HSBC Share Price Forecast as Evergrande Crisis Mounts

Summary:
• The HSBC share price will be in the spotlight on Thursday as the Evergrande crisis moves back to the limelight.

The HSBC share price will be in the spotlight on Thursday as the Evergrande crisis moves back to the limelight. The stock ended Wednesday at 433p in London and is holding steady in Hong Kong, where it is dual listed. The shares have jumped by more than 30% from its lowest level in September.

Evergrande crisis comes back

HSBC is one of the biggest banks in the world. It is the biggest bank in Europe in terms of assets and makes most of its money in Asia. It has a strong presence in Hong Kong and China. Therefore, the share price declined sharply in September as investors remained concerned about Evergrande, the embattled Chinese developer.

The stock rebounded sharply after signs emerged that Evergrande will continue being a going concern for a while. This is after the company announced that it was selling a stake in a bank and pay some of its debts. 

It followed that by suspending its stock as it negotiated with another company that was to buy its property management unit. However, the deal did not materialize. And the Evergrande share price collapsed by more than 16% when it reopened today. HSBC shares have also risen as China home sales fall.

Therefore, with a few days remaining before the company defaults, there is a likelihood that HSBC and other Chinese banks will be in focus. 

The HSBC share price has held steady partly because of the PBOC comment that the Evergrande crisis will not have a major implication. It has also jumped because of the likelihood that central banks like the Bank of England (BOE) and the Federal Reserve (Fed) will move earlier than was expected.

HSBC share price forecast

The daily chart shows that the HSBC share price has been in a strong bullish trend in the past few weeks. The stock is trading at 433p, which is slightly below the YTD high of 455p. It has moved above the 25-day and 50-day moving averages while the MACD has been in an upward trend. The stock also seems to have formed a V-shaped pattern. 

Therefore, while the Evergrande crisis is still on, the path of the least resistance for HSBC is to the upside. This will see the shares jump by about 5% to 455p. This view will be invalidated if the shares decline below the key support at 410p.