Hang Seng bullish consolidation on China housing recovery
Source: Financial Mirror
The Hong Kong 33 CFD Index (a proxy of the Hang Seng Index futures) has staged the expected bullish breakout above its prior 4-week “Ascending Wedge” range resistance of 25,890 and hit the next intermediate resistance at 26,120.
Thereafter, it extended its gains and scaled up to a 4-year high of 26,583 on 12 September 12, a rally of 4.7% on the backdrop of a stronger Chinese yuan and robust bullish sentiment on Alibaba, Baidu, NetEase and Semiconductor Manufacturing International Corp.
China’s Big Tech giants are riding on the tailwinds of China’s artificial intelligence (AI) self-reliance policy, with less usage of external semiconductor chips such as Nvidia’s H20.
Home prices decline at a slower pace
China’s industrial production, retail sales, house price index for Aug 2025 (Source: MacroMicro)
Monday’s release of China’s industrial production and retail sales for August, which came in below expectations, does not cause a negative material impact on the intraday movements of the China and Hong Kong stock markets, where China’s CSI 300 and Hong Kong’s Hang Seng Index closed higher by 0.2% each, respectively.
The “bullish relief” stemmed from signs of recovery in China’s housing market, a key factor in preventing an entrenched deflationary spiral. New home prices for August marked their tenth straight month of improvement since the 10-year low of -5.9% y/y recorded in October 2024.
China’s new home prices across 70 cities fell 2.5% y/y in August, moderating from July’s 2.8% decline. This marks the slowest pace of contraction since March 2024 and helps ease concerns over a potential deflationary spiral in the Chinese economy.
Hence, a slower pace of decline in China’s new home prices, coupled with a firmer offshore Chinese yuan against the US dollar since April, managed to trigger a positive feedback loop back into the Hong Kong 33 CFD Index.
(Source: MarketPulse)
The original article: belongs to Financial Mirror .
