HKG33 Drops as Chinese Factory Activity Disappoints Again
HKG33 Analysis
Factory PMI in China shrunk again to the lowest level in six months, as July PMI came in at 49.1, underscoring the country's economic hurdles. There are trade headwinds from fraught Sino-Western relations, the property market remains in distress, unemployment is high, factory activity subdued and domestic consumption weak, with inflation hovering around zero for more than a year.
HKG33 reacted negatively and starts September with losses that threaten the pivotal EMA200 and 38.2% of the last leg up (at around 17,530). This creates risk for further losses towards the 16,848-16,700 support cluster.
On the other hand, Chinese authorities are taking action to prop the economy, with a series of interest rate cuts over the summer. Beijing is also focusing more on revitalizing domestic demand and spending, with the latest acceleration in retail sales and inflation offering encouraging signs. Furthermore, the recent rebound in the Yuan could allow officials to adopt bolder measures.
These developments have helped HKG33 in a four-week profitable streak and above the EMA200 (black line) the recent upside bias is intact and bulls can push for higher highs towards 18,736.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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