Advertisement
The Hang Seng Index has been on a strong rally and is now trading near its highest level since late 2021. On Friday it touched 25,330, a big jump from the 2022 low of just 14,627.
This climb has fueled fresh debates. Some analysts are warning that Chinese stocks are in a bubble, while investors are also waiting for big earnings updates from major firms like Alibaba and BYD.
Chinese shares overall have been soaring. The China A50 Index has climbed to 14,800, its best since last year. The Shanghai Composite is now at a decade high and the CSI 300 is up about 20% from its low in 2025.
All this is happening while the Chinese economy continues to struggle. The trade war with the US is still going on, with Washington keeping a 30% tariff on most Chinese goods. At home, China is stuck in a deflation problem. Consumer prices were flat in July and the GDP deflator stayed negative, showing weak demand.
Earnings growth is also slowing down. Forecasts have dropped by 2.5% from their peak this year. Some experts say this makes the rally risky. One analyst told Bloomberg that markets might be betting on an improvement in fundamentals, but without stronger demand and inflation, the rally won’t last.
Even so, the Hang Seng keeps pushing higher. Investors expect Beijing to announce new stimulus measures. With the real estate sector in trouble, many wealthy Chinese are shifting money into stocks since other options look weak. On top of that, global stock markets are also booming, with the Nasdaq, S&P 500, DAX, and FTSE 100 all hitting record levels.
The next big test for the Hang Seng will be earnings reports from heavyweights such as PetroChina, Meituan, Ping An, Trip.com, BYD, Alibaba, CNOOC, ICBC, Bank of China, China Merchants Bank, and Bank of Communications. These updates will give a clearer picture of how China’s biggest firms are holding up. Alibaba’s results in particular will be closely watched for insights into its AI push.
Technically, the Hang Seng still looks strong. The index has risen from 14,627 in 2022 to about 25,340 now. A golden cross pattern has formed on the weekly chart, which usually signals more upside. Momentum indicators like RSI and the Stochastic Oscillator are also rising. This suggests bulls may try to push the index towards the next big level at 27,000.