Hang Seng Index News: Will Powell’s Speech or Beijing Drive the Next Market Move?

Hang Seng Index Steadies — Will It Avoid 25,000?

Markets are caught between cooling U.S. jobs data and resilient PMI figures, leaving traders to guess whether Powell will blink at Jackson Hole.

The Hang Seng Index clawed back losses Friday, buoyed by whispers of fresh Beijing stimulus and hopes China can still hit its 5% growth target. However, the gains were modest given market apprehension ahead of Fed Chair Powell’s looming Jackson Hole speech. Elsewhere, the Nikkei was flat, while the ASX 200 fell 0.19%.

Near-term key drivers include Fed Chair Powell’s speech, corporate earnings, upcoming Chinese PMI data, and any fresh stimulus from Beijing.

Hang Seng Index and Mainland China Equity Markets Climb

The Hang Seng Index rose 0.39% to 25,202 in morning trading. Meanwhile, Mainland China’s equity markets eyed a three-day winning streak. The CSI 300 and the Shanghai Composite Index posted early gains of 0.52% and 0.35%, respectively.

This week’s stimulus pledges from Beijing lifted investor sentiment, sending the CSI 300 to a new 2025 year-to-date high. The Shanghai Composite Index hovered close to its 10-year high. Despite the Mainland equity market gains, economists see emerging market funds underweight in Chinese stocks, suggesting stronger gains ahead.

China Beige Book commented:

“China currently accounts for 28% of portfolios across 300 actively-managed emerging-market funds overseeing a combined $617 billion, the survey shows. That’s up from 22.5% a year earlier, though the group as a whole remains 340 bps underweight.”

Overnight, US markets posted losses as private sector PMI data tempered bets on Fed rate cuts. The Dow fell 0.34%, with the Nasdaq Composite Index and the S&P 500 declining 0.34% and 0.40%, respectively.

The US Composite PMI rose from 55.1 in July to an 8-month high of 55.4 in August. Service providers hired at the fastest rate in seven months, while firms across both sectors reported higher import prices. Service sector price inflation reached its highest level since August 2022.

August’s flash PMI numbers overshadowed jobless claims data. Initial jobless claims increased from 224k (week ending August 9) to 235k (week ending August 16). According to the CME FedWatch Tool, the chances of a September Fed rate cut fell from 82.4% on August 20 to 75.5% on August 21.

EV and Tech Stocks Rebound as Dip Buyers Return

Dip-buyers jumped back into Hong Kong’s heavyweights Friday, driving EV and tech names higher despite weak earnings and private consumption signals. Electric vehicle (EV) stocks led the morning gains, with BYD (1211) rallying 1.44%. Tech heavyweight Tencent Holdings (0700) climbed 1.43%, with Alibaba (9988) and Baidu (9888) also advancing.

Power consumption numbers indicated continued economic momentum early in the third quarter, raising demand for Hong Kong and Mainland-listed stocks. Brian Tycangco, editor at Stansberry Research, commented:

“An 8.6% YoY hike in power consumption. China is collapsing backwards.”

The market’s near-term outlook remains highly event-driven. Downside risks linger unless Beijing acts decisively or Powell boosts rate cut bets.

Technical Setup: Hang Seng Index Rebound Hinges on the Fed and Beijing

Despite the morning gains, the Hang Seng Index remains within the mid-August congestion zone, underlining market uncertainty. Nevertheless, the Index trades above key technical levels, maintaining a cautiously bullish bias. The outlook hinges on several key events.

Hang Seng Index: Key Scenarios to Watch

Bullish Scenario: A dovish Fed Chair Powell, new stimulus from Beijing, upbeat Chinese PMI data, or a US-China trade deal. These factors could send the Hang Seng Index toward its 2025 high of 25,767.

Bearish Scenario: A hawkish Fed Chair Powell, Beijing’s silence on policy support, weak Chinese data, or stalled US-China trade talks. These factors may push the Index below 25,000, exposing the 50-day Exponential Moving Average (EMA).

Hang Seng Forecast: Can the Index Hold onto Early Gains?

The Hang Seng Index trades below its year-to-date high of 25,767, leaving the bulls vulnerable. Selling pressure could intensify if Fed Chair Powell raises concerns about inflation and downplays a cooling labor market. However, meaningful stimulus targeting the housing sector, the labor market, and private consumption could boost sentiment.

Will Powell or Beijing have the final say? The next several sessions could be pivotal. Follow our live coverage and consult our economic calendar.