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Hang Seng Index (HSI) Plummets Further on China Technology Clampdown

Hang Seng Index (HSI) Plummets Further on China Technology Clampdown

Nick Cawley, Senior Strategist

Hang Seng Index (HSI) News, and Analysis:

  • Hang Seng slumps to levels last seen in November 2020.
  • Chinese regulators continue to squeeze technology companies.
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The Hang Seng Index (HSI) is down another 4%+ today as China continues to clampdown on technology companies, with the regulators taking aim at the food sector today. The HSI is now down nearly 20% after printing an all-time high in February this year. The indices’ constituents are a sea of red with double-digit losses seen in Alibaba Health Info tech (-18.5%), China Feihe (-16.2%), Meituan Dianping (-17.6%) among others. The Hang Seng Tech index has been hit even harder and the recent sell-off has seen the indices lose over 40% this year.

The daily HSI chart shows the recent damage caused by the government crackdown with the index now trading below all three simple moving averages, while the 50-day sma has fallen through the 200-day sma, forming a bearish ‘death cross’. The CCI indicator is flashing an extreme oversold warning, while volatility, measured by the 14-day ATR, is climbing sharply. The multi-month higher low made at the end of last year has been broken with ease today, leaving the October 30 swing-low at 23,961 the next level of support.

Hang Seng Index (HSI) Daily Price Chart

In recent weeks, Chinese regulators have been curbing, and fining, Chinese technology companies, hitting a range of sectors and companies hard. The food sector is currently in the government’s cross-hairs with the regulator today announcing a new set of guidelines, while in recent days the private tutoring sector and music licenses have all felt the wrath of the Chinese government.

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What is your view on the Hang Seng Index (HSI) – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.