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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Hong Kong Shares Pushing for Support Levels

The Hong Kong share market is pointing lower and may get dragged lower by the US impact on global stocks.

HK50 – Weekly Chart

HK50 – Weekly Chart

The HK50 index trades at 19,408, with support coming in lower at 18,144, a support level back in March 2022. 

Stocks fell in Hong Kong last week after Alibaba posted a fourth-quarter sales miss adding to fears of a broader slowdown in China's post-Covid recovery. The e-commerce giant reported a 3% drop in domestic sales. In contrast, the cloud segment reported its first-ever year-on-year revenue dip. Alibaba said it would seek an IPO spin-off for its cloud business and consider separate listings for its logistics and grocery businesses. 

China's diplomatic relationships are also back on the agenda after G7 nations sent a warning to the country.

British Prime Minister Rishi Sunak said China posed "the greatest challenge of our age" concerning global security and prosperity and was "increasingly authoritarian at home and abroad". The leaders of the world's largest economies criticised Beijing's stance on issues such as Taiwan. But they also accused the country of "economic coercion".

G7 countries called for a "de-risking" policy that would decouple their economies from China with diversified trade sources and protection on trade and technology. 

Chinese stocks have suffered since April 18, when the country released figures on its first-quarter economic output. The Chinese market has lost $540 billion in value since then. Investors cut their exposure to the country after the previous tensions between the US and China. The Nasdaq Golden Dragon China Index and the Hang Seng have lost 5%, while the Chinese yuan has also lost around 2%. 

Hong Kong Stock Market Forecast

"Investors remain sceptical about China for two primary reasons. First, the recovery has not been robust," said Brock Silvers at Hong Kong-based Kaiyuan Capital. Another problem is the "fundamental investability," which relates to political tensions. 

Beijing needs to show more trust in foreign companies with a crackdown on international consultancies and an expansion of counter-espionage laws. That theme could last a while as the G7 increases its criticism of China. Large investment firms will likely refrain from investments in the UK.

Last Updated: 22/05/2023

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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