Key Points
- HK50 opens at 19,821 and closes at 19,841, clawing back slightly after dipping to an intraday low of 19,047.
- U.S. 104% tariff on Chinese imports triggers a 3.1% drop in the Hang Seng Index; Shanghai Composite down 1.1%, CSI300 falls 1.2% at the open.
Asian markets were under renewed pressure on Wednesday, as traders responded sharply to the formal activation of 104% U.S. tariffs on Chinese goods, which came into effect at 04:01 GMT. The move, part of a sweeping protectionist plan by the Trump administration, sent ripples through regional indices despite ongoing efforts by Beijing to stabilise its financial system.
In a bid to counteract the market panic, Chinese state-owned enterprises ramped up share purchases, while a wave of listed companies announced share buybacks to shore up sentiment. Despite these interventions, the broader Hang Seng Index fell 3.1%, matching the region-wide gloom. On the mainland, the Shanghai Composite Index slipped 1.1%, and the CSI300 fell 1.2%, reflecting widespread caution across all Chinese equities.
Technical Analysis
The HK50 (Hang Seng Index futures) opened at 19,821, sliding sharply to 19,047 before staging a partial recovery to close marginally higher at 19,841. The recovery, however, lacked conviction. Price action on the 15-minute chart remained well below key moving averages (5, 10, 30), and the MACD (12,26,9), while edging into bullish territory, failed to produce strong upward momentum. Traders are watching closely to see if a break above 19,900–20,000 can be sustained, or if the bounce will prove short-lived.
Picture: Bearish pressure cools with a MACD crossover showing early signs of shift, as seen on the VT Markets app
Traders are increasingly wary that Beijing’s response to Washington’s tariffs—while supportive on the surface—may fall short of reversing market psychology without a major breakthrough in negotiations. With Trump’s administration simultaneously seeking talks with non-Chinese trade partners, the focus is shifting to how aligned Washington’s allies will be—and how isolated China could become.
Cautious Outlook
While short-term technical indicators hint at a brief reprieve, the fundamental landscape remains clouded. The HK50 is still trending below its late March levels, and sentiment continues to be weighed down by geopolitical risk, export uncertainty, and weaker global growth forecasts.
Unless a diplomatic thaw emerges between the U.S. and China, traders should brace for more volatile sessions and potential retests of support near the 19,000 mark. For now, state support may provide a floor, but it does little to inspire upside conviction.
