Hang Seng Resilient Despite Fed Bets
29 May 2023
For the Hang Seng, this week has begun positively. Fed bets re-pinned the HSI despite the debt ceiling news being supportive.
This morning, the Hang Seng gained 0.29 percent. While the announcement of a debt ceiling agreement pleased markets, the likelihood of a more aggressive Fed interest rate trajectory limited the gains.
Ten Cent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) both experienced advances of 1.49% and 0.38%, respectively, when looking at the key components.
Bank stock trading in the morning was mixed. The Industrial and Commercial Bank of China (HK:1398) fell by 0.24% while HSBC Holdings PLC increased by 0.51%. Early trade for China Construction Bank (HK: 0939) was flat.
China’s economy grew 8.1% in the first quarter of 2023, beating expectations. The growth was driven by strong exports and investment.
The US and China are reportedly close to a deal to ease trade tensions. This could boost investor sentiment and lead to higher stock prices.
Oil prices are rising on concerns about supply disruptions. This could boost the profits of energy companies in Hong Kong.
Here are some of the factors that could affect the HSI in the near future:
The outcome of the US-China trade talks
The pace of economic growth in China
The price of oil
The performance of the global stock market
HANG SENG TECHNICAL ANALYSIS DAILY CHART:
Hang Seng is currently trading in the down channel.
Hang Seng is currently trading below all SMA.
RSI is in the selling zone which suggests bearishness and Stochastic is suggesting a downtrend.
Immediate resistance is at 18802 & its immediate support level is 18461
HOW TO TRADE HANG SENG IN THIS WEEK
The Hang Seng is trading in a downward channel and has previously broken both a key support zone and the lower low structure that followed. The price is once again trading at a key support level; if this level breaks down, further declines are to be expected.