Hong Kong's Hang Seng Index fell more than 2% on the increase of jobless rate, the downgrade of credit rating and the decline of U.S. Futures. At the same time, China's Shanghai Composite Index was down around 1%. As the Mainland China stocks weighted more than half in Hang Seng Index, it suggests that Hang Seng Index is relatively under-performed today.
Let's take a look for the recent new. Hong Kong's jobless rate rose to 4.2% in the January-March period (4.0% expected) from 3.7% in the prior period, according to the government. Besides, Hong Kong's credit rating was downgraded to "AA-" from "AA" at Moody's, outlook "Stable". The rating agency stated: "After prolonged social unrest in 2019, Hong Kong's economy is facing a second major shock from the emergence of the COVID-19 pandemic in January. (...) After prolonged social unrest in 2019, Hong Kong's economy is facing a second major shock from the emergence of the COVID-19 pandemic in January."From a technical point of view, the outlook of Hang Seng Index would be bearish on a 30-minutes chart. Firstly, the prices broke below rising trend line drawn from March low. In addition, the prices have broken the neckline and identified a bearish double top pattern. Therefore, unless today's open price at 24240 is violated, the index would consider a further decline to 38.2% retracement at 23320 and 50% retracement at 22900 in extension.
Source: GainCaptial, Tradingview
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