Asian equity markets tumble over Putin's shock move

[MongiIG]

The Hang Seng Index has convincingly reversed its upward trend since the end of January and is now moving towards the lowest level before its rise.

Source: Bloomberg

 

Hang Seng Index ASX S&P/ASX 200 Indices Vladimir Putin Taiwan

Hebe Chen | Market Analyst, Australia | Publication date: Wednesday 23 February 2022 

Russian President Vladimir Putin signed a decree officially recognizing two self-proclaimed separatist republics in eastern Ukraine. This is a concerning sign for the rest of the world as Moscow is moving to take control of territory internationally recognized as part of Ukraine, meaning the crisis in Europe has upgraded to a new level. Moreover, the shock move made the hope of a Russia-US peace talk to ease the escalating tensions even darker.

The crisis has seen the global financial market go through a turbulent journey since early this month, which continues to be the main theme for this week.

Hang Seng: Reversed the uptrend

Hang Seng Index has convincingly reversed its upward trend since the end of January and now moving towards the lowest level before the rise. A 2% plus drop on Tuesday has placed the index below all of its major moving averages, with the 50-days MA turning to the next resistance level. Current support can be found at 23617 before Hang Seng backfoot to the lowest level of the year at 23285.

Hang Seng Daily Chart

Source: IG

ASX 200: Broke through all key MAs

The Australian market opens at 1% lower on Tuesday. The index has moved sideways from its upward pathway from the January correction, suggesting the bull buyers struggle to retain control. At the time of writing, the index has breached the 20 days moving average and is supported at the level of 7091. The following support level will be looking at 7006.2, which, if broken will see the ASX200 giving up all the gains in February.

From the momentum point of view, the RSI reading points towards the oversold zone with some distance to move before putting an overturn on the cards. As such, it would be harder to see the return of the bulls unless some positive catalyst happens.

ASX 200 Daily Chart

Source: IG

Taipex: Drop the most in February

The Taiwan stock market, one of the best performers last year, also dropped substantially today.
Since the end of January, the Index has betrayed its three-month-long moving trajectory. Bottoming out from January’s correction, the Taiwan market has shown strong resilience and moved up 5% for the first two weeks in February and touched briefly on the previous trend line.

Following the slide on Tuesday, the 100-days MA becomes the current support level for the Index, which, if broken, will bring the next support at 17500 in prospect. Above the current level, multiple layers of pressure will challenge bull buyers in the market, including the low on February 15th at 17982 and the conjunction point of 20 and 50 days MA at 18075. These resistance levels need to be clear if the Index aims to return to its upward journey.

Taiwan Index Daily Chart

Source: IG

Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.