Asian market analysis of the Hang Seng Index, Kospi, and FTSE Straits Times Index, highlighting key developments and outlooks.
Key Trends and Outlook in Select Asian Indices
In the dynamic world of Asian financial markets, three prominent indices are currently under the spotlight the Hang Seng Index, Kospi, and FTSE Straits Times Index. Here’s a comprehensive breakdown of their recent price action and future prospects.
Asian Market Analysis- Searching for a Bullish Break
The Hang Seng Index is on the hunt for a bullish breakthrough. Recent developments indicate a growing likelihood of this occurrence. Notably, the index has struggled to surpass a critical hurdle formed by the 89-day moving average, the upper boundary of a declining channel since early 2023, and the Ichimoku cloud, situated in the range of 18900-19200. This suggests that the recent rally may merely be a corrective phase following a rebound from the formidable June low of 18045.
However, a decisive breach of this barrier could signify that the Hong Kong benchmark index is finally gaining strength after a period of underperformance since early 2023. Such an achievement could pave the way for the index to clear the well-tested resistance level 20155. Conversely, failure to maintain levels above last month’s low of 17575 might initiate a descent toward the November 2022 low of 16830.
Kospi- Potential Peak in Sight
The Kospi faces the possibility of having reached its peak for the time being. This speculation arises from a double top formation at a significant resistance point and the formation of a lower low in August. A break below the crucial support level at the July low of 2515 has activated a minor double top formation, encompassing the highs of both June and August. This development could potentially open the door to a retreat towards 2380.
A more robust support level lies at the March low of 2350, and for Kospi’s rally from late last year to continue, it must hold above this level. It’s worth noting that the index has encountered robust converged resistance at the 89-week moving average, coinciding with a horizontal trendline established in 2022, positioned around the upper edge of the Ichimoku cloud.
FTSE Straits Times Index- The Struggle Continues
Singapore’s FTSE Straits Times Index remains ensnared within a narrow trading range of 3000-3400. Excluding a brief dip to 2968 in Q4-2022, the index seems to have solidified a strong support zone between 2950-3050, which encompasses the 200-week moving average. As previously mentioned, an imminent break below this support zone does not appear likely, as the index has repeatedly rebounded within this range since 2021.
Nevertheless, a sustained downturn could suggest that the post-Covid rebound has exhausted itself, potentially returning the index to a broad trading range between 2200 and 3500, which includes both the 2020 low and the 2022 high. To reignite bullish momentum, the index would need to decisively breach the resistance level at the 2022 high. Until this occurs, the prevailing path of least resistance remains sideways to downward.