Author: @aljif7
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Date: Sunday 27 July 2025
Category: Finance
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- Asian Markets Weekly Recap: Hang Seng at Key Inflection Point Ahead of Policy Watch
- China Stocks Dip Friday Amid Profit-Taking Ahead of Key Politburo Meeting, But Weekly Gains Extend to Fifth Straight Week
Asian Markets Weekly Recap: Hang Seng at Key Inflection Point Ahead of Policy Watch
As the week concludes, attention turns to Hong Kong’s equity market, where the Hang Seng Index (HSI) has reached a pivotal technical and psychological threshold—surpassing the 25,000-point mark.
Closing at 25,388 on Friday, July 25, 2025, the HSI held firm above this critical level, signaling sustained investor confidence and building momentum that could pave the way toward revisiting multi-year highs not seen since 2020—potentially setting the stage for a significant move by the end of 2025.
👉 View Chart: Hang Seng Index Performance
This resilience comes despite a slight pullback on the final trading day, following recent gains fueled by improving risk sentiment, signs of stabilization in China’s economy, and optimism around potential policy support from Beijing—especially ahead of the upcoming Politburo meeting, which will shape the country’s economic direction for the rest of the year.
Breaking and sustaining levels above 25,000 could open the door to key resistance zones near 26,000–27,000, levels last seen five years ago. Technical indicators suggest growing bullish momentum, but market participants remain cautious, awaiting clearer signals on fiscal stimulus, property sector reforms, and progress in U.S.-China relations.
For now, the Hang Seng’s ability to hold above this benchmark will be closely watched as a barometer of broader regional risk appetite and China’s evolving growth trajectory.
China Stocks Dip Friday Amid Profit-Taking Ahead of Key Politburo Meeting, But Weekly Gains Extend to Fifth Straight Week
Chinese equities pulled back on Friday, pausing a recent rally as investors took profits ahead of a crucial Politburo meeting expected to chart the course for China’s economic policy in the second half of the year. Despite the day’s losses, markets closed the week higher—marking their fifth consecutive weekly gain, the longest winning streak since the start of the market rebound in February 2024.
Sector Divergence: Consumer Slumps, Tech and AI Shine
Onshore markets saw sharp declines in consumer sectors, with liquor distillers (399997) tumbling 2% and consumer staples (000912) sliding 1.7%, leading the day’s losses. However, gains in technology helped cushion the blow: the AI sector (930713) surged 2.2%, while semiconductors climbed 1.9%, underscoring continued investor appetite for high-growth, policy-favored themes.
Despite Friday’s pullback, the Shanghai Composite rose 1.7% for the week, extending its rally amid improving sentiment driven by Beijing’s recent moves to curb overcapacity and excessive competition, as well as tentative signs of thawing U.S.-China trade tensions.
Hong Kong Retreats After Recent Highs
In Hong Kong, the Hang Seng Index (.HSI) slipped 1.1% to 25,388.35, giving back some ground after hitting its highest level since November 2021 the previous day. The Hang Seng Tech Index (HSTECH) led the decline, falling 1.2%, as tech sentiment wavered despite strong domestic AI momentum.
All Eyes on the Politburo Meeting
Market focus now shifts to the upcoming Politburo meeting later this month, which is widely anticipated to outline economic priorities and potential policy support for the remainder of 2024. While investors hope for stimulus measures, some analysts urge caution.
Keiko Kondo, Head of Multi-Assets for Asia at Schroders, noted that Chinese policymakers are likely to hold off on deploying major stimulus unless there's greater clarity on economic conditions and external risks—particularly amid the ongoing U.S.-China trade tensions. She remains neutral on China equities, citing uncertainty around a sustained structural bull market.
Cautious Optimism Among Institutions
According to CLSA analysts, institutional investors have shown a notable improvement in risk appetite this month, driven by policy support and stabilizing macro indicators. However, many remain selective, favoring sector-specific opportunities—especially in tech, green energy, and innovation-driven areas—over broad market bets.
Here the Bottom-Line
While Friday’s dip reflects short-term profit-taking and pre-meeting caution, the broader trend remains constructive. With five straight weekly gains and policy tailwinds building, China’s equity markets are poised for potential further upside—if the Politburo delivers a clear, growth-supportive message in the coming weeks.
Stay tuned and keep an eye on Beijing. 🇨🇳📈
That’s all for now my friends!
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