The Hang Seng index has surged lately, making it one of the top-performing global index so far. It jumped to a high of H$22,620, its highest level since October 7, and up by over 50% from its lowest point in 2024. So, why is the HSI index surging, and what will happen next?
Why the Hang Seng index is soaring
The Hang Seng index has jumped mostly for three main reasons. First, the surge has coincided with the ongoing rebound of global equities. Most of the biggest indices like the S&P 500, Nasdaq 100, DAX, and CAC 40 have all jumped in the past few months. In some instances, global indices are highly correlated.
Second, the Hang Seng index has jumped because of the recent economic data that showed that the Chinese economy was doing fairly well. These numbers revealed that the economy expanded by 5.4% in the fourth quarter, bringing the 2024 growth rate to 5.0%.
Most of the Q4’s growth came from the recent investments by the Chinese government, which unveiled a $1.4 trillion stimulus package. The package is meant to boost local governments that have struggled following the real estate industry collapse.
Third, the Hang Seng index has jumped as global investors buy the dip since it was one of the worst-performing indices in the past few years. As such, there is a general view that the index is highly undervalued.
Top HSI index constituents in 2025
Alibaba stock price has surged this year as it jumped by over 50%. The stock has jumped because of its strong technicals. As we wrote here, the stock formed an ascending triangle pattern, pointing to a strong surge over time.
Alibaba has also thrived after the company made progress in the artificial intelligence industry. Just recently. Apple said that it will use its AI models in China, a stamp of authority from the biggest company in the world.
Alibaba Health Information is the best-performing Hang Seng index constituent this year as it jumped by over 77%. This rebound is mostly because Beijing completed its review of the group last year and its strong performance.
Other technology companies in the Hang Seng index like Meituan, Xiaomi, JD Health, Kuaishou Technology, BYD and Tencent have done well this year.
On the other hand, the worst-performing companies in the index are Sands China, Henderson Land, and New Oriental.
Hang Seng index analysis
HSI index by TradingView
The weekly chart shows that the Hang Seng index has done well in the past few months as it jumped from H$14,845 in 2023 to $23,000. It has now formed a mini golden cross as the 100-day and 50-day moving averages crossed each other.
The index is nearing the 50% Fibonacci Retracement level at H$22,910. It is also approaching the key resistance level at $23,230, its highest point in 2024.
Therefore, the index will likely continue rising as bulls target the next key psychological point at H$23,000. A break above that level will see it rising to the 61.5% retracement level at H$24,878.
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