|
Hong Kong market kept rising but the upside momentum slowed down. External markets had no clear direction and investors were looking forward to the non-farm payroll figures in the U.S. HSI kept seesawing after opening slightly lower at 20,681, down 59 index points. It finally closed at 20,757, up 17.53 index points or 0.08%. HSI still kept the highest position since 1 Sept 2011. The volatility for the whole day was only 157 index points. HSCEI also gained 22 points or 0.19% to 11,606. Market turnover declined by HK$11.7bn to HK$63.4bn.
Properties sector outperformed the market. Properties sub-index gained 0.72% and all stocks under this sub-index increased 0.1% to 1.9%. Finance sub-index also gained 0.08%, while C&I and utilities sub-indexes dropped 0.03% and 0.02%, respectively. Stimulated by M&A activity over Orange Austria, Hutchison (13 HK) was the best performing blue-chip and major mover, surging 3.3% and helping the index to gain 18 index points. Li & Fung (494 HK) also continued to rebound by 2.6%. Food and beverage stocks were under pressure. Tingyi (322 HK) was the worst performing blue-chip, falling 1.8%. Want Want China (151 HK) also lost 0.3%. The advance/decline ratio went down to 1.6:1, indicating that market sentiment was still positive but investors became more cautious under the current relatively high position.
Upside momentum was weakening. Although short-selling turnover ratio slightly declined to 9.2%, amounting to HK$5.9bn, short-selling turnover ratio for blue-chips climbed to 13.9% equating to HK$2.8bn. The figures showed that the selling pressure continued to accumulate and might pull back the market in short run.
Momentum of HK market was weakening on the last trading day. HSI continued to surge last Friday. A-share market broke the current peak at 2,324 to help HSI to see the day-high at 20,796, which was the highest level since 1Sep2011. However, HSI retreated after the market’s opening to see the day-low at 20,639. The intra-day volatility maintained at 157 points. Though HSI saw a breakthrough last Friday, the intra-day trend was mixed and it could not maintain the uptrend. Particularly, HSI only edged up 17 index points with a “Spilling Roll” pattern on the day chart. It indicated that investors were cautious. Besides, HSI had already reached the peak of 1 Sep 2011during the rebound. That may drive HK market to see resistance.
RSI of HSI was strong but diverged to the share price. According to the closing price last Friday, the RSI and STC of HSI maintained at “overbought” situation. For example, 9-day and 14-day RSI were 75.7 and 71.2, respectively. The K line and D line of STC were 95 and 91, respectively. These two groups of indicators were “overbought”. However, MACD showing mid-term trend of the market was still trading at positive territory to show that the mid-term uptrend had not changed yet. However, the RSI on last Friday could not break the peak of the RSI one week before. This drove the direction of RSI to diverge to that of HSI. Besides, the vertical distance of MACD and its signal line narrowed. These showed that the strong momentum may not continue in short term. We expect that HSI will see strong resistance at 20,900. If the retreat kicks off, 19,500 will be the major support in short term. However, since the U.S. market surged another 100 points and broke the previous peak, that may help HSI to reach 21,000. So, HSI will trade within the range of 19,500 to 21,000 this week.
DJIA was on the rise last Friday, as investors cheered much stronger-than-expected employment data. DJIA finally gained 157 points or 1.2% to end at 12,862, near intra-day high. S&P 500 added 19 points, or 1.5%, to close at 1,344. Bank of America spiked 5% and led the DJIA. Share prices of Morgan Stanley, Citigroup and Goldman Sachs were all up between 3% and 5%. DJIA has reached its highest level since May 2008.
US economy added 243,000 jobs in January, far better than the market expectation of 140,000. The unemployment rate dropped to 8.3%, better than the market expectation of 8.5%. Factory orders for December rose 1.1%, slightly below expectations. The January ISM Services Index hit 56.8, surpassing the market forecast of 53.2.The 10-year US treasury bond yield rose to 1.95% from the previous closing yield of 1.82%.
| 
