stock market
Mainland China's CPI in July fell by 0.3% on a yearly basis,1 Ethereum to USD slightly better than the market expectation of a 0.4% decline. The decrease was primarily driven by a 1.7% drop in food prices, while non-food prices remained steady. On the other hand, the PPI in July declined by 4.4% year-on-year, marking its tenth consecutive monthly drop and falling below the market expectation of a 4% decline. On a monthly basis, it decreased by 0.2%. These figures indicate increasing deflationary pressure in the mainland.
The Hang Seng Index (HSI) opened lower on Wednesday but rebounded after reaching a low of 19,056.1 points. It climbed to 19,270.48 points by 11:01 before retracing. The index dipped to the 19,100 level in the afternoon and saw a slight recovery towards the end of the trading day, but it failed to challenge the morning high. The overall volatility for the day was 214.38 points with a total turnover of 85.039 billion yuan. The HSI and the H-share index rose by 0.32% and 0.39%, respectively, while the Hang Seng Tech Index (HSTECH) fell by 0.01%.
The Hang Seng Index fell to its lowest level since July 25th and partially filled the upward gap that occurred on that day. The index closed with a bullish candle, which, when combined with the trend from the previous trading day, forms a positive "dawn" pattern. The MACD bearish divergence widened, diverging from the index. There were 850 advancing stocks and 750 declining stocks throughout the day, indicating a preference for the overall trend.
Investors are awaiting the release of July inflation data in the United States on Thursday night (Hong Kong time), which may have a softening effect on the three major US stock indices.
After the U.S. stock market's closing, President Biden signed an executive order strictly prohibiting U.S. funds from investing in China's sensitive technologies and requiring notification to the U.S. government for other technology investments. This executive order authorizes the U.S. Treasury Secretary to prohibit or restrict U.S. investment in three areas in China: semiconductors and microelectronics, quantum information technology, and certain artificial intelligence systems. U.S. officials stated that the U.S. government will engage in multiple rounds of public consultations regarding the scope of the restrictions, and it is anticipated that the related limitations will be implemented next year, emphasizing that the new restrictions will only affect future investments.
The above news is expected to weigh on Hong Kong-listed Chinese technology stocks, as it involves several heavyweight stocks, which is also expected to be unfavorable for the stock market performance.
With overnight futures and American Depository Receipts (ADR) declining, the Hang Seng Index (HSI) is anticipated to open lower, with a subdued trend. Support levels to consider are 19000/18900.
