Hang Seng Index News: Market Eyes 25,000 on Trade Talks, Fed Rate Cut Hopes – Weekly Recap

Fed Rate Cut Bets and Iran-Israel Ceasefire Boosts Risk Assets

The Iran-Israel conflict ended abruptly on June 24, with Iran and Israel agreeing to a ceasefire. Fears of Iran closing the Strait of Hormuz eased as US involvement shifted the dynamic, with US-Iran nuclear agreement talks likely to resume. WTI Crude Oil prices plunged 12.55% in the week ending June 27, closing at $64.325.

Rising bets on a Fed rate cut added to the positive sentiment as US economic data supported a more dovish Fed stance.

The Hang Seng Index reversed its losses from the previous week, logging weekly gains in nine of the last eleven weeks.

After last week’s ceasefire and key US data, investor focus now turns to trade developments, key economic data from China, and US-Iran nuclear agreement talks.

Hong Kong and Mainland China Stocks Rally on Easing Middle East Tensions and Fed Signals

US equities rallied in the week ending June 27, with the Nasdaq Composite Index up 4.25%. An Iran-Israel ceasefire, softer US economic data, and Fed rate cut bets drove demand for risk assets. The Hang Seng Index advanced 3.2% to end the week at 24,284.

Mainland markets also got a boost, with the CSI 300 and Shanghai Composite Index posting weekly gains of 1.95% and 1.91%, respectively. Reports of a US-China trade agreement bolstered demand for Mainland stocks. However, industrial profit numbers from China reversed some of the gains.

Risk-On Sentiment Sends Tech and EV Stocks Higher

While the gains were broad-based, EV and tech stocks led the recovery. The Hang Seng Tech Index rose 4.06%, reversing the previous week’s 2.03% loss. Tech giants Alibaba (9888) and Baidu (9888) climbed 0.36% and 1.15%, respectively.

EV stocks recovered from the previous week’s sell-off. Li Auto (2015) soared 8.43%. New measures from Beijing to boost demand for EVs influenced sentiment. However, BYD (1211) fell 1.27% amid reports of debt issues and plans to slow production.

Brian Tycangco, editor at Stansberry Research, commented:

“Some news circulating BYD has started cutting production by reducing night time shifts at some of its plants as per Reuters. I’d take that with a grain of salt given the past week’s strong insurance registration numbers for the brand.”

Iran-Israel Ceasefire Triggers Market Rebound

US airstrikes on key Iranian nuclear sites pushed Iran and Israel to agree to end airstrikes on June 24, driving demand for risk assets. Hong Kong and Mainland markets reacted to the news, as the ceasefire removed the threat of oil supply disruption. The truce also raised hopes of a US-Iran nuclear agreement, potentially restoring stability in the Middle East.

Fed Chair Powell and US Data Raise Fed Rate Cut Expectations

Fed Chair Powell delivered two days of testimony on Capitol Hill, signaling a wait-and-see policy stance to assess the impact of tariffs on inflation. However, soft US economic data and Fed speakers fueled speculation about a Q3 Fed rate cut, lifting market sentiment.

Several Fed speakers, including Michele Bowman, Austan Goolsbee, Mary Daly, and Susan Collins, signaled support for policy easing. US GDP numbers for Q1 potentially pressured Fed speakers into a more dovish stance as President Trump clamored for rate cuts. The US economy shrank by 0.5% quarter-on-quarter in Q1 after expanding 2.4% in Q4 2025.

China Industrial Profits Plunge as US Tariffs Bite

Industrial profit numbers from China spooked investors on June 27, overshadowing easing Middle East tensions. Year-to-date, industrial profits fell 1.1% year-on-year (YoY) in May after rising 3% in April. Significantly, profits tumbled 9.1% in May YoY, reflecting the early effect of tariffs on China’s firms. The mining sector took the biggest hit, with profits down 29% YoY in May.

Natixis Asia Pacific Chief Economist Alicia Garcia Herrero remarked on the May data, stating:

“Cost of over-competition – but also US tariffs – clearly hurting Chinese companies. Corporate profits fell 9.1% in May. Unsustainable without additional subsidies.”

Key Levels to Watch: 24,000 Support or a 25,000 Test

The Iran-Israel ceasefire and rising expectations of a Fed rate cut pushed the Index above the crucial 24,000 resistance level. Significantly, the Index avoided a drop below the 50-day Exponential Moving Average (EMA), affirming bullish price trends.

Favorable details of a US-China trade deal, easing Middle East friction, and upbeat data from China could send the Hang Seng Index above the June high of 24,533. A sustained move through 24,533 could pave the way toward the March high of 24,874 and potentially 25,000.

Conversely, weak China data, a one-sided trade deal, and renewed Middle East tensions could drag the Index below 24,000. Sustained selling pressure may enable the bears to target the 50-day EMA, a crucial support level.

Hang Seng Technical Outlook

• Resistance: 24,439, 24,874, and then 25,000.
• Support: 24,000, then 50-day EMA at 23,416 and 23,000.
• Bias: Cautiously bullish in the short term, contingent on a favorable US-China trade deal, easing Middle East tensions, and upbeat economic data from China.

Forecast Summary

The Hang Seng traded well above its May and early June congestion zone, bolstered by a rebound in demand for risk assets. In the week ahead, China’s private sector PMIs and policy signals from Beijing will influence market trends. However, trade developments and headlines from the Middle East will likely remain pivotal.

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.