The Hang Seng index had a difficult first quarter as the world reacted to the invasion of Ukraine, Hong Kong’s lockdowns, and hawkish central banks. The HSI index initially dropped to a low of H$18,251 and then made a strong recovery to the current level of H$22,000. Let us look at the first quarter’s best and worst-performing Hang Seng constituents.
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Waiting for a Breakout
Oil and gas companies were the best-performing stocks in the Hang Seng index in the year’s first quarter. This performance happened as the price of both oil and gas continued rising because of the rising demand. CNOOC and PetroChina shares rose by 33% and 17%, respectively. They were followed by banks, which cheered the change of monetary policy globally. Some of the banks that did well were Bank of China Hong Kong, HSBC, and Bank of China. Real estate companies like China Overseas, China Resources Land, and CK Asset also rose.
On the other hand, many stocks in Hang Seng declined sharply. The worst performer in the first quarter was Sunny Optical, whose shares tumbled by almost 50%. Geely Automobile, the parent company of Lotus and Volvo, declined by almost 42%. Further, AAC Technologies, WuXi Biologics, and Country Garden collapsed by more than 20%. Technology giants like Alibaba, Meituan, Xiaomi, and Alibaba continued bleeding.
Hang Seng forecast
The daily chart shows that the HSI index has bounced back off its year-to-date lows in the past few weeks. But the recovery is not yet confirmed, considering that the index remains below the 50-day and 200-day moving averages. Also, the stock has not managed to move above the important resistance level at H$23,208, which was the lowest point in September 2020.
Therefore, it is too early to tell whether the recovery will move to the second quarter at this stage. However, a move above the MAs and the resistance point will mean that bulls have succeeded, and the index will keep rising.