Hang Seng Index News: Rally Extends on Eased US Tech Curbs, 25,000 in Sight

Hang Seng Index Rallies as Easing Trade Tensions Counter Hotter US Inflation

June’s US CPI Report dampened September Fed rate cut expectations, weighing on US markets. Meanwhile, easing US-China trade tensions boosted demand for stocks listed in Hong Kong and Mainland China.

On Wednesday, July 16, the Hang Seng Index extended gains from Tuesday, eyeing a five-day winning streak. Electric vehicle (EV) and tech stocks opened the session higher, offsetting real estate sector losses.

Key upcoming US producer price data, trade headlines, and central bank policy signals will continue to drive risk appetite. These factors may determine if the Index retests support at 24,500 or resistance at 25,000.

Hang Seng Index Rallies as US Eases Tech Restrictions

US equity markets posted mixed returns on July 15 as investors reacted to the US CPI Report. The US administration’s easing of export restrictions on chips to China bolstered demand for tech stocks. The Nasdaq Composite Index gained 0.18%, while the Dow slid 0.98%. Meanwhile, the Hang Seng Index rallied 0.92% to 24,817 in early trading on July 16.

Mainland China markets edged higher, with the CSI 300 and Shanghai Composite Index posting gains of 0.03% and 0.01%, respectively.

EV and Tech Stocks Soar, Offsetting Real Estate Sector Losses

China’s trade data for June revealed a surge in rare earth exports in June, easing trade tensions with the US. Rare earth exports soared 60.3% year-on-year after plunging 74% in May. Reports that NVIDIA plans to resume H20 chip sales to China resonated on July 16, boosting demand for EV and tech stocks.

Reports of AMD resuming MI308 chip shipments to China after the completion of the US Commerce’s review of export licenses added to the positive sentiment. NVDA and AMD soared 4.04% and 6.41% on July 15.

Tech heavyweights Alibaba (9888) and Baidu (9988) jumped 2.2% and 3.08% in morning trading, driving the Hang Seng TECH Index up 1.74%. Reports of Baidu and Uber collaborating on global robotaxi rollouts contributed to the gains.

Meanwhile, EV stocks Geely Auto (0175) and Li Auto (2015) advanced 1.64 % and 0.71%, respectively.

Brian Tycangco, editor at Stansberry Research, remarked on the trade developments, stating:

“First NVDA and now AMD. A thawing of tech trade tensions likely due to China’s playing its rare earths card.”

However, June’s housing sector data continued to weigh on the real estate sector. Real estate development investment fell 11.2% YoY from January to June, with residential housing sales areas seeing a sharper fall, dropping 3.5% YoY (May: -2.9%). The Hang Seng Mainland Properties Index fell 0.69%, extending its losses from Tuesday.

US CPI Report Dampens Fed Rate Cut Bets

While easing US tech-related export restrictions eased concerns about US tariffs impacting China’s economy, US inflation numbers lowered bets on Fed rate cuts. The US annual inflation rate rose from 2.4% in May to 2.7% in June. Core inflation edged higher to 2.9% (May: 2.8%).

According to the CME FedWatch Tool, the probability of a September Fed rate cut fell to 54.9% on July 15, down from 62.6% on July 14. Expectations of a less dovish Fed rate path capped the Hang Seng Index’s gains on July 16.

Technical Setup: 25,000 Resistance or 24,500 Support?

On July 16, the Hang Seng Index struck a 4-month high, trading well above its July congestion zone and the 50-day Exponential Moving Average (EMA), indicating bullish momentum.

Easing US-China trade tensions and policy pledges from Beijing could drive the Index toward the March 19 high of 24,847. A sustained move above the March 19 high of 24,847 and 25,000 could pave the way to 26,000. Conversely, a break below 24,500 could enable the bears to target the 50-day EMA and the 23,500 level.

Hang Seng Technical Outlook

• Resistance: 24,874 and 25,000, then 26,000.
• Support: 24,500, then the 50-day EMA at 23,711 and 23,500.
• Short-term Bias: Bullish but hinged on US-China trade talks, US producer prices, Fed policy guidance, and Beijing’s stimulus pledges.

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

The Hang Seng Index traded above the July congestion zone and the 50-day EMA.

Easing trade tensions could bolster China’s labor market, lift consumer sentiment, and drive domestic consumption. These factors may offset the impact of US tariffs, potentially sending the Hang Seng Index toward the March 19 high of 24,847 and 25,000.

Conversely, an escalation in US-China trade tensions through a proxy trade war may impact corporate profits and undermine Beijing’s attempts to steady the labor market. Domestic price wars and weaker consumer sentiment may push the Index toward 24,500, potentially exposing the 50-day EMA and 23,500.

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