Hang Seng Index nears death cross as China tech stocks stumble

The Hang Seng Index dropped and moved below a crucial support level on Thursday as Chinese technology stocks plunged. It retreated to a low of H$23,988, its lowest level since July 2025. It has moved into a technical correction after falling by over 14% from its highest point this year.

Hang Seng Index slumps as tech sell-off continues

The Hang Seng Index has been in a strong sell-off in the past few days, a trend that has escalated amid the ongoing technology sell-off in the United States. 

Technology companies led the sell-off on Thursday. BYD Electronics, the biggest automaker in China, slumped to H$24.38, down by 30% this year and 60% below its highest point last year. 

Alibaba stock dropped to $108, its lowest level since July 14 last year. It has underperformed other similar companies like Amazon and eBay after plunging by 415 from last year’s high.

Baidu stock retreated to H$112.4, while companies like JD and Li Auto fell by over 5%. Other non-tech fallers were companies like BeOne Medicines, ENN Energy Holdings, CNOOC, and Sunny Optical.

The ongoing Hong Kong technology sell-off has coincided with what is happening in the United States, where the Nasdaq 100 dropped by over 500 points. Some of the top laggards in the index were companies like Qualcomm, Arm Holdings, Marvell Technology, AppLovin, Western Digital, Broadcom, AMD, and Micron. 

These are notable names as they are among the top gainers in the market this year. As a result, there are signs that the sell-off is happening as investors start to book profits. 

Rising geopolitical tensions

The ongoing Hang Seng Index sell-off is happening amid the rising geopolitical tensions between the United States and Iran. The US and Iran exchanged fire overnight, a trend that will continue in the foreseeable future. 

These attacks happened as President Donald Trump continued to put more pressure on Iran to reach a deal. This is notable as Trump said that the two sides were nearing an agreement.

As a result, crude oil prices have held steady in the past few days. Brent, the global benchmark, rose to $94.7, while the West Texas Intermediate (WTI) rose to $92. 

The Hang Seng Index is also slipping as market participants react to the potential for interest rate hikes by the Federal Reserve as US inflation jumps. A report released on Wednesday showed that the US consumer inflation jumped to 4.2%.

Hang Seng Index technical analysis

Hang Seng Index chart | Source: TradingView

The daily chart reveals that the Hang Seng Index has slumped in the past few months, moving from a high of H$28,040 in January to a low of H$24,000. It has dropped slightly below the crucial support level at H$24,200, its lowest point on March 23rd. 

Most notably, the index is about to form a death cross pattern as the spread between the 50-day and 200-day Exponential Moving Averages (EMA) narrow. This pattern is one of the riskiest ones in technical analysis. 

Therefore, the most likely Hang Seng Index forecast is bearish, with the next key level to watch being at H$23,180, its lowest point on June 20th.