Hang Seng Index News: Rate Jitters, Ceasefire Relief, and Trade in Focus

Fed Under Fire: Trump’s Rate Demands Stir Market Jitters

While the ceasefire between Iran and Israel appeared to be holding, President Trump’s threat of announcing a replacement Fed Chair weighed on market sentiment. Trump continues to attack Fed Chair Powell for not cutting rates, while Powell maintains a wait-and-see stance on monetary policy to assess the effect of tariffs on inflation.

Meanwhile, markets are also grappling with geopolitical risks, economic uncertainty, and Trump’s looming tariff deadline.

On June 26, the Hang Seng Index dipped in morning trading, potentially ending a four-day winning streak. EV, tech, and real estate stocks posted early losses, dragging the index into negative territory.

Trade developments, Middle East headlines, and stimulus chatter remain key near-term drivers. These factors may dictate whether the Hang Seng Index will break below 24,000 or aim for 25,000.

Hang Seng Index Dips Currency Intervention Chatter

US equity markets had a mixed session on Wednesday, June 25. The Nasdaq Composite Index gained 0.31%, while the Dow fell 0.25%. Meanwhile, the Hang Seng Index dropped 0.49% to 24,355 in morning trading. The Hong Kong Monetary Authority (HKMA) intervened in the currency markets overnight, drying up liquidity and risking higher local interest rates. The threat of higher borrowing costs hit real estate and tech stocks.

However, Beijing’s recent pledges to boost domestic consumption bolstered demand for Mainland stocks. The CSI 300 and Shanghai Composite Index advanced 0.09% and 0.18%, respectively. The gains were modest as investors awaited further news on US-China trade talks.

Real Estate and Tech Stocks Slide on Rate Jitters

Concerns about higher local interest rates sent the Hang Seng Mainland Properties Index down 0.16%. Sun Hung Kai Properties (00016) slid 2.85% in morning trading, with Henderson Land Development (00012) dropping 2.96%.

Tech heavyweights Alibaba (09988) and Tencent (00700) posted losses of 2.16% and 0.39%, respectively. EV stocks also trended lower, with BYD (01211) down 1.92%.

Concerns About Fed Independence Counter Middle East Ceasefire Relief

President Trump targeted Fed Chair Powell this week, stating:

“Too Late Jerome Powell, of the Fed, will be in Congress today in order to explain, among other things, why he is refusing to lower the Rate. Europe has had 10 cuts, we have had zero. No inflation, great economy – we should be at least two or three points lower.”

Trump’s comments raised concerns about Fed independence after he suggested alternative Fed Chair candidates. During two days of testimony on Capitol Hill this week, Powell continued to warn that tariffs may push inflation higher in the summer, challenging rate cut bets.

Powell’s concerns about inflation and Trump’s frequent attacks on the Fed Chair pressured risk assets.

Bob Elliott, Chief Investment Officer at Unlimited Funds, commented on Fed policy, stating:

“Tariffs at a time of soft wage growth and weak labor markets is a recipe for price rises leading to a contraction in real demand ahead. Very different than back post-covid where big gov transfers could keep nominal spending up as prices rose.”

Meanwhile, Iran and Israel holding the ceasefire remained a tailwind.

Technical Setup: 24,500 Resistance or Drop Below 24,000 as Trade Tensions Linger

On June 26, the Hang Seng Index continued to trade above the May-June congestion zone, hovering below the June 25 high of 24,533. Significantly, the index remained above the 50-day Exponential Moving Average (EMA), indicating a bullish bias.

An unbroken Iran-Israel ceasefire and a resumption of US-Iran nuclear agreement talks could drive the index above the June 25 high. A sustained move through 24,533 could open the door to retesting the March high of 24,874. Conversely, a drop below 24,000 may bring 23,500 and the 50-day EMA into play.

Hang Seng Technical Outlook

• Resistance: 24,533, and then 24,874.
• Support: 24,000, 23,500, then the 50-day EMA at 23,381.
• Short-term Bias: Bullish but hinged on the Iran-Israel truce, trade headlines, and stimulus-related updates.

Outlook: Will the Middle East Tensions Escalate or Will the Index Target 25,000?

The Hang Seng Index traded above its recent congestion range on June 26. While the ceasefire remains intact, an escalation in Middle East tensions could trigger another flight to safety. A global market sell-off may push the index below 24,000. On the other hand, renewed US-Iran talks may boost sentiment. In the meantime, resistance at 24,500 may continue capping the upside without positive US-China trade developments.

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.