The Hang Seng index attempted to pare back some of the losses it encountered yesterday. The index is up by more than a percentage point but is still below the yesterday’s open of $24,659. The real estate sector is the best-performing category in the index. Indeed, 7 of the ten top stocks in the Hang Seng today are from the sector.
The Hong Kong real estate sector was the best-performing category of the Hang Seng index. The sector has gained significantly mostly because of the hopes that the world has moved past the coronavirus pandemic.
Another important factor is that the sector has already embraced the national security law that was passed by China a week ago. Players in the industry believe that the law will bring more stability to the city in a time when protests are increasing.
In fact, some of the wealthiest players in the sector have come out to embrace the law. Today, Michael Kadoorie, a real estate tycoon said that the law was in the public interest. He asked the government to convince the public to back it up. Other real estate tycoons including the influential Li Ka Shing have supported the law. Other companies that have embraced it are HSBC and Standard Chartered.
The index also soared after it emerged that more countries were starting to ease travelling. Mainland China has said that it will allow flights from other countries. This could see more business activity in he city.
Real estate firms dominated the Hang Seng index today. New World shares rose by more than 4.50%. Other top performing firms were SHK, Swire Pacific, CK Asset, Wharf Real Estate, Henderson Land, and China Resources Land. The non-real estate best performers were Hang Seng Bank, China Unicorn, and Sunny Optical.
There were just 9 laggards in the index. These were China Mengniu Dairy, Hengan International, Tencent, CSPC Pharma, China Shenhua Energy, CLP Holdings, and Galaxy Entertainment.
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The Hang Seng index is trading at $24,588. On the daily chart, the price is slightly above the 38.2% retracement and the 50-day EMA. It is also slightly below the 50% retracement. With the index being in a long-term bullish trend, there is a possibility that bulls will attempt to test the 50% retracement at $25,168.
On the flip side, a move below $24,000 will invalidate this trend. This is an important psychological level that is also slightly below the 38.2% retracement.