Hang Seng Index News: Bulls Eye 24,250 as US-China Trade Talks Revive Risk Appetite

US-China Trade Talks and US Jobs Report Boost Risk Appetite; Bulls Eye 24,250

Asian markets surged as US-China trade talks resumed, but weak China data raised doubts about sustained gains. Easing US recession risks and US-China trade developments fueled demand for risk assets on Monday, June 9. However, economic data from China capped the morning gains. The Hang Seng Index reversed Friday’s losses in early trading, with tech stocks in recovery.

Markets remain focused on China’s upcoming trade data, the second round of US-China trade talks, and stimulus cues from Beijing after reacting to China inflation data earlier in the morning session. These key drivers could determine whether the index drops below 24,000 or breaks above 24,250.

Hang Seng Index Climbs Ahead of Trade Talks

US equity markets posted gains on June 6, with the Nasdaq Composite Index rallying 1.20%, as May’s US Jobs Report eased recession risks. The Hang Seng Index advanced 1.32% to 24,108 in early trading on June 9. Mainland China’s markets also posted gains in hopes for a US-China trade deal. The CSI 300 and Shanghai Composite Index rose 0.16% and 0.14%, respectively.

Tech Stocks Advance Ahead of Trade Talks

Improving risk sentiment boosted demand for tech stocks. The Hang Seng Tech Index jumped 2.18%, with Baidu (09888) and Alibaba (09988) gaining 1.61% and 1.46%, respectively. However, EV stocks delivered mixed performances despite Tesla (TSLA) rallying 3.67% on June 6. BYD (1211) and Geely Automobile (00175) dropped 0.65% and 2.45%, respectively, while Li Auto (2015) gained 1.37%.

US-China Trade Talks in Focus

Easing US-China trade tensions has enabled delegates from both sides to meet in London on Monday. CN Wire reported:

“Chinese Ministry of Foreign Affairs: At the invitation of the British government, Vice Premier He Lifeng will visit the United Kingdom from June 8 to 13 to hold the first meeting of the Sino-US Economic and Trade Consultation Mechanism with the United States.”

Updates from London will dictate near-term trends for Hong Kong and Mainland China-listed stocks. An end to tariffs and restrictions on chips and rare earth minerals could trigger market rallies. However, reports of deadlock over existing tariffs and restrictions may weigh on risk appetite.

Brian Tycangco, editor at Stansberry Research, remarked on reports of China granting rare earth permits to some US auto suppliers ahead of talks, stating:

“This would indicate some concessions are going to be made by the US side in the upcoming trade talks. Trump admin appears to have already been under enormous pressure from industries dependent on Chinese rare earths.”

China Deflationary Pressures Accelerate

China’s consumer and producer price data fueled concerns about domestic demand and consumption. Consumer prices fell 0.1% year-on-year (YoY) in May after declining 0.1% in April, while prices fell 0.2% month-on-month (April: +0.2%). Meanwhile, producer prices were down 3.3% YoY in May, accelerating from the 2.7% drop in April.

May’s data showed deflationary pressures building midway through Q2, indicating a weakening demand backdrop. Weaker consumption may challenge the effectiveness of Beijing’s stimulus measures and the 5% GDP target.

China Exports to Slow as US Tariffs Bite

China’s trade data will also face scrutiny as the US and China prepared to resume trade negotiations. Economists forecast exports to rise 5% YoY in May, down from 8.1% in April, reflecting the impact of tariffs on demand for Chinese goods. Imports are expected to drop 0.9% YoY, following a 0.2% decline in April, signaling weaker domestic demand for overseas goods.

Key Levels: 24,000 Support or 24,250 Retest

After the early gains, the Hang Seng Index continued trading above its recent trading band, supporting the return to 24,000. Progress toward a trade deal or trade terms could boost risk sentiment, potentially sending the Hang Seng Index above 24,250. A sustained move above 24,250 could pave the way to retesting the March high of 24,874. Any fresh stimulus from Beijing may accelerate a breakout toward 24,874.

Conversely, trade deal setbacks could impact market sentiment. A drop below 24,000 may bring 23,500 into play. Increased selling pressure could expose the index to 23,000 and the 50-day Exponential Moving Average (EMA).

Tech and EV stocks remain heavily exposed to trade developments.

Hang Seng Technical Outlook

• Resistance: 24,250, then 24,874.
• Support: 24,000, 23,500, then 23,000 and the 50-day EMA at 22,927.
• Bias: Neutral-to-Bullish in the short-term, dependent on trade headlines, upcoming trade data, and stimulus cues.

Forecast Summary: Can the US and China Reach a Deal, or Will 24,000 Give Way First?

Despite uncertainty about tariffs and China’s economic data, the Hang Seng Index trades above May and early June’s trading range. Concerns about a trade deal or a lack of stimulus from Beijing remain market headwinds. However, speculation about fresh stimulus, combined with updates from today’s trade talks, may lift sentiment. Until then, resistance at 24,250 will likely cap gains.

For real-time updates on US-China trade talks, global stimulus efforts, and central bank signals, follow our live coverage and consult our economic calendar.