Hang Seng Index News: Bulls Eye 25,000 on Fed Cut Bets and Trade Deal Hopes

Hang Seng Holds Above 24,500; All Eyes on US-China Trade Talks

US producer prices for June revived bets on a September Fed rate cut, boosting demand for US-listed stocks. Meanwhile, easing trade restrictions on US chip exports to China and rare earth mineral exports to the US have raised hopes for a US-China trade deal.

On Thursday, July 17, the Hang Seng Index hovered, looking to reverse Wednesday’s losses. Electric Vehicle (EV) stock gains offset losses across the real estate sector.

Key upcoming US retail sales data, trade developments, and central bank policy moves will continue to influence sentiment. These factors may determine if the Index breaks below 24,500 or retests resistance at 25,000.

Hang Seng Index Hovers as Profit Taking Caps Gains

US equity markets advanced on July 16 as investors reacted to softer US producer prices, signaling a more dovish Fed policy stance. The Nasdaq Composite Index gained 0.18%, while the Dow slid 0.98%.

Meanwhile, the Hang Seng Index rose to an early high of 24,673 before dropping back to 24,500, leaving the Index flat in early trading. The Index succumbed to profit-taking as investors turned their attention from China’s upbeat GDP numbers to looming trade talks.

Mainland China markets had a mixed start to the day. The CSI 300 gained 0.2%, while the Shanghai Composite Index slipped 0.01%.

EV Gains Offset Weakness in Tech and Real Estate

Tech giants Alibaba (9888) and Baidu (9988) posted losses of 3.56% and 0.88%, respectively, in early trading, leaving the Hang Seng TECH Index with a modest 0.08% gain.  EV stocks trended higher. Geely Auto (0175) and Li Auto (2015) rallied 2.41% and 2.03%, respectively.

The Hang Seng Mainland Properties Index fell 0.45% as real estate stocks extended their losses. June’s disappointing housing sector data continued to weigh on the sector.

US Producer Prices Boost Fed Rate Cut Bets

On July 16, US producer prices supported a more dovish Fed rate path. Producer prices rose 2.3% year-on-year in June after increasing 2.7% in May. As a leading inflation indicator, June’s figures signaled a softer inflation outlook, raising expectations of further Fed policy easing.

According to the CME FedWatch Tool, the chances of a September move rose from 55.6% on July 15 to 59.6% on July 16.

Technical Setup: 25,000 Resistance or 24,500 Support?

On July 17, the Hang Seng Index traded above its July congestion zone and the 50-day Exponential Moving Average (EMA), signaling a bullish bias.

Hopes for a US-China trade deal amid easing trade tensions and expectations of further stimulus from Beijing bolstered demand for Hong Kong-listed stocks. Progress toward a trade deal could send the Index toward 25,000. A sustained move through the March 19 high of 24,847 and 25,000 could bring 26,000 into sight.

Conversely, a drop below 24,500 could expose the 50-day EMA and the crucial 23,500 level.

Hang Seng Technical Outlook

• Resistance: 24,874 and 25,000, then 26,000.
• Support: 24,500, then at 23,731 (50-day EMA) and 23,500.
• Short-term Bias: Bullish but dependent on US-China trade talks, US retail sales data, Fed rhetoric, and Beijing’s stimulus announcements.

Hang Seng Index Forecast: Will the Index Break 25,000 or Drop Below 24,500?

The Hang Seng Index traded above the July congestion zone and the 50-day EMA. Easing concerns about a full-blown US-China trade war supported the Index at the 24,500 level.

A US-China trade deal and stimulus from Beijing could support China’s labor market and boost domestic consumption. Easing tariffs may also increase external demand. These factors would likely drive the Hang Seng Index toward the March 19 high of 24,847 and 25,000.

Natixis Asia Pacific Chief Economist Alicia Garcia Herrero remarked on the economic outlook and potential for new stimulus, stating:

“But, second half of the year, that’s in a way where things could really get worse, both in terms of exports but also in terms of the whole sentiment. Because the second half of the year is expected to be much worse, I think they need to stimulate further. They have started already, it’s just a question of how much more they will do.”

Conversely, rising US-China trade tensions may further impact corporate profits and the labor market. Intensifying domestic price wars and weaker household spending may pull the Index below 24,500, potentially exposing the 50-day EMA and the 23,500 level.

What’s next for the Hang Seng Index? Stay informed with real-time updates as geopolitical risks and US-China developments drive sentiment. Follow our live coverage and consult our economic calendar.