Hang Seng extends recovery despite China's economic turmoil
Hong Kong saw the Hang Seng Index jump more than 2.70% on Friday, the best gain in two weeks.
The Hang Seng and China's stock market returned from the long weekend with the risk-on sentiment as global investors await the US consumer price data for August.
Hang Seng weekly review
Hong Kong stocks made a spectacular recovery after plummeting for weeks. Falling to the five-month-low last Wednesday, the Hang Seng Index jumped more than 2.70% on Friday, the best day in two weeks.
Chin's CPI On September 9th, China reported its consumer prices for August. Prices rose at a slower-than-expected pace and an 18-month-low reading for producer inflation. The CPI increased 2.5% from the same month a year earlier, slower than 2.7% in July and the 2.8% average forecast. The reading was in line with the ascending prospect that the world's second-largest economy has been plagued by weakening domestic demand as the country continues to commit to its zero Covid policy.
On the bright side, a lower inflation print is leaves more room for the People’s Bank of China to further ease its monetary policy, going in the opposite direction to most developed countries, in order to support local economic growth.
Hang Seng technical analysis
Despite last week’s strong rebound, the Hang Seng Index is still placed below the 20-day SMA, which could hold as resistance for the near term. Looking at the bigger picture, the downtrend stays enacted as illustrated in the sliding trajectory. If the momentum remains, a breaking higher will see the price retest the 50-day line near the 20000 key mark. However, in the event of a backfoot, key support appears to 19158, where the May low sits.
This information has been prepared by IG, a trading name of IG Markets 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.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets