Hang Seng Index News: Trump-Musk Feud and Trade Talks Stir 24,000 Breakout Bets

Trump-Musk Feud Rattles Markets as Bulls Eye 24,000

The President Trump-Elon Musk feud intensified overnight, overshadowing US-China trade developments on Friday, June 6. Despite the fallout from the overnight events, easing US-China trade tensions limited the morning losses. Trump held the highly anticipated call with China President Xi Jinping, providing a glowing update.

Hopes for a trade agreement boosted demand for Mainland China stocks. Meanwhile, the Hang Seng Index may end a three-day winning streak as EV, housing, and tech stocks retreat.

Markets remain focused on trade-related headlines, stimulus signals from Beijing, and the upcoming inflation and trade data (due June 9). These key drivers could dictate whether the index drops below 23,000 or breaks above 24,000.

Hang Seng Index Winning Streak Under Threat

US equity markets posted losses on June 5, with the Nasdaq Composite Index falling 0.83%, as the Trump-Musk feud impacted risk assets. Despite Trump’s positive updates on the call with President Xi, the feud weighed on Hong Kong-listed stocks.

The Hang Seng Index dropped 0.32% to 23,830 in early trading on June 6. Meanwhile, Mainland China’s markets advanced on optimism toward a US-China trade deal. The CSI 300 and Shanghai Composite Index rose 0.12% and 0.06%, respectively.

EV and Tech Stocks Retreat

The Hang Seng Tech Index declined 0.65%, with Baidu (09888) and Alibaba (09988) falling 0.24% and 1.01%, respectively. EV stocks faced heavier losses after Tesla (TSLA) tumbled 14.26% overnight. BYD (1211) and Li Auto (2015) slid 1.17% and 1.63%, respectively, while Geely Automobile also posted early losses.

Trump Calls Xi Jinping

President Trump delivered on his promise, speaking with China’s President Xi Jinping on June 5. The US President provided details of the call stating:

“I just concluded a very good phone call with President Xi, of China, discussing some of the intricacies of our recently made and agreed to, Trade Deal. The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both Countries. There should no longer be any questions respecting the complexity of Rare Earth products.”

Trump added that US Treasury Secretary Scott Bessent, Secretary of Commerce Howard Lutnick, and Trade Representative Ambassador Jamieson Greer will meet with representatives from China shortly.

Despite the upbeat assessment of the call, investors remained skeptical of a trade agreement.

Brian Tycangco, editor at Stansberry Research, remarked:

“Let’s see what happens next. Best case is an agreement to hold the line at 10% with no further escalation + removal of chip restrictions + Chinese student visas + fentanyl + rare earths.”

The question will be whether Trump will be willing to remove chip restrictions. If not, China is unlikely to loosen restrictions on rare earth mineral exports, highlighting the high level of failure risk going into talks.

Key Levels: 23,000 Support or 24,000 Retest

Despite Friday’s losses, the Hang Seng Index remained above its recent trading band, suggesting a return to 24,000. A favorable development in trade talks or improving inflation and trade terms could boost risk sentiment, potentially sending the Hang Seng Index toward 24,000. A sustained move above 24,000 could bring the March high of 24,874 into play. Any fresh stimulus from Beijing may accelerate a move back above 24,000.

Conversely, failure to reach a trade agreement could impact risk assets. A break below 23,500 may expose 23,000 and the 50-day Exponential Moving Average (EMA).

Hang Seng Technical Outlook

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

Forecast Summary: Will trade talks deliver, or will 23,000 give way first?

Despite doubts about the removal of tariffs, the Hang Seng continues trading above May and early June’s trading range. Trade war jitters and lack of fresh stimulus from Beijing remain market headwinds. However, improving inflation and trade terms, combined with easing trade friction, may lift sentiment. Until then, resistance at 24,000 will likely cap gains.

Economists forecast exports to tumble 4% year-on-year in May while expecting deflationary pressures to intensify.

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.