Hang Seng Index News: September Fed Rate Cut Bets Lifts Tech and Real Estate Stocks

Hang Seng Index Climbs on Fed Rate Cut Bets

Relief Rally or Dead Cat Bounce? The Hang Seng Index advanced in early trading on Monday, August 4, potentially snapping a four-day losing streak. Friday’s US Jobs Report revived hopes for a September Fed rate cut, lifting demand for Hong Kong-listed stocks. Meanwhile, Beijing’s recent policy pledges bolstered demand for Mainland China equity markets.

This week, US-China trade developments, China’s services sector PMI (out on August 5), trade data (out on August 7), and stimulus measures from Beijing will influence market sentiment. These key drivers will determine whether the Index breaks below 24,500 or rises toward 25,000.

Hang Seng Index and Mainland Markets Buck Regional Trend

The Hang Seng Index rose 0.40% to 24,605 in early trading, recovering from a low of 24,373. Mainland China markets also posted gains. The CSI 300 edged 0.01% higher while the Shanghai Composite Index gained 0.25%.

On Friday, August 1, US equity markets posted heavy losses as the US Jobs Report fueled stagflation fears. The Dow fell 1.23%, while the Nasdaq Composite Index and the S&P 500 slid 2.24% and 1.6%, respectively.

Nonfarm payrolls increased by 73k in July after a downwardly revised 14k increase in June. A downward revision from 147k and rising unemployment revealed cracks in the US labor market. Friday’s data revived bets on a September Fed rate cut. According to the CME FedWatch Tool, the chances of a September move surged from 37.2% on July 31 to 82.7% on August 3.

Amazon.com (AMZN) contributed to the Nasdaq’s heavier losses, tumbling 8.27% despite beating earnings estimates. A disappointing outlook impacted sentiment.

Tech and Real Estate Stocks Offset EV Stock Rout

Rising bets on a September Fed rate cut boosted demand for rate-sensitive real estate and tech stocks.

The Hang Seng Mainland Properties Index climbed 0.75% on expectations of a more dovish Fed rate path. Meanwhile, the Hang Seng Tech Index rose 0.8% as Tencent (0700) rallied 1.59%.

However, electric vehicle (EV) stocks extended their losses from Friday. BYD (1211) slid 2.41% after reporting a 10% drop in monthly sales in July. Li Auto (2015) fell 0.40%.

Technical Setup: Hang Seng Moves Toward Crucial 25,000 Resistance

The Hang Seng Index pulled away from the July congestion zone and the 50-day Exponential Moving Average (EMA), indicating a bullish bias.

Progress in US-China trade talks and fresh stimulus from Beijing may lift demand for risk assets. Improved sentiment could drive the Hang Seng Index toward 25,000. A breakout above 25,000 may pave the way to the July 24 high of 25,736.

Conversely, renewed US-China trade tensions and a lack of fresh stimulus could weigh on risk appetite. A drop below the 24,500 level could enable the bears to target the 50-day EMA, potentially exposing the crucial 24,000 support level.

Hang Seng Technical Outlook

• Resistance: 25,000, 25,500, then 25,736.
• Support: 24,500, the 50-day EMA (24,254), then 24,000.
• The short-term bias remains bullish, but hinges on US-China trade headlines, Beijing’s stimulus plans, and upcoming Chinese economic indicators.

Hang Seng Forecast: Will the Index Break Below 24,500 or Retarget 25,000?

Despite the morning gains, the Hang Seng Index remains well below the three-and-a-half-year high of 25,736 set on July 24. After July’s weaker-than-expected Manufacturing PMIs, effective stimulus measures aimed at boosting domestic demand could trigger a sustained recovery. However, US-China trade developments will be crucial as President Trump targets transshipments to curb shipments through tariff-friendly routes.

A lack of progress and effective stimulus may further impact demand for Chinese goods and the broader economy. The Hang Seng Index could drop below 24,500, bringing the 50-day EMA and 24,000 into sight. Conversely, progress toward a trade deal and effective stimulus could send the Index toward 25,000 and potentially 25,736.

Near-term trends will hinge on tariff developments, China’s economic data, and Beijing’s policy measures.

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