HSBC share price forecast amid Hang Seng and Chubb deal
HSBC (LON: HSBA) share price rose on Tuesday as investors reflected on the latest news on Hang Seng Bank. It also rose as the market waits for the upcoming interest rate decision by the Federal Reserve and the Bank of England (BoE) decision. The stock rose to 539p, which was slightly above the lowest level last week.
Hang Seng Bank and ChubbCopy link to section
HSBC is one of the biggest banks in the world. Indeed, it is the biggest bank in Europe and the 11th biggest bank in the world in terms of market capitalisation.
HSBC has a strong market share in the UK and a bigger one in Hong Kong and parts of China. In the Chinese market, the company operates its eponymous brand. It also has a 62% stake in Hang Seng Bank, which is a leading player in Hong Kong and some Chinese cities.
HSBC share price rose on Friday after Bloomberg reported that Hang Seng was considering partnering with Chubb, the biggest property and casualty insurer in the world. The deal will help boost Chubb’s presence in the Asian market.
HSBC share price is also rising as investors wait for the upcoming interest rate decisions by the BoE and the Federal Reserve.
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Analysts expect that these banks will continue hiking interest rates this week in a bid to fight the rising inflation. Recent data from the UK and US showed that inflation remained at an elevated level in August of this year.
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In most cases, HSBC and other banks usually benefit in a period of high-interest rates. For one, the company usually adjusts its service fees when interest rates rise. Also, it has trillions of assets that it can adjust its interest rates on. Indeed, the recent results showed that the company’s total interest income rose by 70.95% in the second quarter.
HSBC share price forecastCopy link to section
The daily chart shows that the HSBC share price has been in a tight range in the past few weeks. It has moved slightly above the lower side of the ascending channel shown in red. The stock also rose slightly above the 25-day and 50-day moving averages.
At the same time, the Relative Strength Index (RSI) has moved slightly above 50, which is usually a bullish view. However, it has also formed a rising wedge pattern. Therefore, the stock will likely remain in this range in the coming days and then have a bearish breakout in the coming days.