Hang Seng Index News: Traders Eye CPI and Earnings After 90-Day Truce Extension

Hang Seng Index Dips Amid Pre-US CPI Report Caution

The US and China extend the 90-day trade war truce, leaving the looming US CPI Report to rattle sentiment. The Hang Seng Index dipped in morning trading on Tuesday, August 12. US President Trump signed an executive order extending the US-China trade war truce by 90 days. The extension means the US and China avoid a full-blown trade war as trade negotiations continue.

This week, US-China trade news, corporate earnings, and crucial Chinese indicators, such as retail sales, unemployment, and industrial production, will influence market trends. Investors should also consider any stimulus signals from Beijing, aimed at boosting domestic demand.

These factors could dictate whether the Index will drop below 24,500 or will target 26,000.

Hang Seng Index and Mainland China Equity Markets Diverge

The Hang Seng Index fell 0.40% to 24,807 in morning trading, dropping further back from the crucial 25,000 resistance level. In contrast, Mainland China’s CSI 300 and Shanghai Composite Index posted morning gains of 0.55% and 0.37%, respectively.

The 90-day truce drove demand for Mainland-listed stocks. According to CN Wire, China’s Commerce Ministry announced a 90-day tariff truce with the US. Overnight, President Trump stated:

“I have just signed an Executive Order that will extend the Tariff Suspension on China for another 90 days. All other elements of the Agreement will remain the same.”

China’s trade data suggests that keeping tariffs unchanged may have minimal impact on it’s trade terms. Exports surged 7.2% year-on-year in July, a sharp pickup from June’s 5.8% increase. Meanwhile, imports jumped 4.1% after rising 1.1% in June.

However, US markets struggled overnight as investors turned their focus to the looming US CPI Report. On Monday (August 11), the Dow dropped 0.45%, while the Nasdaq Composite Index and the S&P 500 fell 0.30% and 0.25%, respectively.

July’s US CPI Report, out on August 12, could materially affect the Fed rate path. Economists expect headline and underlying inflation to accelerate in July. Hotter-than-expected figures could curb Fed rate cut bets and weigh on risk assets, while cooler inflation may fuel speculation about multiple cuts, lifting sentiment.

Tech Stocks Send the Hang Seng Index Lower

Interest rate-sensitive tech stocks left the Hang Seng Index in negative territory in the morning session. Tech giants Alibaba (9988) and Baidu (9888) slid 1.52% and 0.99%, respectively, leaving the Hang Seng Tech Index down 1.04%. Tencent Holdings and Alibaba will release earnings results on August 13 and 15, respectively.

Meanwhile, Li Auto (2015) declined 1.68%, while BYD (1211) and Geely Auto climbed 0.45% and 0.48%, respectively. Geely Auto is set to release its earnings results on August 14. Chinese vehicle sales increased 14.7% year-on-year in July, up from 13.8% in June, supporting the broader auto sector.

Technical Setup: Hang Seng Index Break Above 25,000 Hinges on Earnings and Inflation

While hovering below the 25,000 level, the Hang Seng Index remains above the July congestion zone and the 50-day EMA, signaling a bullish bias.

Progress toward a trade deal, cooler US inflation, upbeat Chinese data, and new stimulus from Beijing could drive the Hang Seng Index above the 25,000 mark. Sustained buying could pave the way toward the July 24 high of 25,736.

Conversely, renewed US-China trade tensions, hotter US inflation, weaker China data, and the absence of fresh stimulus may weigh on sentiment. A drop below the 24,750 mark could allow the bears to target the 24,500 level and the 50-day EMA. If the Index breaches this support, bearish momentum could push the Index toward the psychological 24,000 support level.

Hang Seng Technical Outlook

• Resistance: 25,000, 25,736, then 26,000.
• Support: 24,750, 24,500/50-day EMA (24,403), then 24,000.
• The short-term bias remains bullish, but it depends on US-China trade news, Beijing’s stimulus measures, corporate earnings, and incoming Chinese/US economic data.

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

After the morning losses, the Hang Seng Index dropped toward July’s congestion zone. Uncertainties about the Fed rate path and US-China trade talks continue to leave the Index below the 2025 high of 25,736.

A fair US-China trade agreement could be the next key price catalyst. Conversely, rising trade tensions could trigger a sharp pullback if economic data and corporate earnings disappoint.

Weaker earnings and slowing economic momentum could reflect the early effect of tariffs on China’s economy. A deteriorating macroeconomic backdrop may impact domestic demand, pressuring corporate profits.Waning profits could lead to cost-cutting measures. Firms may reduce their staffing levels to manage costs, dampening consumer sentiment and spending.

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