The Hang Seng Index ended a seven-week losing streak during the week ending July 3, rising 679 points or 2.99% to close at 23,350 points on Friday. The index gained 295 points on Friday after opening at 23,240, reaching an intraday high of 23,516 before encountering resistance. The rebound followed the creation of new closing and intraday lows above one year on June 26 at 22,518 and 22,671 points respectively, after the breakdown of major support levels established since the May 7 previous year "slow bull" market. Technical indicators showed the weak stock index declining 3.5% from a one-year+ high of 56.5% on Friday, while the index recaptured its 10-day moving average after losing it for one full month.
Hang Seng Index Records Weekly Gain After Seven-Week Decline
The Hang Seng Index rose for two consecutive days following the return to normalcy holiday, gaining 174 points on Thursday July 2. On Friday, the index opened 185 points higher at 23,240, adjusted slightly to 23,226 before advancing to the 23,516 level where it encountered resistance. The index closed the week at 23,350 points, representing a weekly gain of 679 points or 2.99%.
The index had previously created new lows on June 26, with a closing low of 22,518 points and an intraday low of 22,671 points, marking levels not seen in over one year. Following these lows, the index began a rebound and crossed above its 5-day moving average on Thursday of last week.
Technical Indicators Show Reduced Selling Pressure
The EJFQ weak stock index, which reflects selling pressure on weak stocks, declined 3.5% from a one-year+ high of 56.5% on Friday to 53.1%, resulting in a flat performance for the week. This decline in selling pressure coincided with the Hang Seng Index recapturing its 10-day moving average, which it had lost for one full month.
The index created a pattern of higher highs and higher lows over three consecutive days, crossing above both its 5-day and 10-day moving averages. The technical structure showed the index opening at 23,240 on Friday, adjusting to 23,226, then advancing to 23,516 before closing at 23,350.
Market Sentiment Remains Cautious Despite Rebound
The EJFQ strong stock index, which reflects buying interest in strong stocks, declined 6.7% for the week to 21.7%. On Friday, this index showed a bearish divergence with the Hang Seng Index, declining 1.9% on a single day. Northbound capital flows recorded a net outflow of 1.88 billion yuan for the week, bringing cumulative inflows to 300.468 billion yuan as of July 3, the lowest year-to-date level for 2024.
The immediate-month futures contract maintained a premium to the spot Hang Seng Index for most of Friday's trading session. The index's ability to hold above its 5-day and 10-day moving averages in the near term will determine whether the technical improvement continues.
FAQ
What was the Hang Seng Index's performance during the week ending July 3?
The Hang Seng Index rose 679 points or 2.99% for the week, closing at 23,350 points on Friday July 3. This ended a seven-week losing streak. On Friday alone, the index gained 295 points after opening at 23,240 and reaching an intraday high of 23,516.
What technical levels did the Hang Seng Index recapture last week?
The Hang Seng Index crossed above its 5-day moving average on Thursday July 2, and recaptured its 10-day moving average on Friday July 3. The index had lost its 10-day moving average for one full month before recapturing it. The index created higher highs and higher lows over three consecutive days.
What were the capital flow conditions in Hong Kong stocks last week?
Northbound capital flows recorded a net outflow of 1.88 billion yuan for the week ending July 3. This brought cumulative inflows to 300.468 billion yuan as of July 3, representing the lowest year-to-date level for 2024. The EJFQ strong stock index declined 6.7% for the week to 21.7%.
