The Hang Seng Index jumped by over 1.8% on Tuesday as sentiment in global stocks jumped ahead of a meeting between Scott Bessent and his Chinese counterpart. It jumped to a high of H$26,336, its highest level since October 10.
China trade talks and Fourth Plenum
The blue-chip Hang Seng Index soared, mirroring the performance of its American counterparts like the Dow Jones and the S&P 500, which jumped to a record high on Monday. Other top Chinese indices are also rising, with Shanghai Composite and China A50 rose by over 1.50%.
This rally is happening because of the upcoming talks between the US and China, which aim to address key issues and possibly, prevent a prolonged trade war.
Scott Bessent, the Treasury Secretary, said that he would meet his Chinese counterpart in Malaysia this week. Their meeting comes week before Donald Trump and Xi Jinping meet at the APEC Summit in South Korea.
In a statement on Monday, Trump insisted that he was hopeful that a deal between the two countries would happen soon. Such a deal would de-escalate the already tense situation and help to boost the stock market.
The Hang Seng Index also jumped as investors bet that Beijing would implement some stimulus measures after the relatively weak China GDP data published on Monday. This report showed that the economy expanded by 4.8% in the third quarter, the slowed quarterly growth rate this year.
Additionally, the Hang Seng Index is rising as investors react to the ongoing Fourth Plenum in China. This is a major event where senior leaders are talking about China’s 15-year strategic plan.
While the readout of the meeting will come out in 2026, investors will be looking at cues on what officials deliberated.
Looking ahead, the Hang Seng Index will react to the upcoming earnings dump from American companies. Hundreds of companies in the S&P 500 Index, including popular names like Netflix, Blackstone, Tesla, and Procter & Gamble will publish their results this week.
The index will also react to the upcoming US consumer inflation report, which is scheduled on Friday this week. Signs that inflation is moderating will make it easy for the Federal Reserve to continue cutting interest rates. A Fed cut will push the Hong Kong Monetary Authority (HKMA) to do the same.
Most companies in the Hang Seng Index were in the green on Tuesday. China Life Insurance, SMIC, Sunny Optical, BYD, Geely, and Alibaba were the top gainers in the index.
The main laggards were companies like Pop Mart, CK Infrastructure, China Telecom, China Mobile, and China Shenhua Energy.
Hang Seng Index technical analysis
The daily timeframe chart shows that the Hang Seng Index bottomed at H$25,124 on October 16 and then rebounded to the current H$26,286.
It has moved above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control. Also, it has moved to the weak, stop & reverse point of the Murrey Math Lines tool.
The most likely scenario is where the Hang Seng Index continues rising, with the next key level to watch being the ultimate resistance point at H$ 26,560. A move above that level will point to more gains, potentially to the year-to-date high of $27,345.
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