HKG33 D1 05 26 2020 2224

The Hang Seng Index sits in a precarious spot following the worst one-day price drop since 2015 on Friday as tensions between China and Hong Kong intensify. Friday’s drop was largely the result of Beijing announcing it would quickly move forward with an anti-sedition law aimed at stemming ongoing protests in Hong Kong. The semi-autonomous country has seen mass protests since 2019 when Hong Kong’s security Bureau attempted to pass extradition laws that were met with grave concern over China’s increasing grip on the country.
Wednesday will mark a critical point for tensions in the country as protestors plan to hold a mass demonstration, expected to be the largest in months, in opposition to a controversial national anthem bill. Furthermore, tensions between China and the United States are moving back into the spotlight.
Given the political turbulence expected in the weeks ahead along with the planned mass protests, volatility in the Hang Seng index could continue for the near future. However, a spillover effect into the broader macro landscape is possible, especially if the protests in Hong Kong draw more international attention and condemnation towards China.

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