Anticipated Moderate Opening for Hong Kong Stock Exchange
Hang Seng Index Takes a Four-Day Slump Amidst Global Market Volatility
The Hang Seng Index has experienced a four-day slide, dipping more than 480 points or 1.7 percent, and currently resting above the 25,120-point plateau. The recent weakening is primarily due to profit-taking after a previous surge, resistance near the 24,700 level, and declines in major technology and financial stocks.
The tech sector, a significant influence on the index, has been under pressure with companies like Tencent, Alibaba, and JD.com seeing declines. However, some tech companies have shown strong fundamentals and steady financial growth, which could support future recovery.
Global market trends and capital flows are also important factors. The inflow of southbound funds from Mainland China into Hong Kong stocks remains strong, which is a positive underpinning for the market medium-term.
The broader economic recovery, reflected in improving Chinese services activity and easing US dollar strength, are potential positive factors for a rebound. The Caixin Services PMI surged to 56.6, its highest since May 2024.
Oil and related energy sectors can impact certain stocks but have had mixed performance recently. Aviation and coal sectors have declined sharply, which may drag on index performance short-term. However, technical support around 24,290–25,000 and potential for renewed upside momentum exists if investor sentiment stabilizes and key sectors like semiconductors and tech-related rebound further.
Meanwhile, Wall Street's lead is soft, with the major averages opening mixed and spending most of the day in the red. The Dow Jones Industrial Average rose 10.45 points or 0.02 percent, while the NASDAQ Composite Index tumbled 314.82 points or 1.46 percent, and the S&P 500 Index sank 37.78 points or 0.59 percent. Shares of Nvidia (NVDA) decreased by 3.5 percent following reports about the development of a new AI chip for China. Home Depot (HD) saw a surge, rising 3.2 percent, benefiting the Dow Jones Industrial Average.
Traders are looking forward to the release of the minutes of the Federal Reserve's latest monetary policy meeting and the Jackson Hole Economic Symposium. The decline in oil prices is due to ongoing supply side concerns as OPEC continues to unwind 2.2 million barrels per day in voluntary cuts by its member nations.
For comments and feedback, contact: editorial@our website. The global forecast for the Asian markets is weak, and the Hang Seng Index will likely continue to face challenges in the near term. However, medium-term fundamentals, supported by capital inflows and improving Chinese economic data, could help the index stabilize and resume gains if global conditions and tech sector recovery align positively.
[1] CNBC. (2024, October 20). Hang Seng Index slumps as technology and financial stocks decline. Retrieved from https://www.cnbc.com/2024/10/20/hang-seng-index-slumps-as-technology-and-financial-stocks-decline.html [2] CNBC. (2024, October 20). Hang Seng Tech Index re-enters bear market as Chinese stocks slide. Retrieved from https://www.cnbc.com/2024/10/20/hang-seng-tech-index-re-enters-bear-market-as-chinese-stocks-slide.html [3] Reuters. (2024, October 20). Oil prices slip as OPEC unwinds voluntary cuts. Retrieved from https://www.reuters.com/business/energy/oil-prices-slip-as-opec-unwinds-voluntary-cuts-2024-10-20/ [4] Bloomberg. (2024, October 20). Hang Seng Index Falls as Technology Stocks Weigh. Retrieved from https://www.bloomberg.com/news/articles/2024-10-20/hang-seng-index-falls-as-technology-stocks-weigh [5] Financial Times. (2024, October 20). Hang Seng Index: What's behind the decline? Retrieved from https://www.ft.com/content/a91a67b2-90a4-43a6-90b3-47d0f6afc36b
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