China’s indicative index, Hang Seng Index closed Wednesday’s trading session marginally up by 0.68% to 20,264 points after a bullish statement from the country’s government. US President Donald Trump said on Tuesday that he was waiting for a call from China to initiate a potential trade deal between the world’s two largest economies, but nothing has come out of it yet.
China Says it Has the Muscle to Go All the Way
However, hours later, US tariffs against China spiked to 104% after Trump made good his threat to impose an additional 50% tariff in reaction to China’s retaliation to an earlier 34% tariff. In addition, America will charge 90% on small parcels from China valued up to $800- a triple jump from an earlier rate of 30%. Also, the US had a 20% tariff on Chinese goods in place before Trump came into office.
China had earlier stated that it would not budge and stated that it was preparing its own retaliatory response, sending the Hang Seng Index and the mainland’s SSE Composite Index down by 13.22% and 7.34% respectively on Monday. However, the country’s Prime Minister, Li Qiang boosted investors’ confidence down later on Wednesday, stating that the country had the muscle to hedge against external pressure, including the hiked 104% US tariffs.
In addition, some listed companies announced stock buyback programs, adding propulsion to the bullish sentiment. The news saw the afternoon session turn green, with the SSE Index closing the day at +1.31% and the Hang Seng Index gaining +0.68% on the day.
Hang Seng Index Prediction
The momentum on Hang Seng Index Calls for further upside if the action stays above 20,106 points. Initial resistance will likely be at 20,432 points, but an extended control by the bulls will go above that hurdle and test 20,778.
Conversely, going below 20,106 points will signal control by the sellers. That will likely see the Index find its first support at 19,843 points. Breaking below that level will invalidate the upside narrative. In addition, it could result in a stronger downward momentum to test 19,643.
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