Hang Seng Index News: EV and Tech Losses Drag Markets Amid Trade Uncertainty

Hang Seng Index Stumbles as Trade Tensions Resurface

The Hang Seng Index fell sharply on Tuesday, July 29, as hopes for a breakthrough in US-China trade talks began to fade. With Beijing and Washington locked in a third round of high-stakes negotiations, investors grew uneasy over a possible impasse that could revive broader trade tensions.

This week, trade talks, China’s private sector PMI data (July 31), and Beijing’s stimulus plans will influence market sentiment. These key drivers will determine whether the Index breaks below 25,000 or rises above 26,000.

Hang Seng Index and Mainland Markets Retreat

The Hang Seng Index fell 0.95% to 25,319 in morning trading on July 29, bringing the 25,000 level into sight. Mainland China markets also posted morning losses. The CSI 300 and the Shanghai Composite Index slipped 0.05% and 0.08%, respectively. Uncertainty about a US-China trade deal intensified on news of a 90-day extension to the trade war truce.

Overnight, US equity markets posted mixed performances. The Dow dropped 0.14%, while the Nasdaq Composite Index and S&P 500 closed at record highs, gaining 0.33% and 0.02%, respectively.

The US-EU trade deal boosted sentiment, with hopes of a US-China trade deal easing fears of a global trade war. However, upcoming US economic indicators, the Fed’s interest rate decision, and Fed Chair Powell’s press conference left investors on a cautious footing.

Tech Stocks Slide on NVIDIA News

Tech giants Alibaba (9988) and Baidu (9888) slid 1.24% and 2.47%, respectively. Electric vehicle (EV) stocks also faced heavy selling pressure. BYD (1211) dropped 1.56%, with Geely Auto (0175) falling 1.15%. Reports of the US Commerce Department delaying approvals for NVIDIA’s (NVDA) export licenses to China weighed on the broader tech sector.

CN Wire reported:

“NVIDIA placed orders for 300,000 H20 chipsets with TSMC last week due to strong Chinese demand. US Commerce Department has yet to approve NVIDIA’s export licenses for H20. NVIDIA’s new orders for H20s represent switch from plan to just draw from stockpile, source say.”

The pullback in EV and tech stocks dragged the Hang Seng TECH Index down 1.76% in the morning session.

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

Despite the morning losses, the Hang Seng Index trades well above its July congestion zone and the 50-day Exponential Moving Average (EMA).

Progress toward a US-China trade deal, including lower US tariffs on Chinese goods and a further easing of trade restrictions, could drive the Hang Seng Index toward 26,000. A breakout above 26,000 could bring 27,000 into play for the first time since July 2021.

On the other hand, the Hang Seng remains exposed to a reversal if trade talks fail, with 25,000 the next key support level. Renewed US-China trade friction would likely weigh on sentiment, potentially bringing the 24,500 level into sight.

Hang Seng Technical Outlook

• Resistance: 26,000, then 27,000.
• Support: 25,000, 24,500, and the 50-day EMA (24,166).
• The short-term bias remains bullish but hinges on progress toward a US-China trade deal and fresh policy signals from Beijing.

Hang Seng Forecast: Will the Index Break Above 26,000 or Drop to 25,000?

The Hang Seng Index pulled back from Thursday’s three-and-a-half-year high in morning trading. Uncertainty about a US-China trade deal tempered demand for Hong Kong-listed stocks.

Concerns about China accepting and sticking to an imbalanced trade deal, potentially including zero tariffs on US goods and US levies on Chinese shipments, weighed on risk assets. US tariffs on Chinese goods could impact China’s trade terms and Beijing’s 5% GDP growth target for 2025.

Beijing’s policy support could be crucial if talks fail to deliver a framework for a trade agreement.

Economic uncertainty may drag the Hang Seng Index toward 25,000, exposing sub-25,000 support levels. However, hints of a fair trade agreement, with lower US tariffs on China, could drive the Index toward 26,000.

Near-term trends will hinge on trade developments, key Chinese economic data, and Beijing’s policy pledges.

In June, China’s NBS Manufacturing PMI increased to 49.7, up from May’s 49.5, while the Non-Manufacturing PMI rose from 50.3 in May to 50.5. US tariffs impacted external demand and new export orders, weighing on the manufacturing sector.

Stay informed with real-time updates. Geopolitical risks and US-China developments continue to drive sentiment. Follow our live coverage and consult our economic calendar.