The Hang Seng Index continued its uptrend on Tuesday as it jumped to H$26,822, its highest point since November 13. It has jumped by 6.90% from its lowest point in December and is hovering near last year’s high of $27,392.
Why the Hang Seng Index is soaring
The Hang Seng Index continued its strong rally this year, mirroring the performance of other global indices like China’s CSI 300, Japan’s Nikkei 225, and the US’s Dow Jones.
Its rally was mostly because of the strength of the Chinese economy, which authorities hinted that it hit the target of 5% in 2025 despite the trade issues brought about by the Trump administration.
One sign of the global economic growth is the ongoing performance of copper, a metal seen as a barometer for the global economy. Copper jumped to $13,000 a ton for the first year.
The index has also jumped as investors anticipate more stimulus from Beijing this year. Analysts expect that the People’s Bank of China (PBOC) will cut interest rates, while Beijing will implement some key stimulus measures during the year.
Most importantly, there is optimism that the artificial intelligence (AI) boom will accelerate this year. AI companies have led the recent rally in China and the United States.
Kuaishou Technology has been the best-performing stock in the Hang Seng Index this year so far as it jumped by 17%. It has jumped by over 85% in the last 12 months.
China Life Insurance stock has jumped by 13%, while Longfor Group, Baidu, JD Health, Ping An Insurance, and China Resources Land. Baidu stock jumped after the company announced plans to spin off and launch an IPO for its AI semiconductor business.
Just a handful of companies have retreated this year. PetroChina stock has slipped by 2% this year, while China Merchants Bank, Link Real Estate, Hengan International, and Geely Automobile have all dropped by over 1%.
Hang Seng Index technical analysis
The daily timeframe chart shows that the Hang Seng Index has rebounded in the past few days, moving from a low of $23,148 to the current $H26,815. It formed a triple-bottom, which is made up of three swings and a neckline at $H27,181.
The index has remained above the 50-day and 100-day Exponential Moving Averages (EMA) and the Major S&R pivot point of the Murrey Math Lines. It has jumped above the Supertrend indicator, while the Relative Strength Index and the Stochastic Oscillator have continued rising this year.
On the flip side, a move below the crucial support level at H$26,000 will invalidate the bullish outlook and point to more downside over time.
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