Hong Kong stocks continue to slide as China retorts US sanctions

The Hang Seng Index is down nearly 3% this week, as US and China remain locked in a battle over the latter’s treatment of Hong Kong and Xinjiang.

What’s the latest on Hang Seng Index?

Hong Kong blue-chip stock benchmark Hang Seng Index continues an acute descend this week, two days after the US stripped the financial hub of its special trade and commerce status.

The Hang Seng plunged 1.3% within the first 90 minutes of trading on Thursday 16 July 2020. As at 12:45 HKT, the index is trading at 25,195.6, based on live IG data. The barometer is down nearly 3% this week.

IG market analysis show that ‘buys’ form 52% of all trades on the counter today, and 50% of all trades this week.

In addition, 60% of IG client accounts with open positions in this market expect the price to rise, with the remaining 40% of clients expecting the Hang Seng Index’s price to fall.

Are you looking to buy long and sell short the Hang Seng Index without having to trade the actual asset? IG’s CFD feature allows you to do just that.

China plans to ‘make necessary responses’ to US sanctions

On Tuesday 14 July, US President Donald Trump signed an executive order that overwrites the United-States-Hong Kong Policy Act of 1992, under which the US had treated Hong Kong differently from mainland China particularly in the areas of trade and commerce.

This new legislation – called the Hong Kong Autonomy Act, which also includes sanctions on senior Chinese government officials responsible for the implementation of a draconian security law in Hong Kong, meant that Hong Kong would now receive the same treatment as mainland China.

Trump had approved the bill following weeks of disputes with Beijing over its handling of Hong Kong’s affairs, alleged human rights abuse in the Xinjiang province, as well as the spread of Covid-19.

The new law, first proposed in May by the US Congress, authorises Trump’s administration to impose sanctions on any officials or institutions that have been found complicit in the ongoing subversion of Hong Kong’s autonomy.

On Wednesday 15 July, China’s foreign ministry said it ‘firmly opposes and strongly condemns’ the Hong Kong Autonomy Act, and that it plans to ‘make necessary responses to protect its legitimate interests, and impose sanctions on relevant US personnel and entities’.

What’s the outlook for Hang Seng Index?

Looking ahead, Daily FX strategist Margaret Yang wrote on Wednesday that any further escalation of US-China tensions will probably weigh on Asia-Pacific equities – including Hong Kong stocks, on top of rising virus concerns.

On a technical basis, she noted that the Hang Seng Index had found immediate support and resistance levels at 25,000 and 26,000 respectively.

Meanwhile, in terms of individual company share price movements, top losers so far on Thursday are: Geely Automobile Holdings (-6.78%); Hong Kong Exchanges and Clearing (HKEX) (-3.7%); Tencent Holdings (-3.22%); and AIA Group (-0.82%).

In terms of volume, Tencent is the most traded stock of the day on the IG platform, followed by HSBC Holdings (Hong Kong) and HKEX.

How to trade indices with IG

Are you feeling bullish or bearish on the Hang Seng Index? Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  • Create a live or demo IG Trading Account, or log in to your existing account
  • Enter <Hong Kong HS50> in the search bar and select the instrument
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 40
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
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.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices 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.