexes in China opened lower. The ChiNext Index initially rose and turned positive, while the Shanghai Composite Index and Shenzhen Component Index oscillated weaker after the opening hour, then rebounded before noon to briefly turn positive.
The combined trading volume for the Shanghai and Shenzhen markets was 4432.32 billion yuan, with net outflows of 3.725 billion yuan from northbound funds. A total of 27 stocks hit their daily trading limit (including ST stocks), while 2 stocks hit their downside limit.
In terms of industry sectors, real estate development, real estate services, securities, building materials, and diversified finance led the gains, while electrical machinery, gaming, computer equipment, shipbuilding, and automobile parts led the losses.
In terms of themes, brokerage concepts, prefabricated construction, dairy industry, new urbanization, spacetime big data, and financial technology were relatively active.
Technical Analysis:
(SSE Composite Index, 1-day chart)
Market Trends:
- Shanghai Composite Index (SHCOMP) fell by 0.25%, closing at 3,168.32 points.
- Shenzhen Component Index (SZCOMP) fell by 0.22%, closing at 10,655.8 points.
- ChiNext Index (CHINEXT) fell by 0.03%, closing at 2,148.04 points.
- SSE STAR Market 50 Index (SSE50) fell by 0.53%, closing at 912.61 points.
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