US markets stabilized on Tuesday after June CPI data showed inflation rising 3.5%, slowing faster than expected and easing Federal Reserve rate hike pressure. IBM plunged 25.2% on disappointing sales, marking its worst single-day drop since at least 1968 and erasing $69 billion in market value, dragging the Dow Jones Industrial Average to open 452 points lower. The Dow recovered to close up 9 points at 52,508, the S&P 500 gained 28 points or 0.38% to 7,543, and the Nasdaq advanced 322 points or 0.9% to 26,107, with technology stocks leading the rebound. Hong Kong's Hang Seng Index rose 127 points to 24,340 with turnover of HK$312.9 billion as northbound capital continued flowing in, while China reported first-half GDP growth of 4.7% year-on-year with second-quarter growth of 4.3%, a three-and-a-half-year low. The inflation data provided relief to markets concerned about prolonged monetary tightening, with Hong Kong stocks approaching technical resistance at the 50-day moving average near 24,815.
IBM Records Worst Single-Day Drop Since 1968 on Sales Miss
IBM shares fell 25.2% on Tuesday, the company's worst single-day decline since at least 1968, after reporting sales that missed expectations. The drop erased $69 billion in market value, making IBM the worst-performing component of the Dow Jones Industrial Average. The stock's collapse caused the Dow to gap down 452 points at the open, though the index recovered during the session with support from banking stocks. The Dow briefly rose as much as 196 points to reach 52,695 before closing nearly flat at 52,508, up just 9 points.
Technology stocks led the broader market rebound following the CPI data release. The S&P 500 advanced 28 points or 0.38% to close at 7,543, while the Nasdaq Composite gained 322 points or 0.9% to finish at 26,107. The Nasdaq reclaimed the 30,000 level, with resistance identified at 30,100-30,200 and support at 29,700-29,600 if the index falls below 29,800.
Hang Seng Index Approaches 50-Day Moving Average Resistance at 24,815
Hong Kong's Hang Seng Index opened 210 points higher on Wednesday at 24,551 following the overnight US market stabilization. The index retreated to an intraday low of 24,449 before rallying as much as 434 points to reach 24,774, though momentum faded before reaching the 50-day moving average at approximately 24,815. The Hang Seng closed the morning session at 24,695, up 354 points or 1.46%. The Hang Seng China Enterprises Index gained 94 points or 1.16% to 8,197, while the Hang Seng Tech Index rose 64 points or 1.39% to 4,744. Half-day turnover reached HK$174.78 billion, with northbound capital recording a net inflow of HK$9.384 billion, marking a full week of continuous inflows.
The index has remained above its 20-day moving average at 23,711 for more than three trading sessions. The 5-day moving average at 24,191 has crossed above both the 10-day moving average at 23,735 and the 20-day moving average, generating a short-term golden cross signal. The 50-day moving average at 24,815 and the upper Bollinger Band at approximately 24,859 represent immediate resistance, with the 24,800-25,000 range expected to pose significant resistance. First support is located at 24,150-24,200, where the 5-day and 30-day moving averages converge, followed by 24,000 as a psychological support level. The 23,700-23,800 range, where the 10-day and 20-day moving averages sit, represents a critical support zone that must hold for the uptrend to continue.
China's National Bureau of Statistics reported first-half GDP growth of 4.7% year-on-year, with second-quarter growth of 4.3%, the slowest pace in three and a half years. Despite the weaker-than-expected economic data, Hong Kong stocks extended gains during the afternoon session.
FAQ
What caused IBM stock to drop 25.2% on Tuesday?
IBM shares fell 25.2% after the company reported sales that missed expectations, marking its worst single-day decline since at least 1968 and erasing $69 billion in market value.
What technical resistance level is the Hang Seng Index approaching?
The Hang Seng Index is approaching its 50-day moving average at approximately 24,815, with the 24,800-25,000 range representing significant resistance. The upper Bollinger Band sits near 24,859.
