While HSBC struggles due to pressure from Ping An, Hong Kong stocks decline on weak corporate earnings.
Stocks in Hong Kong fell on worries that corporate profits are lagging the region’s overall economic recovery, which puts pressure on policymakers to provide a bigger dosage of stimulus. In response to recommendations to restructure its Asian business, HSBC reversed a 1% loss.
At the end of the trading day, the Hang Seng Index fell 0.6% to 19,959.94, breaking over the 20,000 marks for the first time since March 28. The Shanghai Composite fell 0.8% and the Tech Index declined 0.2%.
Tencent fell 1.2% to HK$345 while Tencent Group fell 1.2% to HK$86.90. Operator of Macau casinos Sands China saw a 1.2% decline to HK$29.10. Li Ning, a manufacturer of athletic gear, down 3.6% to HK$56.90, and Country Garden, a developer, fell 2.4% to HK$2.06.
The city’s benchmark index was supported by gains of 3.4% to 4.9% in Alibaba Health, CSPC Pharmaceuticals, and BYD.
Following several efforts to limit shipments of cutting-edge chip-making equipment to Chinese companies, stocks also fell as investors grew concerned about the escalating tech rivalry between China and the West. Politico was among the media outlets to report that additional limitations are being considered.
As a result of a verbal exchange with Ping an Insurance (Group), HSBC lost as much as 1.1% of its value before ending the day unchanged at HK$55.95. The UK lender is under pressure from the Chinese insurer, which is its largest corporate stakeholder, to restructure and list its Asian operations to increase value for investors.
Elsewhere, property stocks fell, with 11 of the Hang Seng Property Index’s 13 components losing ground. China Resources Land dipped 1.6 percent, while Long for Group fell 2.4%, to HK$36.85.
HANG SENG TECHNICAL ANALYSIS DAILY CHART:
Hang Seng is currently trading in down channel.
Hang Seng is currently trading below all SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting down trend.
Immediate resistance is at 20145 & its immediate support level is 19887
HOW TO TRADE HANG SENG IN THIS WEEK
Hang Seng was moving higher until it faced resistance, at the point when the price reversed and started to slide lower. Price is currently at an important support level; if it breaks below that level, further downside is possible.