Reuters reported that the Chinese government would announce new COVID-easing measures this week. Rumours have swelled among Chinese and overseas investors, sparking the best monthly rally in Hong Kong-listed Chinese stocks since November 2003. Things remained continuously bullish for the HK50 in the first week of December.
China’s government-planned changes come after significant cities from Beijing to Shanghai and Shenzhen in the past two weeks rapidly rewound policies such as mass testing and wider-range lockdowns. Expanding the rule nationwide so quickly represents a significant shift away from the bedrock practice of the “elimination strategy” and increases the investor’s confidence. From the HK50’s bottom of September, it already rose 20%.
HK50 Day Chart
The HK50 index was rejected at 19600 on Tuesday. At this moment, the critical point is to trigger the adjustment. Investors wait and see the support at 19075 in the daily chart. Once hit and rebounded, the index will break through the previous resistance on Tuesday, and it will have more room to move upward, with the target at 19786 and a retest of the last high at 20693.
