Insights 
VT 
Key Points
- Hang Seng closes down 0.1%, with intraday high at 24,321 and support seen near 24,027.
- CSI300 drops 0.5%, breaking its 5-day winning streak.
- Rare earth stocks rally, but semiconductors and defense weigh on overall sentiment.
- Yuan weakens to 7.1883 per USD amid economic uncertainty.
The Hong Kong stock market lost momentum late Tuesday, with the HK50 index retreating from a session high of 24,321 to close at 24,168, down 0.26%. The MACD histogram turned negative and moving averages flattened, signalling waning short-term momentum. The index initially rallied as markets priced in hopes for progress in the ongoing U.S.-China trade talks in London, but gains were erased as investor sentiment cooled.
Despite headlines that the discussions had extended into a second day, markets reacted cautiously amid signs that core strategic issues—such as rare earth controls and semiconductor access—remain unresolved. In Hong Kong, tech names slipped 0.8%, dragging the broader Hang Seng Index lower.
Rare earth stocks were a notable outlier, with China Rare Earth Holdings jumping 13%, extending a steep rally. Meanwhile, weaker-than-expected Chinese export and inflation data have fuelled hopes of upcoming stimulus measures, adding complexity to the market tone.
Technical Analysis
The HK50 (Hang Seng Index) shows a recent rally from the 23,768 support level, peaking at 24,321 before facing resistance. The sharp upward move on the 7th of June formed a bullish impulse, but since then the price has struggled to break above the high. The Moving Averages (MA 5,10,30) reflect a tightening range, with the 5 and 10-period MAs flattening—indicating consolidation after the spike.
Picture: HK50 stalls below resistance; bulls eye 24,321 breakout, as seen on the VT Markets app
The MACD histogram flipped briefly positive during the rally but is now showing declining momentum, with the MACD line curving down toward the signal line, suggesting the bullish pressure may be fading. Price is hovering just under the 24,200 level, which now acts as short-term resistance, while 24,000 forms nearby psychological support.
If bulls fail to hold above 24,000, a pullback to retest 23,768 is possible. Otherwise, a breakout above 24,321 could open up room for further upside.
With both sides negotiating under rising economic pressure—China’s exports to the U.S. fell 34.5% in May—traders appear reluctant to commit ahead of a concrete outcome. For now, risk appetite remains capped, with the HK50 likely to stay range-bound between 24,000 and 24,400 until clarity emerges.
