HSBC share price has been on an upward trend for the past few weeks despite concerns about China’s covid-19 cases. The stock ended Tuesday’s trading session 4.44% higher at 510.30p. The HSBA stock price has climbed more than 5% in the past week and 22% since the start of the year. Its total market cap currently stands at £97.56 billion.

HSBC’s Canadian Business

HSBC Holdings Plc was among the top movers in the European market in Tuesday’s session. The stock was also the best performer in the Stoxx 600. The jump in its stock price came after the company agreed to sell its Canadian business to Royal Bank of Canada.

Royal Bank of Canada is a multinational financial services company and the largest bank in Canada by market capitalization. HSBC agreed to sell its business for $10 billion in cash. This will pave way for a potential bumper payout for shareholders down the line.

The British firm has been receiving pressure from its biggest shareholder Ping An Insurance Group, which has encouraged HSBC to split off its Asian business to boost returns. The company’s chief executive officer Noel Quinn said;

“We decided to sell following a thorough review of the business, which assessed its relative market position within the Canadian market and its strategic fit within the HSBC portfolio,”

The transaction will see that RBC gets 130 branches and more than 780,000 retail and commercial customers. If the deal gets approved by regulators, it will be the first big banking merger in Canada in a decade.

Despite the rally, China’s economic concerns continue to weigh heavily on the HSBC share price. China has been reporting a jump in covid-19 cases with ongoing protests against Hong Kong’s zero-covid policy. The firm makes most of its money from its Hong Kong market.

HSBC Share Price Forecast

The daily chart shows that the HSBC share price has been rallying for the past month. The stock is still above the 25-day and 50-day moving averages. Its Relative Strength Index (RSI) is neutral at 55. Therefore, the stock is likely to continue with its current outlook as bulls eye the resistance level at 540p. However, a move below the important support at 473.45p will invalidate this bullish view.