Hang Seng Index Slides Amid Tariff Concerns

Fundamental Analysis

* Tariff Impositions Weigh on Stock Prospects: President-elect Donald Trump’s announcement of potential tariffs on Chinese imports could significantly impact China’s economic progression and Chinese-related stocks. This sentiment has further diminished market risk appetite, triggering a selloff in the Hang Seng Index. Trump’s plan to impose an additional 10% tariff on all Chinese goods entering the U.S., as posted on his social media platform Truth Social, has exacerbated concerns.

Technical Analysis

* Technical Breakout: The Hang Seng Index has broken below the crucial support level of 19,730.00, marking a significant technical breakdown. The MACD indicates an increasing bearish momentum, suggesting sellers are gaining strength, while the RSI stands at 37, well below the midline, reinforcing the bearish outlook and hinting at a potential extension of losses.

* Resistance and Support: If bearish momentum persists, the Hang Seng Index may extend its decline toward the next support level at 18,325.00. However, if the index fails to breach the 18,325.00 support, a potential rebound may occur, with immediate attention on the resistance level at 19,730.00 for signs of recovery.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Investors will closely monitor key U.S. economic data releases, including the Core PCE Price Index, for indications of inflation trends. Additionally, any retaliatory policies from China could shift market sentiment and drive unexpected price movements.

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Monitoring

Stay updated on US data, global conflict updates, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.