Hang Seng Index hit new low this year before closing flat above 18,000 mark, more downside expected
STOCKS
Hang Seng Index hit new low this year before closing flat above 18,000 mark, more downside expected
STOCKS

Hang Seng Index hit new low this year before closing flat above 18,000 mark, more downside expected

 

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The Hang Seng Index slid as much as over 2% to break through 18,000 mark and hit the lowest level since December last year, before closing largely flat at 18,326.

The Hang Seng Index has declined by 19% from the recent high seen in January this year.

The Hang Seng China Enterprises Index slid as much as 2.2% before closing 0.31% higher. The Hang Seng Index tumbled as much as 2.5% before closing 0.78% higher.

Analysts believe that the Hang Seng Index will see support around 18,000 in the short term, but given the weak economic recovery, the strengthening of the US dollar which will likely bring more capital back to dollar assets, Hong Kong stocks may continue to retreat along with the offshore yuan.

Technology heavyweights were closed higher on Thursday, with Kuaishou up more than 2%, Tencent up more than 1%, Xiaomi, Alibaba and Meituan also higher. 

Automakers rebounded after latest data showed that China’s retail sales of new energy vehicles in the first two weeks of August rose by 38% from a year earlier. Movie companies, semiconductor companies, defence companies, sports goods companies, breweries, catering companies were mostly higher. 

China’s consumption, fixed-asset investment and industrial production all missed expectations, pointing to weakening recovery momentum, and meanwhile, the market which has been expecting large-scale stimulus is so far disappointed by the central government’s policy, said Zhongtai International.

The Hang Seng Index may see temporary support at 18,000 mark, mainly technical rebound and expectation for further policy support, it said.

In the second half of the year, the Hang Seng Index may fluctuate between 16,600 and 21,700, it said.

The 18,300 mark has been a key support for the Hang Seng Index since June and once the index drops below the line, more downside corrections are expected, said Bright Smart Securities.