The Hang Seng index is tumbling today, becoming the worst-performing major index in Asia. It is trading at h$26,468, which is lower than last week’s high of h$27,035. This price action is possibly because of reports that the United States government is escalating its conflict with China.
According to Reuters, the US will impose new sanctions on Chinese officials in response to the recent disqualification of opposition in Hong Kong. The sanctions and the escalating tensions will possibly continue even after Joe Biden becomes president.
Most companies in the Hang Seng are in the red today. Only 8 companies, including Sino Biopharma, Wharf Real Estate, WuXi Holdings, and New World are in the green. On the other hand, the worst-performers are China Resources Land, AAC Technologies, ANTA Sports, and CNOOC are the worst performers.
Elsewhere, in Japan, the Nikkei 225 erased earlier gains as investors continued to worry about the lag between Covid vaccine approval and distribution. Also, there are concerns about the vast holdings by the Bank of Japan, which owns more than ¥45.1 trillion in the countries shares. The index has dropped by 0.75% and is trading at ¥26,547.
Elsewhere, in Europe the FTSE 100 index is pointing upwards as the important Brexit talkscontinues. Like I reported earlier today, France and Germany are set to present their final offer to the UK this week.
While there is a tough rhetoric on both sides, investors believe that the two sides will ultimately reach a deal by the end of the year. Over the weekend, Ireland’s prime minister said that there was 98% chances of a deal. Meanwhile, in Germany, the DAX index is set to open 0.10% lower today.
Meanwhile, in the United States, futures tied to the Dow Jones and S&P 500 are down by 0.25%. Those tied to the Nasdaq 100 are not changed, which is a signal that the rotation to technology is continuing.
Hang Seng technical outlook
Let’s focus on the Hang Seng index. On the daily chart, we see that the index is trading at h$26,468, which is slightly below the intraday high of h$26,860. On the daily chart, this price is on the same level as the 25-day and 15-day weighted moving averages. It is also slightly above the 61.8% Fibonacci retracement level.
The index has also formed an ascending channel that is shown in pink. Therefore, for today, the index will possibly remain at the current level. But in the long-term, the Hang Seng will possibly break-out higher.
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Hang Seng technical chart
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