Hang Seng Index News: Rally Extends as US Inflation Miss Fuels Fed Easing Hopes

Hang Seng Index Rallies — Can It Break Above 25,736 on US CPI Boost?

The US CPI Report boosted bets on Fed rate cuts, fueling demand for risk assets. The Hang Seng Index rallied in the morning session on Wednesday, August 13, extending its gains from the previous session.

This week, US-China trade headlines, corporate earnings (Tencent, JD.com, Alibaba, and Geely Auto), and Chinese economic indicators, such as retail sales, unemployment, and industrial production, will influence sentiment. Stimulus news from Beijing, aimed at driving private consumption, could fuel demand for risk assets.

These factors could determine whether the Index will drop below 25,000 or target 26,000.

Hang Seng Index and Mainland China Equity Markets Advance

The Hang Seng Index rallied 1.19% to 25,267 in morning trading, climbing above the crucial 25,000 resistance level. Mainland China’s CSI 300 and Shanghai Composite Index also posted morning gains, rising 0.18% and 0.11%, respectively.

The extension of the US-China 90-day trade war truce bolstered demand for Mainland-listed stocks. An extension removed the immediate threat of a 145% US tariff on Chinese goods.

Overnight, US markets rallied as US inflation data fueled bets on a September Fed rate cut. On Tuesday (August 12), the Nasdaq Composite Index rallied 1.39%, while the Dow and the S&P 500 rose 1.10% and 1.13%, respectively, setting the tone for Wednesday’s Asian market session.

The US annual inflation rate remained at 2.7% in July, easing fears of stagflation while lifting expectations for a Fed rate cut next month. Economists had expected the inflation rate to climb to 2.8%. According to the CME FedWatch Tool, the probability of a Fed rate cut increased to 93.4% on August 12, up from 85.9% on August 11.

Tech Stocks Drive Hang Seng Index Above 25,000

Interest rate-sensitive tech stocks sent the Hang Seng Index above the 25,000 mark. Tech heavyweights Alibaba (9988) and Baidu (9888) jumped 2.83% and 2.66%, respectively, while Tencent (0700) gained 2.53%.

Meanwhile, EV stocks were mixed. Li Auto (2015) rose 0.37% and BYD (1211) gained 0.90%, while Geely Auto (0175) fell 1.75% ahead of earnings. Upcoming earnings results will reveal any early effects of US tariffs on corporate profitability.

Technical Setup: Hang Seng Index Break Above 25,736 Hinges on Earnings

The Hang Seng Index pulled away from the July congestion zone and the 50-day EMA in morning trading, indicating bullish momentum.

Hopes for a US-China trade deal, positive Chinese economic data, and expectations of stimulus from Beijing could send the Hang Seng Index toward the July 24 current year high of 25,736. A sustained move through 25,736 may pave the way to the 26,000 level.

Conversely, rising US-China trade friction, disappointing China data, and Beijing’s silence on fresh stimulus may weigh on risk appetite. A break below the 25,000 support level could expose the 24,500 level and the 50-day EMA. If breached, the bears may target the psychological 24,000 support level.

Hang Seng Technical Outlook

• Resistance: 25,736, then 26,000.
• Support: 25,000, 24,500/50-day EMA (24,443 at the time of writing), then 24,000.
• The short-term bias remains bullish but hinges on US-China trade headlines, Beijing’s stimulus plans, corporate earnings, and incoming Chinese economic data.

Hang Seng Forecast: Will the Index Break Below 25,000 or Target 25,736?

The Hang Seng Index is moving toward its 2025 high of 25,736. A US-China trade agreement could be the next key event, potentially bringing 26,000 into play. Corporate earnings and Thursday’s Chinese data will also influence sentiment. Conversely, stalled trade talks could reverse recent gains if China’s economic data and corporate earnings disappoint.

Disappointing earnings and slowing economic momentum could weaken China’s position in trade talks. A slowing economy, with softening domestic demand, may affect corporate profits. Firms could respond by cutting staffing levels to manage costs, a potential drag on consumer sentiment and spending.

Stay informed with real-time updates. US-China trade headlines will continue to drive sentiment. Follow our live coverage and consult our economic calendar.