Hong Kong's Hang Seng Index is being weighed down by its two large constituent stocks: Tencent (0700) and HSBC Holdings (0005).
Tencent accounts for 10% weighting of the Index, and HSBC 7%.
Tencent was pressured by the latest U.S. government ban on the Company's instant messaging app WeChat. The stock is down 1.7% to HK$516.0 per share at the time of writing.
Meanwhile, Chinese media Global Times reported that HSBC could be included in the Chinese government's "list of unreliable entities" on potential of impacting China's interests. HSBC shares have plunged 4.5% to HK$29.55, the lowest level since 1995.
On a Daily Chart, the Hang Seng Index has formed a Bearish pattern of Lower Highs.
Sources: GAIN Capital, TradingView
Currently it remains subdued at levels below both 20-day and 50-day moving averages.
And the relative strength index is still badly directed below 40, suggesting continued downward momentum for the index.
The trailing Key Resistance has been lowered to 25150.
Unless this level is surpassed, the index is expected to encounter support at 23540 (around the low of June) and 22500 (around the low of May) on the downside.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.