July has not been a great month for HSBC’s share price, which is currently down by almost 4 per cent. In today’s trading session, it is down by a percentage point and looking likely to continue dropping throughout the remaining hours.
Whereas HSBC has struggled throughout the month, most fundamentals have gone its way, despite the poor economic data, such as an inflation rate of 9.4 per cent. This includes the latest interest hike by the Bank of England, which has brought the rate to 1.25 per cent. The move, which was largely implemented to control high inflation, will see HSBC grow in the amount of money it can charge for its loans and mortgage products, which is likely to impact its bottom line positively.
However, there is also a small chance that the rising inflation rate and cost of living may deter people from getting loans. This will especially be true if the current economic conditions continue throughout the year. The tightening squeeze in consumer spending power will see some of the bank’s products, including mortgages, failing to attract clients. There is also a high likelihood that, should the conditions continue to deteriorate, some of its clients will likely struggle to pay their loans, which will be a problem for the bank.
HSBC Share Price
Much of what happens to the HSBC share price is dependent on fundamental factors such as economic data and the ability to control the current rising cost of living by the UK government. Looking at the chart below, we can see the company has continued to struggle throughout the month. Part of the reason has been attributed to the current economic environment.
Currently trading at 516 and with the latest inflation data showing a 9.4 per cent spike in the UK, my HSBC share price expectations are for the current bearish trend to continue. There is a high likelihood that the current bearish climate will see HSBC trading below the 500p price level. With today’s session wiping yesterday’s gains in the markets, it is likely that we have started a new push to the downside. My analysis will, however, be invalidated should the price rise and trade above the 530p price level. At that point, it will be in a clear bullish trend.