Hang Seng Index News: Tech Surge, Tariff Relief Spark Bullish Momentum

Hang Seng Index Diverges from US Market Trends on Trade Developments

President Trump announced the first set of tariff hikes effective August 1 on July 7, impacting US markets. The tariffs mirrored the April 2 Liberation Day tariffs, potentially delaying Fed rate cuts. However, the first batch of tariff announcements were silent on China, lifting demand for Mainland and Hong Kong-listed stocks.

On Tuesday, July 8, the Hang Seng Index reversed Monday’s losses in early trading, with electric vehicle (EV) and tech stocks leading the gains.

Key Chinese data, trade headlines, and central bank policy cues will continue to drive sentiment. These factors may determine whether the Index breaks below 23,500 or revisits 24,500.

Hang Seng Index Rallies on Tariff Relief

US equity markets posted losses on July 7 as investors reacted to trade developments. The Nasdaq Composite Index dropped 0.92%, while the Dow declined by 0.94%. Meanwhile, the Hang Seng Index climbed 0.86% to 24,093. China’s absence from Trump’s tariff rollouts boosted sentiment.

Mainland China markets also posted morning gains. The CSI 300 and Shanghai Composite Index advanced by 0.74% and 0.58%, respectively.

EV and Tech Stocks Rally on Trade Headlines

Easing fears of US tariff hikes on Chinese goods boosted demand for EV and tech stocks. Baidu (09888) rallied 3.14%, while Alibaba (09988) and JD.com (09618) gained 1.04% and 2%, respectively, driving the Hang Seng TECH Index up 1.4%.

EV stocks BYD (01211) and Geely Automobile (00175) rose 0.91% and 1.59%, respectively.

However, concerns over a potential US-China proxy war capped the gains.

Trump Targets Asia with Liberation Day Tariffs

President Trump announced tariffs on Asian countries, mirroring the Liberation Day levies from April 2. Notably, Japan and South Korea face 25% tariffs. Indonesia, Laos, Malaysia, Myanmar, and Thailand also face punitive levies on exports to the US. Trump warned that any retaliation would lead to higher tariffs.

CN Wire reported the latest trade developments, stating:

“Donald Trump said the August 1 effective date for U.S. tariffs was firm, but that he was open to extensions if countries made proposals. Asked if the deadline was firm, Trump said: ‘I would say firm, but not 100% firm. If they call up and they say we’d like to do something a different way, we’re going to be open to that.”

Notably, Indonesia faces a 32% tariff, raising pressure on Jakarta to curb transshipment practices. Last week, Vietnam accepted a 20% tariff on exports to the US and 40% levies on transshipments to the US.

While China’s exports to the US plunged 43% year-on-year in May, total exports rose 4.8%. Notably, exports to Indonesia and Vietnam surged 25% and 30%, respectively, YoY in May,.

Natixis Asia Pacific Chief Economist Alicia Garcia Herrero recently commented on Southeast Asia’s dependence on China, stating:

“Vietnam and Cambodia also show widest cross-sector vulnerability, including a range of goods in textiles, leather goods, metals, machinery, and electrical equipment. Cambodia has even more sectors heavily dependent on Chinese intermediaries.”

Trade developments ahead of the August 1 deadline will now be crucial for China and the broader region.

Technical Setup: 24,500 Resistance or 23,500 Support?

On July 8, the Hang Seng Index traded within the June congestion zone. However, despite a pullback in July, the Index trades above its 50-day Exponential Moving Average (EMA), signaling a bullish bias.

Easing trade tensions or stimulus signals from Beijing could drive the Index toward the June 25 high of 24,533, bringing the March high of 24,874 into play. Conversely, a drop below 24,000 could expose the 50-day EMA and the 23,500 level.

Hang Seng Technical Outlook

• Resistance: 24,533, and then 24,874.
• Support: 24,000, then the 50-day EMA at 23,549.
• Short-term Bias: Bullish but contingent on trade developments, incoming Chinese economic data, and Beijing’s stimulus guidance.

Hang Seng Index Forecast: Will the Index Break 24,500 or Drop Toward 23,500?

The Hang Seng Index remained within its congestion zone while trading above the 50-day EMA as the market focus turned toward US tariffs on transshipments.

Despite the latest easing of trade restrictions, Trump’s tariff announcements highlighted the US administration’s focus on China’s attempts to dodge levies. Weakening overseas demand through punitive tariffs on transshipments may further impact China’s corporate profits, labor market, and economy.

A US-China proxy trade war and the absence of stimulus from Beijing could potentially push the Index toward 23,500. Conversely, easing trade friction or new stimulus may lift sentiment, sending the Index toward the March high of 24,874.

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