HSBC share price is down by more than 2%, becoming the worst-performing bank stocks in the FTSE 100. The shares are trading at 396p, which is slightly below this month’s high of 426p. Standard Chartered shares have also fallen by almost 2%.
What’s happening: HSBC is the largest banking groups in Europe in terms of assets. It also has a substantial business in Hong Kong and mainland China. Therefore, today’s decline of HSBC share price is partly because of the exposure to Hong Kong.
That’s because the city has started seeing an uptick in the number of Covid-19 cases, pushing the government to impose new restrictions. This will possibly lead to less transactions and fewer travel from mainland China, which will have an impact on local banks. Indeed, this is possibly the reason why Standard Chartered, which also has exposure to Hong Kong is also struggling.
What about CCP? HSBC share price is also falling partly because of a recent expose by Telegraph. The paper reported yesterday that more than 335 senior managers of the bank were members of the Communist Party of China. Senior heads at StanChart and Deutsche Bank were also mentioned, raising questions about its independence.
HSBC share price technical outlook
Is HSBC still a buy? HSBC share price has rallied by more than 40% from its YTD low of 281p. On the daily chart, the shares have moved above the 50-day and 100-day moving average. This is a sign that bulls are still in control.
However, the shares have formed an island reversal pattern at the 400p level. This means that the shares will possibly remain at the current level in the near term. In the longer-term though, the price may continue rising as bulls aim for the next resistance at 450p.