Hong Kong Markets Eye 26,000-Point Threshold Amid Global Rally

The Hang Seng Index is positioned to test its next technical ceiling following an impressive three-day winning streak that accumulated approximately 710 points, representing a 2.8 percent advance from recent lows. Currently trading above the 25,980-level, the benchmark sits within striking distance of the 26,000 psychological barrier as regional sentiment turns constructive.

Thursday’s session could see continued upside momentum, supported by a broadly positive global backdrop. U.S. equities delivered strong performance overnight, with the Dow advancing 314.67 points (0.67%) to 47,427.12, the NASDAQ climbing 189.10 points (0.82%) to 23,214.69, and the S&P 500 gaining 46.73 points (0.69%) to 6,812.61. The rally reflected a dismissal of recent valuation headwinds that had pressured major indices to their lowest readings in over two months.

What’s Driving The Upside?

Market participants have shifted their focus toward interest rate expectations. According to CME Group’s FedWatch Tool, the probability of a quarter-point rate reduction from the Federal Reserve in the coming month has surged dramatically to 82.9 percent, up from just 30.1 percent seven days prior. This shift in rate-cut odds has reignited risk appetite across asset classes.

Supporting this optimistic outlook, fresh economic data showed U.S. manufacturing orders for durable goods exceeded forecasts during September, signaling residual strength in industrial demand. Additionally, initial jobless claims retreated unexpectedly last week, suggesting labor market resilience persists despite prior concerns.

Energy Markets React To Geopolitical Developments

Commodity markets moved higher as traders grew skeptical about potential success of emerging diplomatic proposals regarding the Russia-Ukraine conflict. West Texas Intermediate crude for January delivery advanced $0.61, or 1.05 percent, settling at $58.56 per barrel, reflecting the market’s reassessment of supply risks.

With the Hang Seng Index recording a modest 0.13 percent daily gain to close at 25,982.08, the question now becomes whether this momentum can sustain through the critical 26,000-point junction.