Hang Seng Jumps 580 Points as China Regulator Vows Market Support

Hong Kong stocks rallied sharply on July 21, with the Hang Seng Index closing up 580 points, or 2.4%, at 25,143. China’s securities regulator chief Wu Qing vowed to take all efforts to maintain stable market operations after a rout that wiped out 10 trillion yuan in mainland market value over two weeks. Tech and energy shares led the recovery.

China regulator pledges market stability after two-week selloff

China’s Securities Regulatory Commission (CSRC) held an investor meeting where chairman Wu Qing vowed to prevent risks and safeguard fair market order. The pledge came after mainland markets lost 10 trillion yuan in capitalization over the past two weeks. Wu also committed to improving transparency of listed companies and investor protection. The CSRC meeting signaled Beijing’s intent to restore confidence after widespread selling pressure across Asia.

Tech and energy stocks drive Hong Kong’s recovery

Large-cap technology counters led the rally. Tencent Holdings rose 3.5%, Alibaba Group added 3.7%, and Meituan climbed 3.1%. Energy stocks tracked firmer oil prices, with CNOOC jumping 5.1% to become the best-performing blue chip, while PetroChina rose 4.1%. The Hang Seng Tech Index gained 128 points, or 2.8%, to 4,752. However, AI-linked stocks showed weakness, with Z.ai tumbling 19.5% and MiniMax falling 10.6%.

Meyka data shows overbought conditions but upside momentum

Meyka grades the Hang Seng Index a C+ HOLD with a 12-month forecast of 22,447. The RSI stands at 61, near overbought territory, while the CCI reads 118.91, signaling overbought conditions. The Stochastic %K at 87.68 and Money Flow Index at 73.16 suggest strong buying pressure. Support sits at the 23,800 level, which coincides with the 20-day moving average, offering a buffer of nearly 800 points below Monday’s close.

Broader Asia mixed as semiconductor volatility persists

South Korea’s Kospi plunged 4.46% to 6,516 amid unease over leveraged bets in chipmakers SK Hynix and Samsung Electronics. Japan’s Nikkei fell 2.9% for the week. The China Enterprises Index advanced 3% to 8,381, while the Shanghai Composite rose 0.85% to 3,796. Analysts warn that AI-linked stocks may face further weakness, with semiconductor valuations under pressure globally.

Final Thoughts

Hong Kong’s bounce reflects Beijing’s commitment to stabilize markets, but Meyka’s C+ grade and overbought technical readings suggest caution. The 23,800 support level will be critical to watch for sustained recovery.

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