Hang Seng Index News: Trade Progress, Data Drive Gains – Weekly Recap

Stronger PMI and Trade Data Lift Market Mood

Fresh signs of economic resilience in China sent the Hang Seng Index higher last week as US-China trade talks continued to progress. US Treasury Secretary Scott Bessent fueled hopes for a trade deal, stating:

“I believe that we have the makings of a deal that will benefit both of our great nations. Thanks to the powerful bond between President Trump and President Xi, I am optimistic about the path forward.”

China’s economic indicators and progress toward a trade deal eased fears of an economic slowdown, lifting sentiment.

Mainland China markets also advanced as service sector PMIs and trade data boosted hopes for Beijing to achieve its 5% GDP growth target.

Hong Kong and Mainland Markets Move Toward 2025 Highs

The Hang Seng Index advanced 1.43% in the week ending August 8, partially reversing the previous week’s 3.47% slide, closing at 24,859. Mainland China’s CSI 300 and Shanghai Composite Index posted weekly gains of 1.23% and 2.11%, respectively.

US equities also ended the week in positive territory. The Nasdaq Composite Index rallied 3.87%, closing at a record high. The Dow and the S&P 500 rose 1.35% and 2.43%, respectively.

Housing Policy Eases Boost Property Stocks

Rising expectations of a September Fed rate cut and changes to China’s housing policies sent the Hang Seng Mainland Properties Index up 3.16% in the week. Notably, Longfor Group (0960) rallied 5.62%.

Key changes to housing regulations included:

• Lower minimum downpayment ratio for second homes.
• Higher maximum loan for second homes.
• No restrictions on home purchases for eligible households outside the fifth ring.

Tech Sector Recovers, EV Makers See Mixed Results

Tech giants Baidu (9888) and Tencent (0700) rose 0.18% and 4.15%, respectively, driving the Hang Seng Tech Index up 1.17%.

However, electric vehicle (EV) stocks posted mixed performances. BYD (1211) and Li Auto (2015) slid 4.3% and 3.98%, respectively, while Geely Auto (0175) gained 4.25%.

Retail sales of passenger cars slid by 12.4% month-on-month in July, while NEV retail sales fell 11.2%, weighing on sentiment.

Economic Data Beats Forecasts, Trade Data Wows

The S&P Global China General Services PMI increased from 50.6 in June to 52.6 in July. New work rose at the fastest pace in a year, with external demand rising for the first time in three months. July’s numbers showed Beijing’s policies targeting domestic demand gained traction.

Trade data also impressed, lifting demand for HK and Mainland-listed stocks. Exports surged 7.2% year-on-year in July, accelerating from June’s 5.8% rise. Imports jumped 4.1% after increasing 1.1% in June. July’s numbers signaled robust demand for Chinese goods despite US tariffs on shipments.

Hang Seng Faces Key Test Between 24,500 Support and 25,500 Resistance

The Hang Seng Index briefly fell below the crucial 24,500 support level before recovering. China’s economic data sent the Hang Seng Index above the crucial 25,000 resistance level before retreating. Despite the late pullback from weekly highs, the Index remained above the 50-day Exponential Moving Average (EMA), indicating a bullish bias.

Progress toward a US-China trade deal, upbeat incoming Chinese economic data, and stimulus measures from Beijing could lift sentiment. A breakout above last week’s high of 25,115 could pave the way toward the July 24 high of 25,736 and potentially 26,000.

Conversely, renewed US-China trade tensions and the absence of stimulus could push the Index toward the 24,500 level. If broken, the bears may target the 50-day EMA.

Hang Seng Technical Forecast

• Resistance: 25,115, 25,736, and then 26,000.
• Support: 24,500, the 50-day EMA at 24,365, and 24,000.
• Short-term Bias: Bullish, contingent on US-China trade developments, upcoming Chinese economic data, and fresh stimulus from Beijing.

Forecast Summary

The Hang Seng moved away from its July congestion zone (23,650 – 24,215) and remained above the 50-day EMA, signaling bullish momentum. In the week ahead, US-China trade talks, China’s economic data, and any fresh stimulus from Beijing could influence risk appetite. Trade headlines and Chinese data could be crucial.

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.