Hang Seng Index News: EV and Tech Stocks Rally on Trade News, 24,500 in Focus

US-China Trade Talks – A Truce of a Truce; 24,500 Still in Play

Hong Kong and Mainland China markets advanced on Wednesday, June 11, looking to recover losses from the prior session. Investors reacted to updates from the two-day US-China trade negotiations. While there was no meaningful trade agreement, both sides agreed to continue high-level talks to end the ongoing trade war. The de-escalation was preferable to a breakdown or renewed tariffs.

Still, investor caution lingered. Beijing remained silent on stimulus plans despite persistent deflationary pressures and a contracting manufacturing sector. The Hang Seng Index partially reversed Tuesday’s losses, with EV and tech stocks contributing to the early gains.

Markets remain focused on US-China trade developments and potential stimulus signals from Beijing, especially after weak May economic indicators. These themes could determine whether the Hang Seng Index breaks below 24,000 or targets 24,500.

Hang Seng Index Climbs as EV and Tech Stocks Advance

US equity markets ended higher on June 10, with the Nasdaq Composite Index rising 0.63% on optimism over a trade breakthrough. The Hang Seng Index advanced 0.59% to 24,305 in early trading on June 11. Mainland China’s markets also edged higher, with the CSI 300 and Shanghai Composite Index rising 0.13% and 0.02%, respectively.

EV and Tech Stocks in Demand

A continued de-escalation in the US-China trade war boosted demand for EV and tech stocks. JD.com (09618) and Baidu (09888) rose 0.53% and 0.58%, respectively, lifting the Hang Seng Tech Index by 0.90%.

EV stocks also contributed to the morning gains. Geely Automobile (00175) and BYD (01211) added 0.57% and 1.92%, respectively.

Trade Talks Provide Temporary Relief

The two-day negotiations concluded on June 10 without a concrete trade deal. However, China’s International Trade Representative and Vice Minister of Commerce Li Chenggang reportedly stated:

“The two sides agreed in principle a framework for implementing the consensus that Chinese President Xi Jinping and US President Donald Trump reached in their phone call last week, and the consensus of high-level bilateral negotiations in Geneva last month.”

Commenting on the outcome, Natixis Asia Pacific Chief Economist Alicia Garcia Herrero, noted:

“US-China trade war: Why meeting in London and creating expectations to end up with something as minimal as setting up a framework to implement the decisions reached in Geneva? Basically, London marks the truce of an unachieved truce!”

The tentative agreement could reduce the risk of further tit-for-tat restrictions on rare earth mineral and tech exports, calming fears of renewed escalation.

Coinciding with the trade updates, a US Federal Court ruled on Trump’s Liberation Day tariffs. Professor of Economics at the University of Michigan Justin Wolfers shared the latest legal developments, stating:

“Trump’s biggest tariffs were ruled unconstitutional on 5/28. Reinstated the next day to let the courts catch up. Briefs were due yesterday. The court set arguments for 7/31. Lotta companies could go bust waiting for judges to rule on unconstitutional (?) tariffs.”

An eventual court ruling, deeming tariffs unconstitutional could further boost risk sentiment.

Key Levels: 24,000 Support or 24,500 Breakout?

On June 11, the Hang Seng Index reached a 12-week high of 24,369, extending the rally from its April 7 low of 19,260. Despite the lack of a meaningful trade deal, the agreement to continue negotiations supported bullish sentiment. A breakout above 24,500 may open the door for a retest of the March high of 24,874. Any stimulus from Beijing would likely accelerate this move.

Conversely, renewed tensions or disappointing policy signals from Beijing could impact sentiment. A drop below 24,000 may expose the 23,500 level and possibly the 50-day Exponential Moving Average (EMA).

Hang Seng Technical Outlook

• Resistance: 24,500, then 24,874.
• Support: 24,000, 23,500, then 23,000, and the 50-day EMA at 22,927.
• Short-term Bias: Bullish, contingent on trade progress and stimulus expectations.

Forecast Summary: Will the US and China Expedite a Trade Deal, or Will 24,000 Give Way First?

The Hang Seng Index remains well above May and early June’s trading range. Hopes of further progress toward a trade deal or stimulus from Beijing remain market tailwinds. However, sentiment may wane if Beijing remains silent on stimulus and US-China tensions resurface. Resistance at 24,500 will likely cap gains until more details emerge from the two days of talks.

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.