Hang Seng Index News: Ceasefire Relief and Fed Rate Cut Bets Lift Market Sentiment

Middle East Ceasefire and Powell Testimony Fuel Market Optimism

The crucial Iran-Israel ceasefire continued driving demand for risk assets on Tuesday, June 24, as WTI Crude Oil Prices dropped to a nine-day low on easing supply disruption jitters. WTI Crude Oil fell 3.41% on June 24, closing at $64.495. Notably, crude had struck a June 23 high of $75.795 before the ceasefire-triggered sell-off.

Fed Chair Powell testimony on Capitol Hill added momentum, signaling a potential Q3 Fed rate cut.

On June 25, the Hang Seng Index extended its gains from June 24, with real estate and tech stocks advancing strongly.

Iran-Israel ceasefire-related news, trade developments, and stimulus chatter remain key drivers. These factors could determine if the Hang Seng Index drops below 24,000 or retargets 25,000.

Hang Seng Index Advances on Fed Rate Cut Bets

US equity markets rallied on Tuesday, June 24, with the Nasdaq Composite Index climbing 1.43%. Meanwhile, the Hang Seng Index rose 0.63% to 24,330 in morning trading on Wednesday, June 25 as investors reacted to Fed Chair Powell’s overnight testimony. Mainland China’s markets edged higher, with the CSI 300 and Shanghai Composite Index up 0.11% and 0.03%, respectively. US-China trade-related uncertainties capped the upside.

Real Estate and Tech Stocks Get Fed Chair Powell Boost

Fed Chair Powell boosted risk sentiment as Middle East tensions eased, tempering concerns about oil price and inflation spikes that had led to more hawkish central bank policy stances. A more dovish Fed stance and rising bets on rate cuts drove demand for rate-sensitive stocks, including real estate and tech.

The Hang Seng Mainland Properties Index rallied 1.19% in morning trading, with the Hang Seng TECH Index up 0.50%. Tech heavyweights Alibaba (09988) and Baidu (09888) posted morning gains of 1.51% and 1.90%, respectively.

US Consumer Confidence and Fed Chair Powell Fuel Fed Rate Cut Expectations

On June 24, Fed Chair Powell delivered the first day of testimony amid increased scrutiny of the Fed keeping interest rates steady while other central banks cut rates multiple times. While firmly closing the door on a July rate cut, Fed Chair Powell hinted at a potential September rate cut. Lower borrowing costs could drive demand for risk assets.

Nick Timiraos, Chief Economics Correspondent at The Wall Street Journal, remarked on Powell’s testimony, stating:

“He pushes back a bit that they could have confidence by July, but sounded more open to September.”

Powell’s testimony coincided with key US economic data releases that showed US consumer confidence unexpectedly slumped. The Conference Board Consumer Confidence Index dropped from 98.4 in May to 93 in June. Notably, the net share of survey respondents who say jobs are plentiful less those who say jobs are hard to get fell, while one year ahead inflation expectations declined for the second consecutive month. These trends could bolster expectations of a Q3 Fed rate cut.

Brian Tycangco, editor at Stansberry Research, commented on the consumer confidence data, stating:

“Collapsing consumer confidence is a key indicator of potential economic slowdown and, quite possibly, a recession. Calling the attention of Fed Chair Powell.”

Technical Setup: 24,500 Resistance in Focus as Middle East Tensions Ease

On June 25, the Hang Seng Index traded above the May-June congestion zone, nearing the Q2 high of 24,439. Significantly, the index held above the 50-day Exponential Moving Average (EMA), signaling bullish momentum.

An unbroken Iran-Israel ceasefire and progress toward a US-Iran nuclear agreement may send the index above a June 11 high of 24,439. A sustained move through 24,439 could pave the way to the March high of 24,874. Conversely, a break below 24,000 may enable the bears to target 23,500, potentially exposing the 50-day EMA.

Hang Seng Technical Outlook

• Resistance: 24,439, and then 24,874.
• Support: 24,000, 23,500, then the 50-day EMA at 23,336.
• Short-term Bias: Bullish but hinged on Middle East news, trade developments, and stimulus-related headlines.

Outlook: Will the Ceasefire Hold or Will the Index Drop Below 24,000?

The Hang Seng Index continued trading above its recent congestion range on June 25. However, renewed Iran-Israel tensions could raise selling pressure, potentially sending the index below 24,000. On the other hand, progress toward a US-Iran nuclear deal may lift sentiment. In the meantime, resistance at 24,500 could limit the upside without positive US-China trade headlines.

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.