*The Hang Seng Index surged past the 26,000 mark to a four-year high, gaining over 3% this week on rotation into Asian equities.
*Property developers and tech giants led advances, supported by easing real estate concerns and optimism over upcoming earnings.
*Improved U.S.-China trade tone and stronger Chinese FX reserves boosted sentiment; focus now shifts to U.S. CPI as the next catalyst.
Hong Kong’s Hang Seng Index advanced decisively in early trading, climbing 1% to breach the psychologically significant 26,000 level and reaching its highest point in four years. The benchmark has gained more than 3% this week, outperforming many global peers as capital rotates toward Asian equities amid heightened caution ahead of key U.S. inflation data.
The rally was broadly supported, with property developers leading gains amid easing sector concerns and expectations of forthcoming global monetary easing. Signs of stabilizing demand in China’s real estate market further bolstered sentiment. Meanwhile, the Hang Seng Tech Index extended its advance for a fourth consecutive session, reaching its highest level since March, driven by strength in heavyweights including Tencent, Xiaomi, and Alibaba amid optimism around upcoming earnings.
Broader macroeconomic tailwinds also contributed to the bullish tone. Recent trade agreements between the U.S. and China have reduced immediate geopolitical friction, while China’s foreign exchange reserves rose to their highest since 2015, underscoring economic resilience and capacity for further supportive policy measures.
Market participants are now closely monitoring tomorrow’s U.S. Consumer Price Index release for implications on Federal Reserve policy. A softer print could reinforce expectations for rate cuts, potentially extending the Hang Seng’s rally, while stronger inflation may trigger profit-taking after recent gains.
Hong Kong’s Hang Seng Index has decisively broken above the significant resistance level of 25,800, a barrier that had capped upward moves on four previous occasions. The breakout was accompanied by a higher-high pattern, confirming a robust shift in market structure and reinforcing a bullish near-term outlook.
The move is supported by strengthening momentum conditions. The Relative Strength Index has advanced into overbought territory, reflecting strong buying pressure, while the Moving Average Convergence Divergence has crossed above its zero line, indicating that bullish momentum is accelerating. This alignment between price action and momentum indicators suggests the potential for further gains in the sessions ahead.
The index now faces near-term resistance near the 26,500 level, a zone that may prompt consolidation. However, a sustained hold above the former resistance-turned-support near 25,800 would likely attract additional institutional and speculative interest, supporting a continuation toward the next psychological threshold near 27,000.
Resistance level:26,660.00, 27,113.00
Support level: 25,775.00, 25,290.00
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