- Summary:
- The Hang Seng index rose sharply today boosted by the Tencent share price. This is after the company announced significant success of its gaming franchise
The Hang Seng index is the best-performing major index in Asia today. Up by more than 0.75%, the index has outperformed the Shanghai composite and the Nikkei 225, which have gained by 0.05% and 0.60% respectively. The blue-chip Hong Kong index is trading at $24,690.
Hong Kong stocks gain on recovery optimism
The Hang Seng index gained because of optimism that the world would recover. The rally followed the gains made in the United States, where the Dow Jones, S&P 500, and Nasdaq indices rose by more than 0.50% yesterday.
The momentum of the Hang Seng index accelerated after Donald Trump sent a tweet clarifying what Peter Navarro had said. In an interview in Fox News, the economic official said that the trade deal signed in January was “over.” In the tweet, Trump clarified that the deal was still in place and that he hoped that China would comply.
In recent days, there have been concerned about a second wave of coronavirus. This is after new clusters of the disease started to emerge in countries like China, Brazil, and the United States. In the US, the number of new infections rose by more than 25,000 on Sunday.
Tencent share price leads the Hang Seng
Tencent, the global technology company, is the best-performing stock in the Hang Seng today. It has gained by more than 4%, extending its double digit gains this year. This is after the company made several investments.
For example, it invested in Nio, the electric car company that competes with Tesla. The company also invested in iQiyi, a leading streaming company in China. Investors believe that these investments will help it continue its growth.
Also, the company announced that its new game, Brawl Stars had become increasingly popular. The game made the company more than $17.5 million in the first week alone.
Tencent share price is trading at $495.
Top movers in Hong Kong
Apart from Tencent, other top movers in the Hang Seng are Sino Biopharmaceutical, Want Want China, HKEX, Citic Pacific, and WH Group. These shares have jumped by more than 1%. On the other hand, the worst performers are China Shenhua Energy, AAC Technologies, Swire Pacific, and Link Real Estate.
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Hang Seng technical analysis
On the daily chart, the Hang Seng index is trading along the 100-day exponential moving averages. It is also moving in an upward trend, which is shown by the ascending pink trendline. This line connects the lowest levels on May 25, June 15, and the today’s low of $24,267. As such, a move above the 100-day EMA at $24,778 will see the index continue rising as bulls attempt to test the 50% retracement at $25,168.
On the flip side, a move below $24,208 will invalidate this prediction. This price is along the ascending trendline, today’s low, and the 50-day EMA.