Hang Seng Index News: Stocks Climb as Traders Eye Truce Extension and Earnings

Hang Seng Index: Trade War Truce Deadline and Earnings in Focus

Time’s up for the trade truce—markets brace for impact. Will the US and China extend, or is a full-blown trade war brewing?

The Hang Seng Index edged higher on Monday, August 11, recovering from an early dip. The US-China trade war truce is set to expire on Tuesday, August 12, with no trade agreement in sight.

This week, US-China trade headlines, corporate earnings (Tencent and Alibaba), key Chinese economic indicators, including retail sales and industrial production, and stimulus chatter from Beijing are likely to influence sentiment. These factors may determine whether the Index will drop below 24,500 or will target 26,000.

Hang Seng Index and Mainland China Equity Markets Edge Higher

The Hang Seng Index gained 0.19% to 24,907 in morning trading, bringing the crucial 25,000 resistance level into sight. Meanwhile, Mainland China’s CSI 300 and Shanghai Composite Index advanced 0.35% and 0.25%, respectively.

Chinese trade data for July lifted sentiment, contributing to gains across the Hong Kong and Mainland China equity markets in the week ending August 8. However, the potential for higher US tariffs on Chinese goods and on transshipments to the US could affect China’s trade terms and broader economy. While markets expect an extension, with both sides wanting to avoid an escalation in the trade war, uncertainty about Trump’s tariff plans capped the morning gains.

On Friday (August 8), US equity markets posted gains amid rising bets on multiple Fed rate cuts. The Nasdaq Composite Index climbed 0.98%, while the Dow and the S&P 500 rose 0.47% and 0.78%, respectively. According to the CME FedWatch Tool, the chances of a September Fed rate cut increased from 80.3% on August 1 to 88.9% on August 8.

Fed Vice Chair of Supervision Michelle Bowman supported a more dovish rate path on Saturday, August 9, reportedly saying:

“Taking action at last week’s meeting would have proactively hedged against the risk of a further erosion in labor market conditions and a further weakening in economic activity.”

Tech and EV Stocks Send the Hang Seng Index Higher

It was a mixed morning for high-profile electric vehicle (EV) and tech stocks as crucial earnings results approached. Tencent (0700) fell 0.78%, while Baidu (9888) and Alibaba (9988) climbed 0.70% and 1.29%, respectively. Tencent Holdings will release its earnings on Wednesday, August 13, with Alibaba’s earnings out on Friday, August 15.

Meanwhile, Li Auto (2015) dropped 0.52%, while BYD (1211) and Geely Auto gained 1.08% and 2.82%, respectively.

Concerns about the US government denying licenses for chip exports to China eased, lifting demand for tech and EV stocks. CN Wire reported:

“Nvidia Corp. and Advanced Micro Devices Inc. have agreed to pay 15% of their revenues from chip sales to China to the US government as part of a deal with the Trump administration to obtain export licenses, according to a person familiar with the matter.”

Technical Setup: Hang Seng Index Eyes 25,000 on Truce Extension Hopes

Despite hovering below the 25,000 level, the Hang Seng Index traded above the July congestion zone and the 50-day EMA, indicating a bullish bias.

An extension to the trade war truce, progress toward a trade deal, and fresh stimulus from Beijing could send the Hang Seng Index above the 25,000 level. Sustained buying could open the door to testing the July 24 high of 25,736 and bring the 26,000 mark into sight.

Conversely, an escalation in the US-China trade war and Beijing’s silence on fresh stimulus may weigh on sentiment. A break below the 24,500 level could pave the way toward the 50-day EMA. If the Index breaches this support, bearish momentum could drag the Index toward the crucial 24,000 support level.

Hang Seng Technical Outlook

• Resistance: 25,000, 25,736, then 26,000.
• Support: 24,500, the 50-day EMA (24,386), then 24,000.
• The short-term bias remains bullish, but it hinges on US-China trade headlines, Beijing’s stimulus measures, corporate earnings, and incoming Chinese economic data.

Hang Seng Forecast: Will the Index Drop Below 24,500 or Revisit 25,736?

After the morning gains, the Hang Seng Index pulled away from July’s congestion zone. Hopes for an extension of the trade war truce, a Fed rate cut, and confidence in Beijing delivering fresh stimulus lifted risk appetite. However, uncertainties about the effect of existing tariffs on China’s trade terms, consumer sentiment, and domestic demand have left the Index below the July 24 high of 25,736.

Higher tariffs would weaken external demand and intensify domestic competition, further exacerbating company profit margins. Weaker profits could force firms to manage costs, potentially affecting the labor market and private consumption.

On the other hand, fresh stimulus measures aimed at boosting domestic demand and a US-China trade deal could drive the Hang Seng Index toward 25,736, bringing the 26,000 level into play.

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