Hang Seng Index steady ahead of Alibaba, Tencent, Meituan earnings

The Hang Seng Index rose for two consecutive days after the recent strong Chinese macro data and as investors waited for some notable Chinese earnings. It also rose as it mirrored the performance of American equities. 

It has now risen by 5% from its lowest level this month, with focus shifting to the upcoming earnings by companies like Tencent and Meituan.

Hang Seng Index rises after strong China macro data 

The Hang Seng Index has done well in the past few days, moving from a low of H$24,937 on March 6 to the current H$26,220.

This rebound continued this week after China published key macro data, which revealed that the economy was doing relatively well before the Iran war started.

The country’s retail sales rose by 2.8% in February after growing by 0.9% last month. This increase was much better than the previous 2.5%.

More data showed that the fixed asset investment rose by 1.8% in February after falling by 3.8% in the previous month. House prices dropped at a slower pace than expected in February, a sign that the sector was stabilizing.

These numbers are a sign that the Chinese economy is doing relatively well this year as officials work to achieve the set new annual growth target of between 4.5% and 5%.

Historically, the Hang Seng Index does relatively well when the Chinese economy is recovering as most companies have large operations in the mainland.

Tencent, Alibaba, and Meituan earnings

The Hang Seng Index is also rising as investors wait for the upcoming corporate earnings by some of the biggest companies in the country.

Tencent Holdings, the biggest company in China, will publish its financial results on Wednesday. These results will provide more information about the company’s growth and its investments in the artificial intelligence industry. Tencent stock has jumped by 12% from its lowest level in March this year.

Meituan, another top company in the index, will publish its financial results on Friday this week. These numbers come as the stock has sank by over 62% from its highest point in October 2024. It has dropped by over 80% from its all-time high as competition with other top companies like Alibaba and JD.com.

Alibaba, a big name in the Hang Seng Index, will also release its financials this week as it seeks to revamp its artificial intelligence (AI) business. 

The company has now set up a new token group and launched an AI platform for enterprises amid a surge in Chinese demand. In a statement on Monday, Morgan Stanley analysts reiterated their bullish view for the company, pointing to its AI demand.

Hang Seng Index technical analysis 

Hang Seng Index chart | Source: TradingView 

The daily timeframe chart shows that the Hang Seng Index has rebounded in the past few days, moving from this month's low of H$24,937 to the current $26,088.

It has found strong support at H$25,000, its lowest level in in October, November, and December last year.  This support was also the lowest swing this month and is a sign that bears are afraid of placing trades below that level.

The Hang Seng Index has remained above the 200-day and 100-day Exponential Moving Averages (EMA).

Therefore, the stock will likely hold steady as long as it remains above the key support level at H$25,060. A drop below that price will point to more downside, potentially to the 50% Fibonacci Retracement level at H$23,700.