Last week, the Hang Seng Index maintained its rally and hovered near its biggest swing since November 20,21. The Hang Seng Index has reached a new high on Friday of $25,330, after a sharp rise from its previous low of $14 627. This was the lowest swing since 2022.
Hang Seng Index is expected to react in response to recent claims that Chinese stock markets are in a bubble, and companies such as Alibaba and BYD have been reporting top-notch earnings.
An analyst warns about a Chinese Stock Market Bubble
Hang Seng Index is in a bull market, which mirrors the performance of Chinese stocks. The China A50 Index, for example, rose to $14.800, which is its highest level since 2024.
The Shanghai Composite Index also jumped to a decade-high, and the CSI 300 Index has risen by 20 percent from its low point in 2025.
As the US-China trade war continued, the Chinese economy was still under stress. As the US and China negotiate a better agreement, they have placed a tariff of 30% on many Chinese products.
The country is also failing to stop the spiral of deflation that has reduced corporate pricing power. Recent data revealed that consumer prices were flat in July. Another showed that GDP deflator was negative.
The Chinese forward earnings estimates have fallen 2.5% since their highest level this year.
Due to this performance and the fierce competition in China more investors are warning about a bubble on the stock market. Bloomberg quoted an analyst as saying:
Markets may be anticipating, correctly or incorrectly that macroeconomic fundamentals would improve. A bull market is not sustainable as long as inflation stays close to zero and the corporate pricing power suffers due to weak domestic demand.
Analysts expect more stimulus to come from Beijing. The most important thing to note is that, after the crash of the real-estate sector, wealthy Chinese have now turned their attention towards the stock market due to the lack of other options.
The rally also forms part of the current surge on the global stock exchange. The top global indices such as the Nasdaq 100 . S&P500, DAX and the FTSE 100 have reached new highs.
Earnings ahead
Earnings by major companies like Petrochina (China), Meituan (China), Ping An Insurance (China), Trip.com(China), Byd.com, Alibaba, CNOOC and ICBC will have a significant impact on the Hang Seng Index.
Together with PDD’s results, these will give a better picture of the top Chinese companies. Alibaba’s results will give more insight into its AI impact and business.
Hang Seng Index Analysis
Weekly chart showing the Hang Seng Index rebounding in recent years. It has moved from H$14.627, a 2022 low, to H$25.340, a high in 2018. The 50-week- and 200-week-moving averages have crossed, forming a gold cross.
Both the Relative Strength Index and Stochastic oscillator continue to rise. Bulls will continue to target H$27,00 as the next psychological level.
This article Hang Seng Index bubble warnings before Alibaba, ICBC and Byd earnings first appeared on The ICD
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