Hang Seng Index News: Five-Day Rally Builds on US-China Deal Hopes

Hang Seng Index Hits 2025 High—Will Trade Talks Fuel Further Gains?

The Hang Seng Index surged in early trade on Thursday, July 24, flirting with its highest level since 2021. Hopes of a US-China trade breakthrough electrified markets. Reports that the US and China were nearing a trade deal lifted sentiment. President Trump said the US was close to a trade deal with China. Meanwhile, updates from today’s China-EU summit in Beijing signaled a potential improvement in relations, adding to the positive mood.

CN Wire reported:

“China and Europe should enhance communication. China, EU at another critical historical juncture. Should increase mutual trust and deepen cooperation. Both should make correct strategic choices that meet the expectations of the people.”

The US-Japan trade deal and progress toward agreements with the EU and China boosted demand for risk assets overnight, setting the tone for the trading session in Asia.

Key upcoming private sector PMI data, trade developments, and further policy news from Beijing will continue to dictate sentiment. These factors will determine whether the Index breaks below 25,000 or rises above 26,000.

Hang Seng Index Nears 26,000

The Hang Seng Index climbed 0.55% to 25,680 in morning trading on July 24. The Index struck a morning high of 25,736 before easing back.

Mainland China markets also extended their gains. The CSI 300 and the Shanghai Composite Index advanced 0.45% and 0.48%, respectively.

US equity markets had a positive mid-week session. The Dow rallied 1.14%, while the Nasdaq Composite Index gained 0.61%.

Alphabet (GOOGL) released earnings overnight, topping estimates. The share prices rose 1.72% in after-hours trading. However, Tesla (TSLA) tumbled 4.44% in after-hours trading after reporting a sharp fall in revenue and net income.

Real Estate and Tech Stocks Extend the Hang Seng Winning Streak

Real estate stocks led the gains, with the Hang Seng Mainland Properties Index rallying 1.19%. Tech stocks extended their gains on trade optimism. Tech heavyweights Tencent (0700) and JD.com (9618) advanced 0.54% and 0.52%, respectively. Easing US restrictions on chip exports to China has sent the Hang Seng TECH Index to 5,780, its highest level since March.

Brian Tycangco, editor at Stansberry Research, remarked:

“As I mentioned yesterday, the Hang Seng Tech Index had cleared a major resistance and looked like it had another 10% to 11% upside before another major resistance at 6200.”

However, electric vehicle (EV) stocks had a mixed morning. Geely Auto (0175) and BYD (1211) rose 1.27% and 0.97%, respectively, while Li Auto (2015) dipped.

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

On July 24, the Hang Seng Index traded at a 2025 high, well above its July congestion zone and the 50-day Exponential Moving Average (EMA).

Trade developments fueled demand for Hong Kong and Mainland-listed stocks. A trade deal, including lower tariffs on Chinese goods, could send the Hang Seng Index above 26,000. A breakout from 26,000 could bring 27,000 into sight. However, the risk of a reversal remains, with 25,000 the key support level. Renewed US-China trade friction may weigh on sentiment, potentially exposing the 24,500 level.

Hang Seng Technical Outlook

• Resistance: 26,000, then 27,000.
• Support: 25,500, followed by 25,000, and 24,500.
• Short-term bias is bullish. However, this hinges on a US-China trade agreement and fresh policy announcements from Beijing.

Hang Seng Index Forecast: Will the Index Break Out from 26,000 or Drop Below 25,500?

The Hang Seng Index moved further away from its July congestion zone and the 50-day EMA. Easing restrictions on US exports of chips to China and rare earth mineral exports to the US supported progress toward a trade deal.

Additionally, Beijing’s recent policy cues and improved trade terms could deliver China’s 5% GDP growth target, crucial for risk sentiment. These factors could drive the Hang Seng Index above 26,000, bringing 27,000 into play for the first time since July 2021.

Conversely, rising US-China trade tensions could signal higher tariffs, impacting corporate profits, the labor market, and domestic demand. Under these scenarios, the Index may drop below 25,500, bringing sub-25,000 levels into sight.

Will the Hang Seng sustain momentum or retreat? 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.