Hang Seng Index: Bulls Target 26,000 on Fed Rate Cut Bets, Earnings, and Stimulus

Hang Seng Index Hits New 2025 High — Can It Break Above 26,000?

The Hang Seng Index is edging toward a milestone unseen in five years — 26,000 — as bullish momentum builds. Rising bets on multiple Fed rate cuts, Beijing’s latest stimulus push, corporate earnings, and easing US-China trade tensions boosted sentiment.

This week’s catalysts, including US-China trade developments, corporate earnings (JD.com, Alibaba, and Geely Auto), and Chinese economic data, including retail sales, unemployment, and industrial production, which will drive sentiment. Additional stimulus chatter from Beijing could add to the market momentum.

These factors could determine whether the Index will drop below 25,000 or target 26,000.

Hang Seng Index and Mainland China Equity Markets Hit 2025 Highs

The Hang Seng Index climbed 0.28% to 25,684 in morning trading, striking a new 2025 high of 25,767 before retreating. Mainland China’s CSI 300 and Shanghai Composite Index rallied to fresh 2025 highs, gaining 0.72% and 0.36%, respectively.

Corporate earnings, fresh stimulus, and the extension of the US-China 90-day trade war truce drove demand for Hong Kong and Mainland-listed stocks.

Leading economist Hao Hong remarked on the market gains and downplayed the risk of a lasting correction, stating:

“Given the favorable liquidity conditions and FOMO sentiment, any correction is likely to be shallow and quickly absorbed by buyers.”

Overnight, US markets extended gains amid speculation over more aggressive Fed rate cuts. On Wednesday (August 13), the Dow rallied 1.04%, while the Nasdaq Composite Index and the S&P 500 rose 0.14% and 0.32%, respectively, setting the tone for Thursday’s Asian market session.

US Treasury Secretary Scott Bessent called for a 50-basis-point September Fed rate cut, fueling speculation about further monetary policy easing in the fourth quarter. He stated:

“I think we could go into a series of rate cuts here, starting with a 50-basis point rate cut in September. If you look at any model it suggests that we should probably be 150, 175 basis points lower.”

According to the CME FedWatch Tool, the chances of a 25-basis-point September Fed rate cut slipped from 93.9% on August 12 to 93.8% on August 13. The probability of a 50-basis-point rate cut rose from 0% to 6.2%, indicating a 100% chance of a September drop in interest rates.

Real Estate and Tech Stocks Send Hang Seng Index toward 26,000

Interest rate-sensitive real estate and tech stocks drove the Hang Seng Index to its new 2025 high. Tech heavyweight Tencent Holding (0700) rallied 1.28%, building on Wednesday’s 4.74% surge. Tencent reported strong Q2 earnings results, with revenue topping analysts’ expectations.

Meanwhile, the Hang Seng Mainland Properties Index climbed 1.73%, contributing to the Hang Seng Index’s gains.

Technical Setup: Hang Seng Index Break Above 25,736 Hinges on Earnings

The Hang Seng Index extended its run from the July congestion zone and the 50-day EMA in morning trading, underscoring bullish momentum.

Rising expectations of a US-China trade deal, upbeat Chinese economic data, and further stimulus measures from Beijing could send the Hang Seng Index above the crucial 26,000 resistance level.

Conversely, renewed US-China trade tensions, weak China data, and the absence of fresh stimulus may test risk sentiment. A drop below the 25,500 support level could bring the 25,000 support level into play. If breached, the 50-day EMA would be the next key support level.

Hang Seng Technical Outlook

• Resistance: 26,000, then 27,500.
• Support: 25,500, 25,000, and then the 50-day EMA (24,504 at the time of writing).
• The short-term bias remains bullish but hinges on US-China trade news, Beijing’s stimulus measures, corporate earnings, and upcoming Chinese economic data.

Hang Seng Forecast: Will the Index Break above 26,000?

The Hang Seng Index moved closer to its five-year high of 26,235. A US-China trade deal could be the next key event, bringing 26,000 into play. Meanwhile, corporate earnings and Thursday’s Chinese data will also drive demand for risk assets. Conversely, renewed trade tensions could reverse recent gains if corporate earnings and China’s data disappoint.

Weaker earnings may reflect the impact of US tariffs on demand. Meanwhile, disappointing data could challenge Beijing’s 5% GDP growth target. A slowing economy, with softer domestic demand, may weigh on corporate profits. Labor market conditions could deteriorate if firms reduce staffing levels to manage costs, a drag on consumer sentiment and spending.

Stay informed with real-time updates. US-China trade headlines will continue to drive sentiment. Follow our live coverage and consult our economic calendar.