[True Insight Institutional View] U.S. PPI exceeds expectations, Stock Connect (for Hong Kong) net inflow of 14.997 billion yuan on Friday

Market Commentary

The US Producer Price Index (PPI) for January rose significantly by 2.9% year-on-year, well above the market expectation of 2.6%; it increased by 0.5% month-on-month, also far exceeding the expected 0.3%. Furthermore, the core PPI, which excludes food and energy, rose by 3.6% year-on-year, surpassing both the Wall Street forecast of 3.0% and the previous value of 3.3%. The month-on-month growth also exceeded market expectations, rising by 0.8%. This round of production-side inflation was higher than expected across the board, with the core driver mainly coming from rising service sector costs, reflecting persistent price pressures in labor-intensive sectors. Additionally, geopolitical tensions continue to escalate. After the US and Israel launched attacks on Saturday, Iran attacked several allies in the Middle East in retaliation, such as Israel. Donald Trump warned that if Iran retaliates, the US will counterattack with unprecedented force. This will drive up oil and gold prices in the short term.

Southbound Stock Connect saw a net inflow of 14.997 billion yuan on Friday. Among them, $TRACKER FUND(02800.HK)  received the largest inflow, reaching 8.385 billion HKD; followed by $HSCEI ETF(02828.HK) . $YOFC(06869.HK)  recorded the largest net outflow, at 505 million HKD; followed by Kuaishou-W (01024.HK).

Source: KGI Securities