Hang Seng Index News: Trade Talks and Tech Gains Fuel Bullish Momentum Outlook

Fed Cut Bets Lift Hang Seng—Will Trade Tensions Derail the Rally?

US economic indicators and Fed speakers fueled speculation about a Q3 Fed rate cut, driving demand for risk assets. This week, Fed speakers aligned with President Trump’s calls for rate cuts. Meanwhile, lingering geopolitical tensions and Trump’s fast-approaching July 9 tariff deadline also influenced market sentiment.

On June 27, the Hang Seng Index trended higher, with tech stock gains offsetting losses across EV and real estate stocks.

Trade headlines, Middle East developments, and stimulus speculation continue to drive market sentiment. These factors could determine whether the Hang Seng Index will drop below 24,000 or revisits 25,000.

Hang Seng Index Gains on Fed Rate Cut Expectations

US equity markets posted gains on June 26 on Fed rate cut hopes. The Nasdaq Composite Index climbed 0.97%. Meanwhile, the Hang Seng Index rose 0.28% to 24,393 in morning trading.

Tech stocks benefited from sentiment toward the Fed rate path. However, real estate stocks faced increasing selling pressure after the Hong Kong Monetary Authority (HKMA) intervention in the currency markets on June 25. The intervention dried up liquidity, increasing the risk of higher local interest rates.

Mainland China-listed stocks also advanced as investors reacted to Citi (C) revising its 2025 GDP forecast from 4.7% to 5%. The CSI 300 and Shanghai Composite Index posted morning gains of 0.13% and 0.19%, respectively. However, uncertainty about a US-China trade deal and weak economic data from the Mainland capped the upside.

Real Estate and Tech Stocks Diverge

Lingering concerns about the HKMA intervention pushing local interest rates higher pressured the Hang Seng Mainland Properties Index, down 0.82%. Henderson Land Development (00012) fell 1.42%, extending its losses from Thursday. Electric Vehicle (EV) stocks also came under pressure, with BYD (01211) and Li Auto (02015) sliding 2.07% and 2.04%, respectively.

Meanwhile, the Hang Seng TECH Index rose 0.16%. Alibaba (09988) and JD.com advanced 0.18% and 1.23%, respectively.

Rate Cut Odds Rise on Weak Data and Fed Signals

The US economy shrank by 0.5% quarter-on-quarter in Q1, down from an initial estimate of a 0.2% contraction. The Q1 numbers strengthened the case for a more dovish Fed rate path. The Fed’s Mary Daly and Susan Collins signaled support for further monetary easing. According to the CME FedWatch Tool, the probability of a September Fed rate cut rose from 89.4% to 93.2% on June 26.

Easing geopolitical tensions also bolstered demand for risk assets as Iran and Israel held the ceasefire.

Mainland Industrial Profits Underscore the Tariff Effect

On June 27, China’s industrial profit numbers for January to May pressured Mainland China stocks, unexpectedly falling 1.1% year-on-year (YoY). Notably, May profit growth plunged 9.1% YoY after rising 3% in April.

According to CN Wire, China’s mining sector was the key drag, with profit growth tumbling 29% YoY.

May’s data underscored the importance of a US-China trade deal amid speculation that an agreement has already been inked. The Kobeissi Letter reported:

“US Commerce Secretary Lutnick says the US-China trade deal was signed 2 days ago.”

Despite reports suggesting a signed US-China trade deal, the absence of confirmation from Beijing limited the market response.

Technical Setup: 24,500 Resistance or Drop Below 24,000 as Geopolitical Risks Linger

On June 27, the Hang Seng Index traded above its May-June congestion zone, holding around the June high of 24,533. Significantly, the Index continued to trade above the 50-day Exponential Moving Average (EMA), signaling bullish momentum.

Easing Middle East tensions and a balanced US-China trade deal could send the Index above the June high of 24,533. Sustained buying pressure may open the door to retesting the March high of 24,874. Conversely, a break below 24,000 could expose 23,500 and the 50-day EMA.

Hang Seng Technical Outlook

• Resistance: 24,533, and then 24,874.
• Support: 24,000, 23,500, then the 50-day EMA at 23,420.
• Short-term Bias: Bullish but contingent on the Iran-Israel truce, US-China trade terms, and stimulus-related news.

What’s next for the Hang Seng? 25,000 or Drop Below 24,000?

The Hang Seng Index continues trading above its recent congestion range on June 27. While reports of a US-China trade deal are market-positive, the details may indicate whether both sides will stick to the agreement. An imbalanced agreement favoring the US may pressure risk assets, potentially pushing the Index below 24,000. Conversely, a balanced deal could lift sentiment, sending the Index toward the March high of 24,874.

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.