Hong Kong stocks surge after peaceful weekend elections

 

Pro-democracy candidates do well

Following heightened doubts last week that Sunday’s district elections would go ahead at all, given the violent confrontations and road blocks that have been a feature in Hong Kong of late, the elections passed peacefully with a record turnout among voters recorded. At the latest count, pro-democracy groups had won 86% of the 444 seats, a sharp increase from roughly 25% won in the last election in 2015. It remains to be seen how Beijing reacts to the results, even though these district elections considered to be the lowest rung of officialdom.

 

Risk appetite given a boost

In reaction to the result, Hong Kong stocks surged the most in more than three weeks, reaching the highest since November 12 at one stage. The positive mood, and lack of violence on the day, filtered through into other markets, with US indices rising between 0.25% and 0.35%, China shares advancing 0.93% and the Japan225 index gaining 0.61%.

The same risk-on sentiment was evident in currency markets, with the risk-beta Australian dollar climbing 0.17% to 0.6797, heading for the first positive day in four days. USD/JPY gained 0.11% to 108.77 as the yen’s demand as a safe haven was diminished. The US dollar was marginally lower as the US Dollar Index, a weighted measure of the dollar’s value against six major currencies, fell for the first time in five days.

 

HK33HKD Daily Chart

Source: OANDA fxTrade

 

Conservatives maintain lead in surveys

The latest YouGov poll conducted for the UK’s Sunday Times showed the Conservatives’ lead over Labour holding at 42% vs 30%. Separately, the DeltaPoll for the UK’s Daily Mail showed the Conservatives ahead by 43% to 30%, with the third-placed Liberal Democrats at 16%. Meanwhile, the latest poll for the Observer newspaper showed the Tories’ lead at its widest since 2017 at 47% against 28%, with the LibDems at 12% and the Brexit Party at 3%.

The pound has started the week positively, rising 0.1% versus the US dollar to 1.2847, and could be facing its first daily gain in five days. The pair is trading in the middle of a downward-sloping channel which has been forming since October 21.

 

GBP/USD Daily Chart

Source: OANDA fxTrade

 

A slow start to Thanksgiving week

It’s a very small data slate to start the week, with Europe looking forward to Germany’s IFO surveys for November, with the more forward-looking expectations index seen improving to 92.5 from 91.5 in October.

From the US we have two activity indices for November. Firstly the Chicago Fed activity index, which is expected to show a mild improvement to -0.43 from -0.45, and subsequently the Dallas Fed manufacturing index. That probably slid to -11.3 from -5.1 the previous month, according to the latest survey of economists.

 

The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/

 

 

OANDA Senior Market Analyst Craig Erlam previews the week’s business and market news with Jazz FM Business Breakfast presenter Jonny Hart. On this weeks podcast, Jonny and Craig discuss the latest in the UK election campaign as parties release their manifestos, the trade war and Alibaba’s listing in Hong Kong, as protests continue.

 

Source: MarketPulse.com

 

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.