According to reports, persistent weakness in the energy sector closed Hong Kong’s shares went down for the seventh consecutive session and the drop in May futures have speculated further weakness in the cash market in the coming weeks.
The Hang Seng fell 0.2 % which is the lowest level in 5 weeks below a chart support level led by and over 2 % decline for majors in oil, Petrochina and CNOOC.
Futures on the Hang Seng index also closed near 1% discount to the cash market, revealing more weakness.
The benchmark went below its 200-day moving average, which is
Currently, around 22,865 and its index closed below the 50% retracement level of all its move ups from the decrease in March, following the Japan earthquake.
Though energy sector index closed down at 0.7 %, when compared to the 0.2 % gain to 2,872.4 on the benchmark of Shanghai’s Composite Index, it went below its 125-day moving average, which is currently at 2,900.4.
According to reports, China’s main stock index, has gone down by 6% since it reached its highest level in 2011 on the 18th of April, after a fresh data showed increasing inflation coupled with a slow growth in “exacerbated fears of further monetary tightening”.
Analysts however, have stated that the Chinese banks may lead the next leg up after a favorable first-quarter result, as “valuations remained attractive”.