The Hang Seng Index pulled back on Monday, even as China reported stronger-than-expected trade numbers and copper price neared an all-time high. The blue-chip index fell to H$25,833, down from the year-to-date high of H$27,300.

China trade surges as copper nears all-time high 

The Hang Seng and other top Chinese indices remained under pressure despite macro data showing that the economy continued doing well.

Data released on Monday morning showed that China’s trade surplus surged to $1 trillion for the first time this year as exports rose by 5.9% from the same period last year, while imports rose by just 1.9%. This increase happened as tensions between China and the United States cooled a bit after the first meeting between Donald Trump and Xi Jinping.

The rising Chinese trade numbers came a week after another set of survey data pointed to more economic slowdown in the country. The country’s manufacturing and services PMIs remained below 50, a sign that the economy was slowing.

Meanwhile, copper price continued its strong surge and neared a record high. It jumped to a record high of $11,705 a ton as analysts at Citigroup hinted that it had more upside to go this year.

Copper is an important metal often seen as a barometer for the world economy because of its role in key industries like manufacturing and construction. As such, the soaring price could be a sign that the Chinese economy is doing well since it is the biggest buyer.

Looking ahead, the next important catalyst for the Hang Seng Index is the upcoming Federal Reserve interest rate decision on Wednesday, which will set the tone for what to expect in 2026.

The Fed decision is key for the Hang Seng Index because of the peg that has always existed on the Hong Kong dollar. This peg means that the Hong Kong Monetary Authority (HKMA) always does what the Fed does.

Top Hang Seng Index movers 

Most companies in the Hang Seng Index were in the green today, with Pop-Mart being the top laggard as it dropped by over 7%. It has dropped by over 40% from the year-to-date high as the Labubu craze cooled. 

China Hongqiao, WH Group, ZTO Express, China Shenhua Energy, China Merchants Bank, and ICBC were the top laggards on Monday as they dropped by over 2.63%. 

On the other hand, Baidu stock price jumped by 3.70% after reports that the company was considering listing Kunlunxin, its chip business in Hong Kong, a move that will value the company at over $3 billion. It also jumped after Cathie Wood bought a stake in the company, a sign that she believes the company is highly undervalued.

The other top gainers in the Hang Seng Index are companies like SMIC, Ping An Insurance, Geely Automobile, Xinyi Glass, and China Resources Beer.

Hang Seng Index technical analysis 

HSI Index chart | Source: TradingView

The daily timeframe chart shows that the Hang Seng Index has remained in a tight range in the past few months. It has been inside the narrow channel between the support and resistance levels at H$25,190 and H$27,190 since October.

As a result, the stock is consolidating at the 50-day and 100-day Exponential Moving Averages (EMA), while the Average Directional Index (ADX) has plunged to 9.30, its lowest level this year, a sign that its volatility has faded.

Therefore, the index will likely remain in this range in the coming days as investors wait for the upcoming Fed interest rate decision.

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