The Hang Seng Index (HSI) performed strongly on Friday, recovering from Thursday’s losses and hitting a weekly high. Although the performance of external markets remained weak overnight, the interest rate cut announced by the People’s Bank of China today boosted investor sentiment. From a technical point of view, the Hang Seng Index (HSI) has returned to the top of the 20-day moving average, and there is a chance to rise to resistance levels such as 21000 and 21300 in the future.
Hang Seng Index (HSI) rises, recovering yesterday’s losses, boosted by China’s central bank rate cut
Federal Reserve official George said overnight that the recent turmoil in U.S. stocks was to be expected and reflected the impact of monetary policy tightening. U.S. Treasury Secretary Yellen also said not long ago that “the stock market is currently selling off, but the U.S. financial system is still functioning in an orderly manner, and the valuation of some assets is still high relative to historical valuation levels.” These actually reflect the official attitude of the United States to the decline of the stock market – not worried about the current decline of US stocks.
The decline in U.S. stocks eased on Thursday, but the performance was generally weak. The S&P 500 fell 0.58% on Thursday, the Dow fell 0.26% on Thursday and the Nasdaq fell 0.26% on Thursday.
Hong Kong’s Hang Seng Index (HSI) was not weighed down by external markets such as U.S. stocks on Friday, as China’s central bank updated its bullish policy for stocks. According to the announcement of the People’s Bank of China, the one-year loan market quoted rate (LPR) remained unchanged at 3.7%, and the five-year LPR was reduced by 15 basis points to 4.45%.
The Hang Seng Index (HSI) gapped up 1.8% in early trading on Friday as the news of the central bank’s interest rate cut was announced before the Hong Kong stock market opened, and then moved higher to close up 2.96%. In addition, the Hang Seng Technology Index rose 3.74%. China’s A-share market also strengthened, with the Shanghai Composite Index closing up 1.6% on Friday.
Among Hang Seng Index constituents, 64 advanced, 2 declined and 0 were unchanged. The top three top performers were: WuXi Biologics, up 7.85%; China Merchants Bank, up 7.32%; and Sunny Optical Technology, up 7.31%. The top three constituent stocks behind the performance were: Country Garden Services, down 0.81%; Techtronic Industries, down 0.61%; Hang Lung Properties, up 0.28%. The major heavyweights performed as follows: Tencent Holdings rose 3.53%; Alibaba rose 5.64%; China Construction Bank rose 2.19%.
Hang Seng Index (HSI) Trend Technical Analysis
The daily chart shows that the Hang Seng Index (HSI) rebounded strongly back to the top of the 20-day moving average (20300) on Friday, opening up space for further rebounds, which may rise to 21000 and the early shock high of 21300. If it falls, the 20300 line will be the initial support, and it will test 20000 again after falling below. (Follow the author on Twitter @Legen_DailyFX )
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