Hang Seng Index News: Tech and EV Rally Lifts Index on Trade Talk Optimism

Optimism on US-China Trade Talks and Beijing Stimulus Fuels Rally, Bulls Target 24,000

Investor optimism over easing in US-China trade tensions lifted market sentiment on Wednesday, June 4. Despite concerns over Beijing’s export restrictions on rare earth minerals, Trump’s plans to call Chinese President Xi Jinping this week drove demand for Hong Kong and Mainland China-listed stocks.

A weaker-than-expected Caixin Manufacturing PMI also raised expectations of further stimulus from Beijing. Beijing could respond to a prolonged US-China trade war with fresh stimulus to drive domestic demand. Brian Tycangco, editor at Stansberry Research, remarked on the Caixin Manufacturing PMI data, stating:

“Likely explanation: April was when Trump launched reciprocal tariffs. But factory expansion that month possibly due to orders pushing through in the likelihood Trump reversed, a deal was made, or new routes could be used. The month of May also takes into account the Labor Day Holiday that saw the closure of factories all over the country for 1 week. I don’t expect this reading to stay in contraction in June.”

The Hang Seng Index extended its gains from Tuesday in early trading, buoyed by tech and EV stocks that pushed the index higher.

Investor focus remains on further trade developments, the Chinese Services PMI (due June 5), and any stimulus chatter from Beijing. These elements could dictate whether the index breaks below 23,000 or reclaims 24,000.

Hong Kong Stocks Climb on Trade and Stimulus Bets

While US equity markets also advanced on June 3, with the Nasdaq Composite Index gaining 0.81%, hopes for de-escalating trade tensions and stimulus strengthened risk appetite. The Hang Seng Index rose 0.57% to 23,645 in early trading on June 4. Mainland China’s markets also posted gains, with the CSI 300 and Shanghai Composite Index up 0.51% and 0.34%, respectively.

Tech and EV Stocks Lead Gains

The Hang Seng Tech Index climbed 0.63% ahead of the anticipated Trump-Xi call. Tencent Holdings Ltd. (00700) rallied 1.39%, while Baidu (09888) and Alibaba (09988) advanced 1.34% and 0.44%, respectively.

EV stocks extended their gains, with BYD (1211) rallying 2.75% and Li Auto (2015) rising 1.98%. Positive delivery numbers for May continued to support sector momentum.

Key Levels: 23,000 Support or 24,000 Breakout

Wednesday’s gains pushed the Hang Seng Index to the upper band of its recent trading range. A constructive outcome from Trump-Xi talks or upbeat services sector data could lift sentiment, driving a breakout above the May 21 high of 23,917. A return to 24,000 could open the door for a move toward the March high of 24,874. Any new stimulus signals from Beijing would likely accelerate upward momentum.

Conversely, a breakdown in trade talks could trigger a reversal. A fall below 23,000 would bring the 50-day Exponential Moving Average (EMA) into play. Increased selling pressure may expose the 22,000 psychological support level.

Hang Seng Technical Outlook

• Resistance: 24,000, then 24,874.
• Support: 23,000, 50-day EMA at 22,813, then 22,000.
• Bias: Neutral-to-Bullish in the short-term, contingent on trade developments, economic data, and stimulus signals.

Forecast Summary

Despite ongoing volatility, the Hang Seng is trading near the top of its recent trading range. Trade war jitters and Beijing’s silence on stimulus remain market headwinds. However, upbeat Services PMI data or easing trade tensions could drive risk appetite. Until then, market caution may cap gains.

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.