The Hang Seng Index Futures (HSIF) recently grabbed attention by surpassing the key psychological level of 21,000 points. This breakthrough has fueled optimism among bullish investors eager to grasp its potential impact on future trading. With market dynamics evolving, analysts are keeping a close watch on the factors that could shape the index’s movement in the weeks ahead.
 

HSIF Recent Market Performance

The Hang Seng Index has seen a significant rally in recent days. On September 29, it jumped 893 points, closing at 20,920, after hitting an intraday high of 20,997. This surge highlights strong bullish sentiment fueled by renewed buying pressure and favorable economic data from China. The index’s performance is especially noteworthy given its earlier struggles to sustain momentum this year.
 

Factors that drive Hang Seng Index high

1.       Chinese Economic Stimulus: The People’s Bank of China (PBoC) has introduced various easing measures to support economic growth, including lowering interest rates and reserve requirements. These actions aim to boost market liquidity and encourage consumer spending.

2.       Investor Sentiment: Recent policy announcements from Chinese authorities have rejuvenated investor confidence. The expectation of further stimulus measures has spurred increased buying activity across both equities and futures markets.

3.       Technical Indicators: Analysts highlight that the Hang Seng Index has broken above its weekly Ichimoku Cloud for the first time since November 2020, signaling a potential continuation of bullish momentum if the index holds above key support levels.

PBOC unveils 500 billion yuan SFISF

On Thursday, China’s central bank, the People’s Bank of China (PBOC), announced the creation of the Securities, Funds, and Insurance Companies Swap Facility (SFISF), with an initial fund allocation of 500 billion yuan, or approximately 71 billion U.S. dollars. This initiative is strategically aimed at promoting the "healthy and stable development of the capital market."

As of 10:23 a.m. today, the benchmark index was trading at 21,187.85, reflecting a significant rise of 550.61 points, or 2.67%.

In the morning session, the Hang Seng Index opened strong at 21,046 points and further climbed, extending its gains by 725 points to reach a high of 21,362. Recent figures show an increase of 576 points, or 2.79%, bringing the index to 21,213. Meanwhile, the state-owned enterprise index rose by 207 points, or 2.81%, to 7,572, and the technology sector index gained 118 points, or 2.55%, closing at 4,759. The main board reported a trading volume of 46.7 billion Hong Kong dollars.
 

Hong Kong’s stock exchange continued to struggle

Despite positive momentum in other markets, Hong Kong’s stock exchange struggled on Wednesday. The Hang Seng Index (HSI) opened strong but ultimately closed down by nearly 300 points, finishing at 20,637—289 points lower. The national index also fell by 118 points to 7,365, while the tech index dropped 55 points, closing at 4,640. Total trading volume reached a hefty HK$427 billion.

Hong Kong Exchanges and Clearing Limited (HKEX) faced heavy selling pressure, with its shares plunging 6.4% to close at HK$319, signaling broader concerns about market stability and future performance.

Pharmaceutical stocks were hit hard, with WuXi Biologics and Alibaba Health dropping 6% and 6.2%, respectively. The oil sector also took a hit, with CNOOC, PetroChina, and Sinopec falling by 5.7%, 3.1%, and 3.6%, respectively.

In the technology sector, Alibaba and Tencent saw declines of 1.5% and 1%, respectively, while Meituan defied the trend, rising 2.3%. Xiaomi and JD.com also experienced losses of 1.7% and 0.9%, highlighting mixed performance across the tech industry.