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HSBC share price is up by 0.70% in London today as investors react to the recently-passed Brexit deal. The stock is trading at 381.25, which is 10% below the 2020 high of 427p. Other banks are struggling, with Barclays, Lloyds, and NatWest dropping by more than 0.70%.
What happened: HSBC share price had a difficult 2020 as the company became a victim of the rising animosit between the United States and China. The firm was among the biggest companies to voice its support for the Hong Kong Security Law.
It was also mentioned as being in a list of China entity firms and companies that help fund illegal activities. Further, like all banks, HSBC also suffered because of the large bad debt provisions because of the coronavirus pandemic.
As a result, HSBC stock price dropped by more than 36% in 2020. Still, it has bounced back by 35% from its 2020 low of 281p.What about Brexit: HSBC share price is outperforming other UK banks because of Brexit. That’s because, unlike banks like NatWest and Lloyds, it has vast of business in Asia, which is one of the fastest-growing regions. UK banks are struggling because the EU and the UK have not yet reached an agreement the financial sector.
Looking at the daily chart, we see that HSBC is trading between the 200-day and 50-day exponential moving averages (EMA). The two averages have struggled to do what is known as a golden crossover. The Relative Strenth Index (RSI) has also moved from the overbought level of 77 to the current 43.
Therefore, in the near term, the shares will possibly continue falling as bears aim for the support at 350p. However, in 2021, if the US and China relations improve, the shares will possibly rise to 500p.
