Markets in focus
China unveils economic support framework
The Chinese government has recently articulated more comprehensive details regarding economic support measures, including employment subsidies for university graduates, financial assistance packages for exporters, and strategic initiatives to stimulate domestic consumption. Officials have confirmed the imminent implementation of a technology development fund and consumption stimulus policies by June, whilst expressing confidence in achieving the 5% growth target despite ongoing US trade tensions. This enhanced clarity generated market optimism, propelling the Hang Seng Index (HSI) upward by 2.4% last week.
The current week represents another shortened trading period for numerous Asian markets, including Hong Kong, which observes a market holiday on Monday. Investors will be meticulously analysing developments in US-China trade negotiations and assessing the forthcoming April trade data release.
Technical analysis indicates that momentum has improved substantially since early April, with the index approaching the 50-day moving average (SMA). The HSI price pattern demonstrates characteristics consistent with Elliott Wave theory, with the recent market recovery exhibiting behaviour typical of Wave B within the framework. A 0.618 Fibonacci extension of Wave A would potentially advance the index to 22,729 before a subsequent retracement towards 19,000. However, a definitive breach of the 50-day SMA could establish a trajectory towards the psychological threshold of 24,000.
