The Federal Reserve cut interest rates by 50 basis points in late Sep, and expected another 1/4 to half percent by the end of the year, coupled with the People's Bank of China cut the reserve requirement ratio by 0.5 percentage points last week, and a series of favorable policies to stimulate domestic housing sector, stock markets in China and Hong Kong showed considerable gains instantly. The Hang Seng Index rose from 17,000 in mid-September to as high as 22,667 after the National Day holiday sessions resumed. Consolidation is expected in the current level. Technically, the Bollinger Bands 250 week moving average around the 22100 level provide short-term support and become a bullish and bearish watershed. The market outlook depends on whether “The Fund from Mainland” and the influx of domestic fund will have any follow-up strategic buying and more favorable policies on resume trading to consolidate the previous rising trend.
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