Hang Seng Index News: EV, Tech Stocks Power Gains as Policy Bets Heat Up

Hang Seng Index Strikes a Three-Year High

The Hang Seng Index climbed to its highest level since February 2022 in early trading on July 22. Hong Kong’s Hang Seng Index was on track for a three-day winning streak as investor focus turned to this month’s upcoming Politburo meeting.

Robust Chinese economic indicators for the second quarter, and hopes for fresh stimulus measures from Beijing, sparked buying interest in Hong Kong-listed stocks.

Overnight, on Monday, July 21, US tech stocks lifted the Nasdaq Composite Index ahead of crucial earnings reports, setting the tone for the Asian session on Tuesday, July 22.

Key upcoming earnings, private sector PMI data, trade developments, and Beijing’s policy announcements will continue to dictate sentiment. These factors could dictate whether the Index breaks below 24,500 or targets 26,000.

Hang Seng Index Advances as Politburo Meeting Looms

US equity markets had a mixed session on July 21, as investors considered upcoming earnings reports and trade developments. The Nasdaq Composite Index rose 0.38%, while the Dow slipped 0.04%. Alphabet (GOOGL) and Tesla (TSLA) released quarterly earnings results on July 23, spotlighting the so-called MAG7—top US tech firms.

US tech sector gains lifted demand for Hong Kong-listed tech stocks. The Hang Seng Index climbed 0.25% to 25,057 in morning trading on July 22. Optimism over a US-China trade deal and fresh stimulus from Beijing bolstered demand for Hong Kong-listed stocks.

Mainland China markets also advanced. The CSI 300 and the Shanghai Composite Index posted gains of 0.37% and 0.25%, respectively.

Will EV and Tech Stocks Sustain the Hang Seng Rally?

Tech heavyweights Baidu (9988) and Tencent Holdings (0700) advanced 0.92% and 0.58%, respectively, lifting the Hang Seng TECH Index 0.07%. Electric vehicle (EV) stocks BYD (1211) and Geely Auto (0175) posted gains of 2.19% and 0.54%, respectively.

The Hang Seng Mainland Properties Index rose 0.36% amid speculation of further support to bolster the real estate sector.

Technical Setup: 26,000 Resistance or 24,500 Support?

On July 22, the Hang Seng Index continued to trade well above its July congestion zone and the 50-day Exponential Moving Average (EMA), indicating bullish momentum.

Further stimulus pledges from Beijing and rising expectations of a US-China trade deal drove appetite for Hong Kong and Mainland-listed stocks.

Lower US tariffs on Chinese goods could drive the Index toward 25,500. A breakout above 25,500 could bring 26,000 into play. Despite recent gains, the Hang Seng Index remains exposed to downside risks, with the 24,500 level still in view. An escalation in US-China trade friction could fuel a sell-off. A break below 24,500 may expose the 50-day EMA and the 23,500 support level.

Hang Seng Technical Outlook

• Resistance: 25,000, 25,500, then 26,000.
• Support: 24,500, followed by 23,870 (50-day EMA), and 23,500.
• Short-term Bias: Bullish, hinged on Beijing’s policy cues and US-China trade developments.

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

The Hang Seng Index remained above the July congestion zone and the 50-day EMA. Easing restrictions on Chinese exports of rare earth minerals to the US lifted sentiment.

Rare earth magnet exports to the US soared 667% to 353 tonnes in June. China had previously restricted rare earth magnet exports to the US, escalating the trade war. The removal of restrictions on rare earth mineral exports and US chip exports to China raised the chances of a trade deal.

Beijing’s assurances of policy support to achieve its 5% GDP growth target and a US-China trade deal would likely be crucial for Hong Kong and Mainland markets. Lower tariffs on China and stimulus aiming to boost domestic consumption could send the Index toward 26,000.

Conversely, rising US-China trade tensions could further pressure corporate profit margins, the labor market, and consumption. Waning consumer spending, weaker external demand, and falling company profits may push the Index toward 24,500, exposing the 50-day EMA.

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.