Hang Seng Index News: Trump’s Tariffs Stir Volatility as China Producer Prices Slide

Trade Headlines and China Data Send the Hang Seng Index Lower

Trade headlines continued to influence sentiment on Tuesday, July 8, setting the tone for the Asian market session on Wednesday, July 9. President Trump followed Monday’s ‘tariff letters’ with a 50% levy on copper imports. In addition, Trump warned of imminent tariffs on pharmaceuticals and semiconductors.

Inflation and producer prices from China added further pressure on Hong Kong-listed stocks.

On Wednesday, July 9, the Hang Seng Index reversed Tuesday’s gains in early trading, with electric vehicle (EV) and tech stocks under pressure.

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

Hang Seng Index Slides on Tariffs and China Producer Prices

US equity markets posted mixed performances on July 8 as tariff headlines weighed on sentiment. The Nasdaq Composite Index gained 0.03%, while the Dow dropped 0.37%. Meanwhile, the Hang Seng Index slid 0.86% to 23,941 on July 9. A sharper fall in China’s producer prices, tariffs on copper, and the threat of a US-China proxy trade war impacted the Hang Seng Index. Producer prices fell 3.6% year-on-year in June after declining 3.3% in May.

However, Mainland China markets posted early gains. The CSI 300 and Shanghai Composite Index rose 0.16% and 0.22%, respectively. Hopes of fresh stimulus from Beijing likely bolstered demand for Mainland stocks.

EV and Tech Stocks Slide on Tariffs and Producer Price Trends

Tariffs on copper and sliding producer prices weighed on demand for EV and tech stocks. Tech giants Baidu (09888) and Alibaba (09988) fell 1.12% and 1.03%, respectively, sending the Hang Seng TECH Index down 1.16%.

EV stocks BYD (01211) and Li Auto (02015) posted early losses of 1.47% and 1.41%, respectively. A larger-than-expected fall in Chinese producer prices fueled concerns about company profits as domestic competition intensified. US tariffs on transshipments from Asia and the 50% tariff on copper were also headwinds.

Copper is an essential commodity for car makers and the tech sector. Higher copper prices could further impact profits as intensifying competition and price wars impact margins. Copper soared 9.94% on July 8 and gained a further 1.08% in early trading on July 9.

Trump Rolls Out Copper Tariffs and Targets Pharma and Semiconductors

Trump announced a 50% tariff on copper on July 8, impacting the auto and tech sectors. The threat of tariffs on pharmaceuticals and semiconductors and the US administration’s focus on transshipments added to the negative sentiment.

The US administration announced a 40% levy on transshipments from Vietnam and a 32% tariff on Indonesian goods. In May, China’s exports to Vietnam jumped 30% year-on-year (YoY), while exports to Indonesia rose 25% as exports to the US plunged 43%. Notably, total exports increased by 4.8%, suggesting China re-routed exports through Indonesia and Vietnam to dodge US tariffs. Transshipment tariffs would likely affect China’s exports.

As trade tensions heat up ahead of the August 1 deadline, trade negotiations will now be crucial for China and the broader region.

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

On July 9, the Hang Seng Index continued to trade within the June congestion zone. However, despite this morning’s losses, the Index remained above its 50-day Exponential Moving Average (EMA), indicating a bullish bias.

Easing trade tensions or stimulus rollouts from Beijing could drive the Index above 24,000. A sustained move through 24,000 may enable the bulls to target the June 25 high of 24,533. The March high of 24,874 would be the next key resistance level. Conversely, a drop below 23,750 could bring the 50-day EMA and the 23,500 level into play.

Hang Seng Technical Outlook

• Resistance: 24,000, 24,533, and then 24,874.
• Support: 23,750, then the 50-day EMA at 23,566 and 23,500.
• Short-term Bias: Bullish but hinged on trade headlines, upcoming Chinese trade data, and Beijing’s stimulus signals.

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

The Hang Seng Index traded within its congestion zone but held above the 50-day EMA as tariff developments drove sentiment.

Trump’s tariffs on copper and focus on transshipments from Asia could impact demand for Chinese goods. Weaker overseas demand and higher copper prices may further pressure China’s corporate profits, labor market, and economy.

Higher tariffs, a US-China proxy trade war, and Beijing’s silence on stimulus may send the Index toward the 50-day EMA and 23,500. Conversely, easing trade tensions or fresh stimulus may boost sentiment, bringing the March high of 24,874 into sight.

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.