Hang Seng Index Forecast: Is 24,000 in Sight as Court Blocks Trump’s Tariffs?

Court Ruling Lifts Hang Seng but Risks Linger as Trade Uncertainty Persists

An overnight court ruling lifted demand for Hong Kong Stocks. The Hang Seng Index advanced on Thursday, May 29, after the Court of International Trade ruled President Trump’s Liberation Day tariffs unlawful.

Tech and EV stocks advanced, contributing to the early gains. However, the relief may be temporary, with upcoming Chinese economic data, Beijing’s policy cues, and trade developments set to determine whether the index tests support at 22,000 or reclaims the 24,000 handle.

Hong Kong Stocks Track US Futures Rebound

While US markets declined on May 28— the Nasdaq Composite Index dropped 0.51%— the ruling boosted risk sentiment, driving the Dow mini and the Nasdaq 100 futures up 486 and 391 points, respectively. Hong Kong markets responded positively to the news. The Hang Seng Index advanced 0.54% to 23,383. Mainland indices also posted early gains, with the CSI 300 and the Shanghai Composite Index rising 0.03% and 0.10%, respectively.

Mixed Sector Performance as Tech and EVs Move

Tech heavyweights Alibaba (9988) and Baidu (9888) posted modest gains of 0.06% and 0.69%, respectively, sending the Hang Seng Tech Index up 0.87%. However, JD.com could extend its losing streak to six sessions over concerns about intensifying competition and narrowing margins.

The Auto sector also had a mixed start to the session. BYD (1211) dropped 1.13% after recent reports of financial issues at one of its dealers. Meanwhile, Li Auto (2015) and Geely Automobile Holdings (175) rallied 1.29% and 1.13%, respectively.

Court of International Trade Blocks Liberation Day Tariffs

On Wednesday, May 28, the Manhattan-based Court of International Trade dealt a blow to President Trump’s trade strategy, ruling the International Emergency Economic Powers Act (IEEPA) cannot be used to impose tariffs without Congressional approval.

The decision could carry broad implications. The Kobeissi Letter considered the potential repercussions of the ruling, stating:

“If the Court of International Trade’s ruling on “reciprocal tariffs” is upheld, ALL tariffs collected since April 2nd would need to be refunded. Based on our calculations, which assume 2024-levels of US imports, this would be roughly $10 BILLION of tariff revenue. The US would owe China alone a refund of roughly $3.5 BILLION.”

Still, the reaction in Hong Kong and Mainland China’s markets remained cautious, with the US Administration reportedly saying they will be filing an appeal.

Key Levels to Watch: 23,000 Support or 24,000 Breakout

Despite the early gains, the Hang Seng Index stayed within a tight range for a third consecutive session. A break below 23,000 could trigger a decline toward the 50-day Exponential Moving Average (EMA) and possibly lead to a test of the key 22,000 psychological level.

Conversely, upbeat Chinese economic data or favorable trade developments could boost risk sentiment, potentially driving the index toward 24,000. A sustained move through 24,000 would bring the March high of 24,847 into play. Fresh stimulus from Beijing could accelerate bullish momentum.

Hang Seng Technical Outlook

• Resistance: 24,000, then 24,874.
• Support: 23,000, 50-day EMA at 22,744, then 22,000.
• Bias: Neutral-to-Bullish short-term, hinged on economic data, trade news, and stimulus prospects.

Forecast Summary

The Hang Seng remains range-bound, constrained by trade uncertainties and Beijing’s silence on new stimulus measures. Positive Chinese PMI data (due May 31) or stimulus pledges could trigger renewed buying. Until then, geopolitical uncertainty may leave investors cautious, capping gains.

For real-time updates on US-China trade talks, global stimulus efforts, and central bank signals, follow our live coverage and consult our economic calendar.