MARKET EXPRESS China / Hong Kong

HK market continued to be directionless under the thin turnover and low intraday volatilityyesterday. HK market continued to drop as US market tumbled on Tuesday. HSI opened lower bymore than 100 points. Then, it kept seesawing while intraday volatility of HSI reduced to 100 points.

    Though HK market rebounded to narrow the losses before market close, it could not recover all theearlier losses. HSI fell 144 points or 0.62% to close at 23,033. HSCEI lost 29 points or 0.27 to closeat 10,505. Market turnover was thin at HK$54.76bn even including the turnover of placement.

    Market volatility of HK market will increase anytime with limited downside risk in the shortterm. The bandwidth of the Bollinger Band dropped further to 633 points yesterday which was thesmallest value in more than one year. The narrow bandwidth implies that the Bollinger Band willwiden later to break through the current consolidation situation. Particularly, as the current RSI levelis quite low, a rebound in HSI may be triggered. So, the downside risk of HSI will be limited