Hang Seng Index recorded the new low of the year
The Hang Seng Index recorded a new low of 2023 following the worst week in three months.
Hang Seng tumbled below 20000
The week behind us was not a great time for the Hang Seng index. Hong Kong-listed stocks fell by over 6%, the worst weekly loss since October 2022.
China’s 5% economy target is the early trigger for the fall. The Chinese government set a relatively conservative economic growth target to douse the hope that the top policymakers will provide extra fiscal or monetary stimulus this year.
Later in the week, China’s consumer price index (CPI) disappointed investors again. The 1% increase in February missed the forecasted 1.9% by a wide range, promoting the question about China’s recovery journey. In addition, the out-of-factory price (PPI) delivered another surprise by falling 1.4%, further down from a 0.8% drop in January.
Out of China, the collapse of Silicon Valley Bank (SVB) acerbated the downtrend, pushed the Hang Seng Index below 20000 and recorded a new low in 2023.
Despite US regulator’s fast action to step in and the liquidity was provided to support the small banks, the global financial stocks still lost $465 billion in market value in four days. Not only the banking sector was in panic selling mode, investors were rushing to cut exposure from Wall Street to Asian markets in the wake of the biggest bank collapse since the financial crisis.
Hang Seng index plunged by 3.04% on Friday (March 10th), the worst day of the year. Over the week, the Hang Seng tech index lost 10.19% and entered a bear market.
Hang Seng Index Technical Analysis
From a technical viewpoint, the Hang Seng index is currently sitting on the 200-days moving average, which is now providing the support to stop sliding towards 19248. If this area of support is breached, the index will move to retest the resistance-to-support trendline created in the previous month at 19187, with the new focus on the key psychological level at 19000.
On the flip side, if the index stages a bullish comeback, resistance appears near the 19704 level where the February low sits.
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