China indices are weakening 📉 CHNComp is losing 1,5%

Chinese indices came under pressure today. CHNComp is losing 1.5%, HKComp is trading nearly 1.5% lower.

• China's foreign minister indicated that China-US relations have seriously deteriorated, warning of a potential conflict. Tension between Washington and Beijing has recently increased. China accuses the United States of holding back its potential and calls for a change in US foreign policy;
• China, as an emerging market, depends to some extent on the sentiment of global investors therefore stock prices from the Middle Kingdom remain sensitive to Wall Street sentiment and the prospect of further Fed policy tightening, Powell's speech before the Senate Banking Committee came off quite hawkish and indicates that the Federal Reserve is ready for further policy tightening;
• Macro data from China came out optimistic today and showed that the likely opening of the economy was not just a speculative theme in the markets. MT Newswires pointed out that the macro data confirmed that the opening of the economy is proceeding faster than the market expected.
• However, some analysts are concerned that exports may slow down later in the year in the face of a weakening macro landscape in global economies. In the first two months of 2023, the volume of semiconductor imports fell 45% y/y, which could signal a weakening technology market;
• On the positive side, the markets were surprised by a larger-than-expected decline in imports (one possible reason being the use of own inventories) - while exports increased. Imports for February fell 10.2% year-on-year, versus 7.5% previously and a forecast of 5.5%. Exports fell 6.8% year-on-year versus 9.4% expectations and 9.9% previously. The foreign trade balance in February was $116 billion vs. $78 billion previously and expectations of $81.8 billion. 

CHNComp Index, H4 interval. The upward trend line was broken by supply at the end of January, and since then the price has already fallen by nearly 15%, from the level of 7800 points. Resistance turned out to be the 23.6 Fibonacci retracement and the nearest support may turn out to be the 38.2 Fibonacci retracement level at 6700 points. Source: xStation5