Headwinds ahead for Hang Seng Index?

THE Hang Seng Index (HSI) attempted to recover at the start of the year but continued the general downtrend after mid-February 2022. The index saw an accelerated decline going into March due to the escalating Covid-19 cases in Hong Kong and China, coupled with the Russia-Ukraine conflict among other factors. The index managed to rebound off the low of 18,200s region back to near-22,000 region.

Year-to-date performance of the index sits at a decline of 5.49 per cent to end the first quarter of 2022.

The pandemic situation continues to dampen the performance of the index with China looking to maintain its zero-Covid strategy. Chinese government regulatory reforms, which previously targeted various sectors' performance, served to be the reason for the recent recovery off March lows as the government signals support for Chinese shares and might potentially provide more clarity on the regulatory shifts.