Stocks in Hong Kong and China are in selloff mode again today while other parts of Asia are mixed. A batch of factors are weighing on sentiments. The Financial Times and Washington Post reported on Sunday that Russia has asked China for help on military equipment for its invasion of Ukraine. But the spokesperson for China’s embassy in Washington said he’s “never heard of that”.
Separately, fresh lockdown was announced in China’s key technology hub in Shenzhen. Last week, the US SEC named its first batch of Chinese stocks as part of a crackdown on foreign firms that refuse to open their books to U.S. regulators. Didi Global suspended its listing in HK after failing to appease the Chinese government’s regulatory demands.
At the time of writing, Hong Kong HSI is down -3.81%, or -782.32 pts for the day, breaking through 20k psychological level. Near term outlook will stay bearish as long as the bottom of the gap last week holds, at 21321.79. However, downside might be “relatively limited” as it will enter into a long term support zone between 18278.80 (2016 low), and lower channel support. Also, both daily and weekly RSI are clearly in deep oversold region.