Hang Seng Index testing key support level at 21,800

Hang Seng Index testing key support level at 21,800

By Margaret Yang, CMC Markets

The Hang Seng Index tumbled over 1,200 points, or 5% over the last two weeks. The selling was accompanied by emerging market outflow as the US dollar surged to a decade’s high. The fast depreciating of RMB also urged outflow from the China market, further weighing on Hong Kong equities.

Technically, the Hang Seng Index has fallen to a key support level at around 21,800 points, which is also the 61.8% Fibonacci extension level. Breaking below this level will open the floor to further downside, pointing to 21,360.

In Singapore, the SGX’s daily equity trading volume fell to around S$900m recently, as year-end trading activities shrank. A relatively quiet calendar towards the end of the year suggests that the Straits Times Index may range between 2,900-2,960 points, unless we see a “window-dressing” rally next week.

Today’s BOJ interest-rate decision is a key event, and the market is anticipating no change in the BOJ’s policy rates this time. USD/JPY retraced to the 117.25 area as the market positions itself for any potential surprises. Near-term support and resistance levels for USD/JPY are around 115.5 and 119.4 respectively.



Margaret Yang Yan, CFA, is a market analyst for CMC Markets Singapore.

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