Indices News

The Hang Seng is wavering today as traders reflect on the rising number of coronavirus cases in Hong Kong. The index is trading at $24,788, which is slightly higher than the yesterday’s low of $24,670. Other indices in Asia are mixed too, with the Shanghai composite gaining by more than 1.40% and the Nikkei 225 gaining by more than 1.13%. In Australia, the ASX 200 has dropped by about 0.15%. Hong Kong hotels in trouble The Hang Seng index is reacting to news that many Hong Kong hotels are in distress because the pandemic and last year’s protests has robbed them income. In a statement, the Federation of Hong Kong Hotel Owners, a lobby group, asked the government to waive rates for the next three quarters. The lobby represents more than 200 hotel companies in the city. They said that because of the pandemic, they are operating at a loss because of the fewer number of tourists coming in. In a statement, William Cheng, a hotel investor who has 7 properties said that before the unrests, an average hotel would generate a net profit about H$50 million every year and pay about H$2.5 million in taxes. This is an important issue for Hong Kong and the Hang Seng because many hotels lease their properties from companies in the index. Also, the sector employs thousands of people in the city. As a result, a closure of many hotels risks adding more pressure to Hong Kong properties. Hong Kong coronavirus cases rise The Hang Seng is also reacting to the rising number of coronavirus cases in the city. Health officials confirmed more than 100 infections yesterday even as Carrie Lam warned that the city was on the verge of a “large-scale community outbreak.” She warned that the new cases risked putting a lot of pressure to the hospital system. Meanwhile, FedEx pilots have asked the company to suspend flights to the city because of the rising cases. Top movers in Hang Seng Half of the companies in the Hang Seng are in the red today. The biggest decliner is Tencent Holdings whose shares have dropped by more than 1.6%. It is followed by Sino Biopharmaceutical, Techtronic Industries, PetroChina, and China Petrol and Chemicals. On the other hand, the top movers in the index are Geely Automobile, Hang Lung, CK Asset, and HSBC, whose shares have jumped by more than 1.8%. Hang Seng index technical analysis The Hang Seng index is trading at $24,797. On the daily chart, the index is slightly below the 100-day and 50-day exponential moving averages. It is also below the ascending trend line that is shown in purple. Further, the index is between the 38.2% and 50% Fibonacci retracement levels. This retracement joins the highest and lowest points in the index. The index is also in a downward trend, as evidenced by the pink line. As a result, the downward trend will likely continue as bulls target the next support at $24,229. On the other hand, a move above the psychological level of $25,000 will invalidate this trend. Hang Seng forecast