Hang Seng Index News: China Data, Powell Remarks Weigh on Market Sentiment

Hang Seng Index Slides on China Data and Fed Chair Powell

The Hang Seng Index slid on Thursday, July 31. China’s NBS PMI numbers pointed to a loss of economic momentum early in the third quarter. Fed Chair Powell’s overnight press conference and the ongoing US-China trade impasse added to the negative mood. Trade talks concluded on July 29 without a deal.

Next week, trade developments, China’s Caixin private sector PMI data (out on August 4), and stimulus news from Beijing will dictate market sentiment. These key drivers will determine whether the Index breaks below 24,500 or rises toward 26,000.

Hang Seng Index and Mainland Markets Retreat

The Hang Seng Index slid 1.36% in morning trading on July 31. Mainland China’s markets also dropped in response to weaker-than-expected PMI numbers, overshadowing policy updates from Beijing. The CSI 300 and the Shanghai Composite Index declined 1.05% and 0.78%, respectively.

Overnight, US equity markets posted mixed performances. The Dow and the S&P 500 fell 0.38% and 0.12%, respectively, while the Nasdaq Composite Index gained 0.15%.

Upbeat US economic data boosted demand for risk assets ahead of Fed Chair Powell’s press conference. The US economy expanded 3% quarter-on-quarter in Q2, recovering from the first quarter’s 0.5% contraction. The ADP reported a 104k rise in private sector jobs in July, reversing a 23k drop in June.

However, later in the session, Powell’s policy stance overshadowed the data. The Fed Chair downplayed the prospect of a September rate cut, citing solid labor market conditions and elevated inflation. Powell also stated that the Fed must assess the impact of tariffs on inflation and the broader economy before any policy moves.

EV, Real Estate, and Tech Stocks Tumble

The Hang Seng Mainland Properties Index plunged 3.47% in early trading. Investors scaled back expectations for a September Fed rate cut, pressuring real estate stocks. Longfor Group (0960) and Shimao Group (0813) fell 4.89% and 3.61%, respectively.

Electric vehicle and tech giants Alibaba (9988) and Baidu (9888) dragged the Hang Seng Tech Index down 0.88%. Geely Auto (0175) and BYD (1211) posted losses of 2.62% and 2.81%, respectively. Alibaba and Baidu fell 2.22% and 1.23%, respectively.

China NBS Private Sector PMIs Flash Red

On July 31, China’s private sector PMIs pointed to a deepening contraction across the manufacturing sector and a stalling services sector. The NBS Manufacturing PMI fell to 49.3 in July, down from June’s 49.7. Meanwhile, the Non-Manufacturing PMI dropped from 50.5 in June to 50.1 in July.

Significantly, manufacturers reported a drop in new orders and a more marked decline in new export orders. Beijing’s policy pledges also failed to disappointed markets.

CN Wire reported:

“Iron ore prices weakened after the latest Chinese Politburo meeting failed to impress investors with significant stimulus measures, according to ANZ research analysts. The meeting’s outcome did not provide details on large-scale stimulus policies.”

Policy pledges included plans to deepen targeted measures to boost consumption and regulate disorderly competition.

Technical Setup: Hang Seng Eyes 26,000 Resistance or 25,000 Support

Despite recent losses, the Hang Seng Index remains above the July congestion zone and the 50-day Exponential Moving Average (EMA).

Progress toward a trade agreement and effective stimulus measures from Beijing may lift sentiment and drive the Hang Seng Index toward 26,000. A breakout above 26,000 could pave the way to 27,000.

Conversely, the Hang Seng could drop toward the 24,500 level if US-China trade tensions escalate. A fall to 24,500 may expose the 50-day EMA.

Hang Seng Technical Outlook

• Resistance: 25,000, 25,500, 26,000, then 27,000.
• Support: 24,500 and the 50-day EMA (24,238).
• The short-term bias remains bullish. but hinges on US-China trade headlines, Beijing’s stimulus plans, and Monday’s PMI numbers.

Hang Seng Forecast: Will the Index Break Above 26,000 or Drop to 24,500?

The Hang Seng Index continued pulling back from July 24’s three-and-a-half-year high. The weak PMI numbers coincided with fading bets on a Fed rate cut and disappointment over US-China trade talks.

Beijing’s stimulus measures could be crucial in offsetting the effect of US tariffs on external demand for Chinese goods.

Economic uncertainties may drag the Hang Seng Index toward 24,500. A drop below 24,500 would bring the 50-day EMA into focus. However, easing trade friction and effective stimulus could drive the Index toward 26,000.

Near-term trends will hinge on tariff news, China’s Caixin PMI numbers, and Beijing’s policy moves.

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