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. See full non-independent research disclaimer and quarterly summary.
All eyes will be watching out for how events will unfold and have an impact on the Hang Seng, which is now at its lowest level in three months.
High on the list of factors will be the decision by China tourism board to suspend the approval of new visas for mainland tour groups to Hong Kong.
Chinese tourists made up three quarters of the 54 million visitors to Hong Kong last year, and group tours account for between 8% - 10% of Chinese visits, according to a Bloomberg report.
That’s likely to weigh down further on sentiment over retail and tourism-related stocks, which have been bearing the brunt of the sell-off so far.
The cap on the inbound tourists adds to the woes of retailers, who have been forced to close some of their doors in key commercial areas.
Some stocks likely to come under pressure are luxury retailer Prada, and jewellery chains Chow Tai Fook and Chow Sang Sang. Shares of casino resorts Galaxy Entertainment and Sands China are also expected to continue their slide.
Sands China is currently on a downtrend and the bearish outlook is likely to see the downward bias remain. This stock could likely test the June 2013 low of $35.35 as a support level. The 61.8% Fibonacci retracement at $47.27 will be a future resistance level to watch out for.