INVESTMENT DAILY

The Hang Seng Index is expected to trade at 26,800 to 27,200today.

    Due to the tumbling Asian market and falling Mainland A shares, Hang Seng Indexfell on Tuesday. The index closed at 26,989 at noon, decreasing 326 points. It’s thefirst time HSI closed below 27,000 points since the commencement of upward trendfrom Easter Holiday onwards. HSCEI closed at 13,861, dropping 252 points.

    Turnover was $166.9 billion. Many sectors recorded a price decline, among whichMainland Insurance generally dropped 2% - 4% whereas Mainland Securities alsoplunged. For the infrastructure stocks, Tuesday is the second day for CRRCresuming trades, and it slid 12.5%. Gambling sectors faced selling pressure as well.

    A series of US economic data released on Tuesday, including job openings in April,small companies confidence as well as wholesale inventories, are all aboveexpectation. Investors intensified their concerns on US interest rate hike. However,as oil stocks performed well on the sharp rebound of oil price, US stock marketclosed nearly unchanged with the Dow and the Nasdaq falling (to 17,764) and 8points (to 5,014) respectively. On the other hand, with anticipated lower sha1e gasproduction, oil price rose 3% on Tuesday.

    HK stock market is weak recently despite A share market strength. Besides, therecent sell off on emerging market also not favor HK market. MSCI has alsoannounced not to add A share into its emerging market index at this stage. Investorsfocus will continue on A share and emerging market performance.

    Technical Analysis.

    Hang Seng Index closed with black candle on Tuesday. Technically, market droppedbelow 27,000, couple with MACD bearish gap expanded, showing that momentumturning weak. Hang Seng index first support would be 26,500, while next supportwould be 26,000. For resistance, 50DMA (27,243) would become the first resistance,while next resistance would be seen at 10DMA (27,480).