Hang Seng Index closes at four-month high amid unrest
The Hang Index outperformed all other Asia indices, despite the commencement of a new national security law and a revival of street riots.
Hong Kong blue-chip stock benchmark Hang Seng Index rose to its highest level since 11 March 2020 at the close of Thursday’s (02 July 2020) session, despite ongoing tensions in the city.
The Hang Seng steadily rallied throughout the day, eventually hitting 25,221.4 at 16:00 HKT, based on IG data.
The index was the best performing in Asia today, gaining 2.85% on an intraday basis. Comparatively, Japan’s Nikkei 225, China’s Shanghai Composite, South Korea’s KOSPI and Singapore’s Straits Times Index grew 0.11%, 2.13%, 1.36% and 1.02% respectively.
New security law will benefit Hang Seng Index
The HSI’s strong performance today probably came at a surprise to some market watchers, with street demonstrations reignited in protest against a new security law that came into effect on Tuesday 30 June.
On Wednesday 01 July, Hong Kong police arrested some 370 protestors for their breaching of this very law. Ten of the arrested were ultimately apprehended for their involvement.
Nevertheless, the arrests appear to have had little negative impact on the index. On the contrary, some analysts interviewed by the South China Morning Post believe the security law will in fact lead to a greater inflow of Chinese investments.
Several US-listed Chinese companies, including Baidu, Weibo Corporation and Ctrip.com, are reportedly considering following in the footsteps of Alibaba, JD.com and NetEase, as they mull the possibility of secondary listings in Hong Kong.
Overseas events had more impact on the HSI
As IG market strategist Pan Jingyi noted earlier today, Asia indices had commenced the day with broad gains, taking their cue from the US indices, which recorded their best quarters in over 20 years.
Ongoing US and China political tensions stemming from the passing of the security law also did little to upset the Hong Kong stock market, as these developments were ‘well within the market expectations’, Pan added.
Meanwhile, DailyFX strategist Margaret Yang observed in a client note that another successful phase one clinical Covid-19 vaccine trial – this time from US pharmaceutical giant Pfizer and German biotechnology firm BioNTech – also helped to set an optimistic tone for the day.
She added that better-than-expected manufacturing data coming out of the US, China and Southeast Asia earlier this week had also suggested that a stronger initial output recovery than initially thought.
‘This helped to paint a rosy view of the global recovery. However, the road ahead may remain bumpy with virus uncertainties and a complicated US-China debate over Hong Kong,’ Yang wrote.
Looking ahead, investors are now focused on US’ June 2020 non-farm payrolls. The consensus estimate is for 3.06 million jobs to be added, versus May’s actual figure of 2.5 million.
Hang Seng Index's top gaining stocks: Tencent, AIA, HSBC
The top gaining stocks on the Hang Seng Index this Thursday include: Hong Kong Exchanges and Clearing Limited (+6.06% in share price); China Mobile (+4.21%); Tencent (+3.99%); Ping An Insurance (+3.4%); AIA (+3.32%); and HSBC Holdings (+3.04%).
Only four stocks declined on Thursday, and they are: CSPC Pharma, Techtronic Industries, Hengan International, and Shenzhou International.
How to trade Hang Seng Index with IG
IG offers trading options for the Hang Seng Index and other major indices. Buy long or sell short on the Hang Seng Index (including over the weekend) via CFDs and other instruments provided by IG's market-leading trading solution.
To take a position, follow these simple steps:
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.
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