Hang Seng Index snaps three-day freefall ahead of weekend market
The index managed to put a halt to a three-day decline, rallying 1.2% to close out the week.
Hong Kong blue-chip stock benchmark Hang Seng Index (HSI) has managed to finish a mostly bearish week on a high.
The index snapped a three-day decline on Friday 12 June 2020, as it rallied roughly 1.2% to close regular trading hours at 24260 points.
Hang Seng Index declined over 1000 points amid global correction
This week, the HSI fell over 1100 points as global equity markets moved into correction mode, with fund managers and investors everywhere looking to consolidate their profits.
As IG Asia analyst Pan Jingyi noted, US indices S&P 500 index and Dow Jones Industrial Average had led the risk-off charge, as they both chalked up massive losses this week. Each lost 5.9% and 6.9% respectively on Thursday 11 June alone, amid fears of a second wave of Covid-19 infections.
For the Hang Seng Index, Friday’s session ‘was a clear evasion to safety with all but the utilities sector having sold off’, and energy stocks at the fore, Pan wrote.
This latest correction puts an end to the Hang Seng’s recent run of good form – a two-week run that had seen the index post over 6% of gains.
Moving into the weekend, Pan postulated that near-term bullish sentiment for the Hang Seng Index ‘has finally cooled’, and that ‘the market will likely scrutinise upcoming data more closely for indications of recovery’.
Hang Seng Index: technical analysis
On a technical basis, Pan noted that the Hang Seng Index had pared some of the bullish momentum into the end of the week, with prices moving back to the earlier trading range of between 23470 and the 50% retracement level at around 24675.
Some support, she added, had also been seen with the 50-day moving average. The 50% retracement level, in particular, had posed as a strong resistance for prices after having capped gains in the past couple of months, thus rendering the latest surge in prices a false breakout.
In view of the dip, Pan concluded that ‘prices look to be returning to the sideway trade, lacking impetus in either directions at present’.
What is IG weekend trading?
IG offers weekend trading options for the Hang Seng Index and other major indices. Buy long or sell short on the Weekend Hang Seng Index over the weekend via CFDs and other instruments provided by IG's market-leading trading solution. Start trading today by opening a live or demo IG account.
IG Weekend Trading gives you access to forex, indices and cryptocurrency markets on a Saturday and Sunday. So, if news breaks about the ongoing coronavirus pandemic – or central bank measures to ease the strain on global markets are announced – you no longer need to wait until markets open on Monday to trade.
The weekend prices for indices and forex are quoted separately to their weekday counterparts, based on our view of the prospects for that market given client business and news flow. As a result, you can use these markets to hedge against risk on your weekday positions. Weekend indices and forex positions will rollover into regular weekday positions if they are kept open after the Sunday close, with any stops or limits remaining in place.
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.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets