The Hang Seng index is among the best-performing indices in Asia today. Up by more than 2.30%, the index has outperformed the Taiwan, KOSPI, and the Nikkei 225 that have gained by more than 1%. The index is now trading at $26,220, which is its highest level since March 6.
Hang Seng reacts to upbeat manufacturing PMI
The biggest contributor to the Hang Seng rally today is the upbeat manufacturing PMI data released by Markit earlier today. The data showed that the manufacturing PMI jumped from the previous 43.9 to 49.6 in June as the city reopened its economy. That was the highest the number has been since 2018.
While the PMI is still below 50, the improvement is welcome since it shows that businesses are optimism about the future. Indeed, the PMI showed that optimism about this year continued to rise even as order books remained relatively low.
However, it is worth noting that Hong Kong is not known for its manufacturing. In fact, there are only a few manufacturers in the city. Instead, the city does well in finance, trade, logistics, retail, and real estate. Still, the fact that optimism from manufacturers has increased it’s a good thing. In the statement, Markit said:
“However, survey data indicated that external demand, particularly from mainland China, is still weak. Firms also remained concerned about the long-term impact of the COVID-19 pandemic on economic activity.”
Hong Kong stocks top movers
Most companies in the Hang Seng are in the green today. The best performer is China Life Insurance, whose shares have jumped by 12.70%. It is followed by Geely Automobile, China Unicorn Holdings, AAC Technologies, Country Garden Holdings, and Ping An Insurance. These shares have jumped by more than 7%. On the other hand, the only Hang Seng companies in the red are Sino Biopharmaceuticals, Tencent, Shenzhou, and New World.
Hang Seng technical analysis
The Hang Seng index is trading at $26,254, which is the highest it has been in months. On the daily chart, the price is above the 50-day and 100-day exponential moving averages. It has also moved above the 61.8% Fibonacci retracement level. This retracement joined the highest and lowest points this year. Also, the index has gained for the third straight day.
Therefore, it seems like bulls are now in total control. This increases the chance that they will test the next resistance at $26,500. However, a move below today’s low of $25,500 will invalidate this trend.