Hang Seng Index News: Bulls Eye 24,000 as Trade Talk Hopes Offset PMI Slump

From Trade War Rhetoric to Trade Talk Hopes, Bulls Eye 24,000 Return

US-China relations deteriorated recently, reviving fears of fresh tariffs and a prolonged trade war. However, reports that Trump planned to speak with China’s Xi Jinping raised hopes for renewed trade talks, boosting demand for Hong Kong and Mainland China-listed stocks on June 3. Investors brushed aside weaker-than-expected manufacturing sector PMI data from China as trade developments remained the focal point.

The Hang Seng Index reversed its Monday losses in early trading. Tech and EV stocks climbed higher, driving the index into positive territory.

Investor focus now turns to trade updates, upcoming Chinese PMI data (due June 5), and any stimulus pledges from Beijing. These factors could determine whether the index drops below 23,000 or returns to 24,000.

Hong Kong Stocks Rebound on Trade Talk Hopes

While US equity markets posted modest gains on June 2— with the Nasdaq Composite Index up 0.67%— easing US-China trade war tensions boosted risk sentiment, limiting the impact of weak economic data from China on markets. The Hang Seng Index rallied 1.13% to 23,420 in morning trading on June 3. Mainland China’s markets also advanced, with the CSI 300 and Shanghai Composite Index up 0.50% and 0.48%, respectively.

Tech Stocks Rise; EV Sector Rallies

The Hang Seng Tech Index gained 0.59% over hopes of trade talks resuming. Tech giants Alibaba (9988) and Baidu (9888) climbed 0.27% and 0.61%, respectively.

EV stocks rallied, with BYD (1211) up 1.71% while Li Auto (2015) soared 6.45%. Strong May delivery figures boosted demand for EV shares. Li Auto reportedly delivered 40,856 vehicles in May, up 16.7% year-on-year (YoY), while BYD sold 382,476 NEVs, up 15.2% YoY.

China PMI Fuels Trade Talk Speculation

China’s Caixin Manufacturing PMI declined from 50.4 in April to 48.3 in May, its lowest level since September 2022. Notably, the manufacturing sector contracted for the first time since October 2024. However, the unexpected drop below the neutral 50 level failed to rattle investors as US-China trade developments took center stage.

Key Levels to Watch: 23,000 Support or 24,000 Breakout

Tuesday’s rebound returned the Hang Seng Index to its recent trading range. A sustained break below 23,000 could bring the 50-day Exponential Moving Average (EMA) into play and expose the key 22,000 psychological support level.

Conversely, easing trade tensions and an upbeat Caixin Services PMI from China could raise risk sentiment, potentially driving the index above 24,000. A move through 24,000 may enable the bulls to target the March high of 24,874. Any fresh stimulus from Beijing could add momentum.

Hang Seng Technical Outlook

• Resistance: 24,000, then 24,874.
• Support: 23,000, 50-day EMA at 22,813, then 22,000.
• Bias: Neutral-to-Bullish in the short-term, hinged on economic data, trade updates, and stimulus policy.

Forecast Summary

The Hang Seng continues trading in a tight range despite elevated volatility. Tariff concerns and Beijing’s lack of stimulus announcements remain key headwinds. However, upbeat PMI data on June 5 or stimulus rollouts could boost market sentiment. Until then, caution may limit demand for risk assets.

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.