The Hang Seng index rallied for the second straight day as Hong Kong leader, Carrie Lam, drew parallels of the ongoing protests. The index is up by 70 basis points to $23,904, which is the highest it has been in almost 2 weeks.
Hong Kong has been under pressure for two years following the increased unrest in the city. The city’s police officers have also been accused of being incredibly harsh to protestors who were demonstrating against increased Chinese influence. In response, the US sent significant warnings on the leaders.
Just last week, the US warned that it would revoke the city’s special relationship with the US. This happened after China passed a controversial security law, bypassing Hong Kong’s basic law.
Now, as riots intensify in the United States, Hong Kong leaders are reacting. In a statement made earlier today, Chief Executive Carrie Lam, criticised the United States for its unfair treatment of the city. She said:
“There are riots in the United States and we see how local governments reacted. And then in Hong Kong, when we had similar riots, we saw what position they adopted.”
Investors are also optimistic about the recovery of the city. Just yesterday, data from China showed that the manufacturing sector was recovering. The manufacturing PMI came in at above 50, which is usually a sign that the economy is recovering. These numbers imply that the measures put in place by the Chinese to limit the virus from spreading are working.
Most companies in the Hang Seng were in the green today. The best-performing was Link Real Estate, whose shares rose by more than 6%. It was followed by CSPC Pharma, whose shares rose by 4%. Other big gainers were AIA Group, CK Infrastructure, Swire Pacific, HKEX, and Ping An Insurance.
On the other hand, the worst performers were China Unicorn, WH Group, China Petrol and Chemicals, Sunny Optical, and Hengan International Group.
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The Hang Seng index rose for the second straight day. As it did this, it moved above the important resistance level of $23,500 that I had mentioned a week ago. The price is now slightly below the 38.2% Fibonacci retracement level and the 50-day exponential moving averages. Therefore, the upward momentum may continue as bulls target the 38.2% Fib level of $24,220.
On the flip side, a move below – the now support – of $23,500 will signal that there are more sellers in the market, who will be keen on pushing the price lower.