Hang Seng Index News: Fed Cut Bets and Beijing Stimulus Lift EV, Property Stocks

FOMC Meeting Minutes and Beijing Pledges Boost Sentiment

On Wednesday, July 9, Beijing pledged policy support for job stability, raising hopes for a pickup in domestic demand. The latest move followed private sector and inflation data, pointing to a softer labor market and weakening domestic consumption. Overnight, the FOMC Meeting Minutes signaled potential Fed rate cuts, also lifting sentiment.

On Thursday, July 10, the Hang Seng Index edged higher in early trading, with electric vehicle (EV) and real estate stocks advancing while tech stocks remained under pressure.

Key upcoming Chinese data, trade headlines, and central bank policy cues will continue to influence sentiment. These factors may determine whether the Index drops toward 23,500 or revisits 24,500.

Hang Seng Index Steadies on Policy Signals

US equity markets posted gains on July 9 as investors reacted to the FOMC Meeting Minutes for June. The Nasdaq Composite Index climbed 0.94%. Meanwhile, the Hang Seng Index rose a modest 0.02% to 23,898 in early trading on Thursday, July 10.

Mainland China markets also posted early gains. The CSI 300 and Shanghai Composite Index advanced 0.07% and 0.11%, respectively.

EV and Real Estate Stock Gains Counter Tech Sector Losses

Rising bets on a Q3 Fed rate cut and policy support from Beijing, aiming to bolster the labor market, drove demand for EV stocks. An improving labor market and lower borrowing costs may fuel private consumption, potentially easing pressure on profit margins.

EV-related stocks BYD Electronic International (00285) and Li Auto (02015) posted early gains of 5.44% and 1.61%, respectively.

Reports that Chinese automakers may ease the ongoing price war raised demand for EV stocks. According to CN Wire:

“Chinese automakers may not lower car prices further in the second half of the year, though intense competition will persist, according to Nomura analysts. Strong sales of Xiaomi’s YU7 model have recently boosted demand for fully electric vehicles, benefiting the broader EV sector. The entry of tech firms like Xiaomi and Huawei into the auto industry may also help stimulate additional market demand.”

Expectations of a more dovish Fed stance drove demand for real estate stocks. The Hang Seng Mainland Properties Index rallied 2.14%.

Meanwhile, tech stocks extended their losses from July 9. Baidu (09888) and Alibaba (09988) dropped 1.14% and 0.68%, respectively, leaving the Hang Seng TECH Index down 0.46%.

FOMC Meeting Minutes Signal Rate Cuts

The FOMC Meeting Minutes for June pointed to a potential Q3 Fed rate cut, stating:

“Most participants assessed that some reduction in the target range for the federal funds rate this year would likely be appropriate, noting that upward pressure on inflation from tariffs may be temporary or modest, that medium- and longer-term inflation expectations had remained well anchored, or that some weakening of economic activity and labor market conditions could occur.”

According to the CME FedWatch Tool, the chances of a September Fed rate cut rose from 64.6% on July 8 to 75% on July 9.

However, the prospect of further Fed easing would likely hinge on incoming US inflation data and tariff developments. The Wall Street Journal Chief Economic Correspondent Nick Timriaos highlighted Fed policy uncertainty, remarking:

“The next few months of inflation data will offer a key test of competing theories about whether tariffs will prove inflationary and animate potential Fed divisions over how to manage any costs if forecasts are wrong—in either direction.”

Technical Setup: 24,500 Resistance or 23,500 Support?

On July 10, the Hang Seng Index continued to trade within the July congestion zone. However, despite recent losses, the Index trades above its 50-day Exponential Moving Average (EMA), signaling bullish momentum.

A Trump U-turn on tariffs or stimulus measures from Beijing could send the Index above 24,000. A sustained move through 24,000 may pave the way to the June 25 high of 24,533. The March high of 24,874 would be the next key resistance level. Conversely, a break below 23,750 could expose the 50-day EMA and the 23,500 level.

Hang Seng Technical Outlook

• Resistance: 24,000, 24,533, and then 24,874.
• Support: 23,750, then the 50-day EMA at 23,578 and 23,500.
• Short-term Bias: Bullish but dependent on tariff developments, Saturday’s Chinese trade data, the Fed’s policy stance, and Beijing’s stimulus moves.

Hang Seng Index Forecast: Will the Index Break 24,500 or Drop Toward 23,500?

The Hang Seng Index traded within its congestion zone but held above the 50-day EMA as Beijing’s stimulus pledge and Fed rate cut bets lifted sentiment.

Beijing’s aim to deliver job stability could boost private consumption, potentially easing the impact of US tariffs on transshipments from Asia. Effective stimulus and a pickup in domestic demand could drive the Hang Seng Index toward 24,500.

Conversely, rising trade tensions and weaker overseas demand could further impact Chinese corporate profits, undermining Beijing’s efforts to bolster the labor market. Increasing price pressures and weaker domestic demand may pull the Index toward the 50-day EMA and 23,500.

What’s next for the Hang Seng? Stay informed with real-time updates as geopolitical risks and US-China developments drive sentiment. Follow our live coverage and consult our economic calendar.