CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Asian market erased all the gains this year as Powell confirmed March rate hike

Although the narrative of four rate hikes in a year has been fermenting since the start of 2022, the speech by Powell doused any remaining hope.

One of the most discussed questions of 2022 finally got an answer. In the first FOMC meeting of the year, Jerome Powell said that the Fed is ready to raise rates in two months and shrink its bond holdings as the inflation proves to be the hottest in a generation. The chair also declined to rule out quantitative tightening and warned there's a risk of a prolonged period of surging prices.

Although the narrative of four rate hikes in a year with up to 50 bps for the first time has been fermenting since the start of the new year, the speech by Powell doused any remaining hope.

What’s Quantitative Tightening (QT)

Quantitative tightening is a contraction monetary policy applied by a central bank to decrease the amount of liquidity within the economy. In other words, the policy is the reverse of quantitative easing, aimed to increase money supply in order to "stimulate" the economy.

Since the pandemic commenced in early 2020, nearly all the global central banks are applying quantitative easing monetary policy to prevent the economic recession, which is also believed to be the key drive underlying the booming of the equity market for the past two years. S&P 500, for example, has grown by 91.6% from April 2020 to Dec 2021.

As a result, the introduction of quantitative tightening is unsurprisingly triggering the panic selloff across the equity market as the liquidity, viewed as the “petrol” for the equity market’s ongoing growth, will be negatively impacted.

Asian market fell unanimously on Thursday lead by Hang Seng Tech index dived by over 4%.

Hang Seng

  • Hang Seng dropped more than 2% today at the open
  • The index has walked sideway from its encouraging upward trajectory since early this year
  • Next support will be its 50-days moving average, around 23703, which if broken, will bring the price to 23474 and erased all the gain for this year.
  • 24700 will be the next test and key resistance should Hang Seng aiming to move back to its previous moving channel.

Hang Seng Tech

  • The four hours chart shows the index is falling below all the major moving averages.
  • A shape of “double head” has been clearly formed, suggesting the overturn of momentum should be in view.
  • Next support will be looking at the low from Jan 6th, which is also the floor level for Hang Seng Tech during the past 18 months.
  • Multiple layers of resistance for Hang Seng Tech include 20 and 100-days moving average and the bottom level between the “double head”, around 5600.

Taiwan Index

-Taiwan stock suffered the biggest drop since October 2021 and broken through the ascending moving band formed since then.

-The drop from the past two weeks has evaporated all the gains since early December.

-Currently supported at 17014, the low from Nov 27th. Next support will be eye on 16931.

-RSI reached its lowest level since Oct 6th.

Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.