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HSBC Share Price Struggles as Bank of England Hikes Rates

Mulhouse - France - 13 August 2020 - Closeup of HSBC sign on Bank agency building in the street

The latest HSBC share price analysis by Goldman Sachs Group research analysts indicates a potential upside of 32 per cent. In addition, the analysts gave HSBC a 710p price objective, indicating a possible upside in the future. 

Despite the latest bullish analysis by The Goldman Sachs Group ratings, HSBC’s share prices have continued to drop in the markets. Today, the share price is down by 0.3 per cent, continuing yesterday’s 3 per cent aggressive bearish move. 

HSBC is in the middle of increased pressure to change some of its operations. According to a recent research report commissioned by Ping An Insurance Group Co., HSBC’s biggest shareholder, the company could benefit greatly if bank operations were overhauled to allow for a breakup of its Asian unit. The research showed the company stood to unlock over $26 billion, or a fifth of its current market value. 

However, the report from the bank’s largest shareholders has not been received in kind by other shareholders. Reports indicate executives at the London headquarters were against the idea of splitting. However, they had begun discussion and analysis of the proposal, which was first tabled to the company by Ping An in April.

HSBC Share Price Analysis

The latest reports show the Bank of England has raised its interest rates by 0.25 percentage points. The move is expected to have an impact on the UK banking industry, as well as HSBC share prices in the coming trading sessions.

Despite being bearish yesterday and today, there is a high likelihood that we will start seeing the share price of HSBC start to rise again. Normally, the move would have seen the bank’s prices start to recover immediately. However, the UK is also in a tough economic environment, where its inflation rates have continually stayed above 5 per cent for months. 

Therefore, my HSBC share price prediction expects prices to continue to struggle in the markets. In the next few trading sessions, there is a high likelihood that the share prices will trade in a sideways market. This is despite the recent hike in interest rates that would have seen the company start to recover in the markets. 

However, if the UK’s economy starts to improve, my sideways HSBC share price outlook will be invalidated. It will also mean a possible bull run that is likely to see HSBC trading above 600p again.

HSBC Daily Chart