The HSBC share price in London started the year well. It rose by 12% in the first quarter, underperforming the top London banks like Barclays, NatWest, and Lloyds that rose by more than 15%. It only outperformed Standard Chartered, a bank that also has exposure to the emerging market.
HSBC stock vs London peers
What happened: Global banking groups like HSBC started the year relatively well after slumping last year as they increased their provisions for bad debt. This year, most banks, including HSBC have resumed paying dividends and analysts expect that they will bring back their previous provisions back into their income statements.
HSBC is also benefiting from its exposure to Hong Kong and China, the fastest-growing region in the world. Most importantly, the firm seems to have avoided a negative interest rates scenario in the UK.
The bank has also contemplated moves to improve its business. It has moved some of its senior bankers to Hong Kong from Europe. It is aiming to boost its Asian market business as it pivots from Europe. Also, it is considering exiting its loss-making US venture.
And last week, media sources said that the bank was considering exiting the French market. It has also reopened its main Hong Kong office after closing it a few weeks ago after a Covid outbreak.
HSBC share price Q2 outlook
The daily chart shows that the HSBC share price has been in a strong upward trend. The price upward trend is being supported by the ascending trendline that connects the lowest swings since October last year. It is also along the 15-day and 25-day exponential moving averages (EMA).
The price is a few points below the YTD high of 456p and the 50% retracement at 482p. Therefore, in my view, the HSBC stock will keep rising to the 50% Fib level if it manages to clear the highest level this year. However, a drop below 400p will invalidate this trend.
HSBC stock price chart