Hang Seng Index has had a tough few weeks, including dropping to its lowest level since February 2016. The drop also resulted in the Index trading below 20,000 for the first time since 2016.
Today, the prices have slightly recovered, and the index is trading above 21,000. The recent growth has partly been fueled by China’s concessions meant to improve Sino-US cooperation. Without the concessions, there were worries that the trading relationship between the two countries would deteriorate. There was also fear that Chinese companies listed in the US would get deregistered. Such actions would have affected the Hang Seng Index, resulting in a price fall.
The current drop in the Hang Seng index is likely due to recent Covid-19 numbers being released by the Chinese government. This is after the country imposed some of the strongest Covid-19 lockdowns amid record-breaking covid cases in the region.
Looking at the daily chart below, we can see the prices are on a bullish recovery after recording a six-year low on March 15. The chart also shows that, since then, the prices have increased by 20 per cent and are currently trading at the 21800 level.
In today’s trading session, the prices have dropped by more than a percentage point. This is also a second consecutive trading session in that the prices are bearish. The prices are also trading within a long-term descending channel.
Despite recent fears that the Covid-19 lockdowns in China will result in Hang Seng Index falling, based on the chart below, the prices are likely to continue with the bullish trend. There is a high likelihood that the prices will hit the upper trend line of the channel. Although today’s prices are declining, I expect a recovery in the next few trading sessions and the prices to resume the bullish trend.
This post was last modified on %s = human-readable time difference 14:53