HSBC share jumped on Monday after the reports that its biggest shareholder, Ping An Asset Management, increased its stake in the bank from 7.95% to 8%.
While the stake increase is marginal, investors translated the move as a vote of confidence to the banking group. HSBC shares in London managed to rebound from 11-year lows as investors dumped the stock after reports on money laundering that included many global banks and HSBC.
HSBC trapped in a political battle over its support of China’s national security law in Hong Kong, and its involvement in the arrest of Huawei CFO Meng Wanzhou. Most of the HSBC profits are coming from Asia, and any tension with the Chinese administration would create more problems for the bank.
HSBC is among the worst performers in the banking sector across the globe this year. The stock has lost over 48% since the beginning of the year after the bank suspended its dividends payments amid the coronavirus crisis.
HSBC has set aside over $11 billion this year for bad loans as it expects more businesses and clients to default on their loan repayments because of the coronavirus pandemic.
The bank reported a 65% drop in pre-tax profits to $4.3 billion in the first half of 2020 worst than the market consensus.
HSBC Share Technical Analysis
HSBC is 9.07% higher at 309.05 as the stock managed to rebound from 11-year lows and to recover all of the previous week heavy losses. The stock also managed to exit from the deeply oversold levels, and the RSI point to higher levels.
Resistance for HSBC share is at 316 the daily high. Bulls need to break above 330.58 -the 50-day moving average- to initiate long positions. Next resistance for HSBC would be met at 344.80 the top from August 25.
On the flip side, support for HSBC stands at 305.85 the daily low. More bids might emerge at 284.70 the low from September 22. A move below might test the 11-year lows at 280.20.
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HSBC Daily Chart