- Summary:
- Hang Seng Index rose 0.75% on Thursday as the Asian equities joined the global stock rally. On high timeframe HSI remains in a downtrend.
Hang Seng Index opened about 1% higher from yesterday’s close after the US Federal Reserve announced no change in the interest rates. However, the chairman of the Fed still hinted towards a possible rate hike in the future if it deems necessary.
Alongside the somewhat dovish approach adopted by the US Fed, the Hong Kong Monetary Authority also maintained its base interest rate of 5.75% to encourage more spending in the economy. The HSI index has been in a downtrend since the start of this year as the Hong Kong benchmark index sits 23.6% under its yearly high of 22,526 points.
On Tuesday, the PMI for the Chinese manufacturing sector dropped to 49.5 in October, which is down from last month’s 50.6 as the demand for Chinese exports fell for the fourth consecutive month. Furthermore, the results of a private survey also pointed out the manufacturing sector’s performance is not up to the mark despite reporting an improved GDP in the third quarter.
Bruce Peng, an analyst, blamed the eight-day Golden Week National Day holiday for downbeat October’s PMI figures. Additionally, analysts predict a further decrease in production numbers for the manufacturing sector by the end of 2023.
On Thursday, the Hang Seng Index closed the Asian session at 17,230 points and gained 0.75% on the daily time frame.
Hang Seng Index Forecast
The HSI chart shows that the benchmark index has been trading under a downward trendline since January 2023. The bulls were able to break above the trendline in August for a short period before the index got dragged back below.
The chart also reveals a critical support level at 16,831 points which previously resulted in a 34% bounce back in November 2022. The Hang Seng Index forecast needs to hold its 16,831 points support level.
The bulls are expected to push the index to retest the 18,275 points resistance level in case of a breakout from the downtrend in the coming weeks.
HSI Chart & Technical Analysis
