Hang Seng Index News: Bulls Target 26,000 on US-China Trade Talks and Policy Hopes

Hang Seng Index Hits Another Three-Year High

The Hang Seng Index rallied to a new three-year high in early trading on Wednesday, July 23, on reports that US-China trade talks are resuming next week. The Index was on course for a four-day winning streak, marking its second such streak this month.

A mixed overnight US session failed to dampen the mood as easing trade friction set the tone for trading in Asia.

Key upcoming private sector PMI data, trade headlines, and potential policy measures from Beijing will continue to influence sentiment. These factors could dictate whether the Index breaks below 25,000 or targets 26,000.

Hang Seng Index Climbs Toward 26,000

Hopes for a US-China trade deal boosted demand for Hong Kong and Mainland China-listed stocks. The Hang Seng Index advanced 0.62% to 25,286 in morning trading on July 23.

Mainland China markets also advanced. The CSI 300 and the Shanghai Composite Index rose 0.53% and 0.45%, respectively.

The US Treasury Secretary will meet Chinese officials in Stockholm on July 28 and 29 for a third round of high-level talks. CN Wire reported officials will meet to:

“Negotiate a likely extension of the pause beyond mid-August. While Beijing has not confirmed the talks, Swedish Prime Minister Ulf Kristersson posted on X that Sweden will host the US-China negotiations next week. We’ll be working out what is likely an extension at the Stockholm talks, Bessent said, adding that US officials will also address China’s dependence on manufacturing and exports.”

CN Wire added:

“Separately, Trump told reporters Tuesday that Xi Jinping has invited him to Beijing and he would accept, noting that rare earth and magnet exports to the US may no longer be a contentious issue.”

Meanwhile, the Nasdaq Composite Index fell 0.39% on July 22, bucking the broader market trend. Investors took profit ahead of crucial earnings reports, with Alphabet (GOOGL) and Tesla (TSLA) releasing earnings results later today. In contrast, the Dow and S&P 500 advanced 0.40% and 0.06%, respectively.

Will Tech Stocks Extend the Hang Seng Winning Streak?

Tech giants Baidu (9988) and Tencent Holdings (0700) rallied 3.52% and 1.43%, respectively, lifting the Hang Seng TECH Index 0.60%. Electric vehicle (EV) stocks had a mixed morning. Geely Auto (0175) advanced 0.74% while BYD (1211) dropped 1.19%.

The Hang Seng Mainland Properties Index also climbed for a fourth consecutive morning on hopes of fresh policy measures for the real estate sector.

Technical Setup: 26,000 Resistance or 25,000 Support?

On July 23, the Hang Seng Index traded well above its July congestion zone and the 50-day Exponential Moving Average (EMA), signaling bullish momentum.

Optimism over a potential US-China trade deal drove demand for Hong Kong and Mainland-listed stocks. A trade deal, including reduced levies on Chinese goods, may send the Hang Seng Index toward 25,500. A breakout from 25,500 could pave the way to 26,000.

However, the risk of a reversal lingers, with 25,000 the key support level. Renewed US-China trade tensions may trigger a sell-off, potentially exposing the 24,500 level.

Hang Seng Technical Outlook

• Resistance: 25,500, then 26,000.
• Support: 24,000, followed by 24,500, and 23,928 (50-day EMA).
• Short-term bias remains bullish. However, this is contingent on a US-China trade deal and fresh policy measures from Beijing.

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

The Hang Seng Index extended away from its July congestion zone and the 50-day EMA. June’s rare earth and magnet exports to the US appeared to have thawed US-China tensions, fueling expectations of a trade deal. Rare earth magnet exports surged 667% in June as Beijing removed restrictions.

Additionally, Beijing’s recent policy pledges and a trade deal could deliver the 5% GDP growth target, crucial for Hong Kong and Mainland stocks. A trade agreement and stimulus targeting domestic consumption could drive the Index toward 26,000.

Conversely, renewed US-China trade tensions could raise concerns about weaker external demand impacting corporate profit margins, the labor market, and consumption. Under these scenarios, the Index may drop below 25,000, bringing 24,500 into view.

Will the Hang Seng sustain momentum or retreat? Stay informed with real-time updates as geopolitical risks and US-China developments drive sentiment. Follow our live coverage and consult our economic calendar.