Hong Kong Exchange and Clearing Ltd (HKEX), the operator of the city’s stock exchange, said on Friday that morning trade in the securities and derivatives market was delayed after the city issued a “Black Rainstorm” warning in the face of torrential rainfall and severe flooding.
Trading will be suspended as long as the warning remains in effect, and could potentially be suspended for the remainder of the day, HKEX said in a statement on its website. Trading will resume in the first half hour of at least two hours after the cancellation of the warning.
Hong Kong was hit with its heaviest rainfall since 1884, which in turn caused severe flooding in large swathes of the city. The Hong Kong government suspended schools and most public services.
The “Black” level warning was issued by the Hong Kong observatory on Thursday night, and is the highest-level warning of extreme weather conditions in the city. The warning was issued for the first time since October 2021, and comes as the city was hit with over 70 millimetres of rainfall in an hour, caused by the aftermath of Typhoon Haikui.
Videos from the city show widespread flooding and torrential streams of water on roads and in subway stations. The Hong Kong observatory advised people against travelling and to take shelter in a safe area.
Hong Kong’s topographical layout- which consists of hills and low-lying coastlines- also makes parts of the city extremely prone to flooding, with waterlogging becoming a common incident during typhoon season.
The city was hit with two consecutive storms over the past week- Super Typhoon Saola and Typhoon Haikui, both of which made landfall in eastern China, while also battering parts of Taiwan and Hong Kong.
The Hong Kong Stock Exchange had suspended trading last Thursday due to disruptions caused by Saola, Investing.com cited.
Negative Momentum Is Stronger
Meanwhile, RHB Retail Research, in a note today (Sept 8), said the HSIF’s movement slid below the 20-day SMA line during Thursday’s session, as selling pressure heightened and the index retraced 268 pts to close at 18,156 pts.
It opened at 18,429 pts and, at one point, the HSIF’s movement rose to the 18,572-pt day high. However, the momentum reversed in the afternoon, dragging the index towards the 18,147-pt day low before the close.
In the evening, the negative momentum followed through, with the HSIF’s movement declining 143 pts – it last traded at 18,013 pts.
The latest negative price action affirmed that the bears are now in control. Falling below the 20-day SMA line has strengthened the bearish setup.
Also, both the 20- and 50-day SMA lines continue to trend lower, giving downwards pressure on the index. The HSIF’s movement is likely to pull back towards the recent low or the 17,539-pt support. Conversely, 18,500 pts has turned from support to resistance. As sentiment now remains risk-off, RHB keeps the negative trading bias unchanged.
Traders should retain the short positions initiated at 19,140 pts, ie 8 Aug’s close. To mitigate the trading risks, the stop-loss threshold is set at 19,500 pts.
The immediate support is located at 18,000 pts and followed by 17,539 pts or 22 Aug’s low. On the upside, the immediate resistance sticks at 18,500 pts, followed by 18,898 pts, which was the high of 4 Sep.
