Hang Seng Index Surges 1.6% as U.S. Shutdown Weighs on Nasdaq 100

On November 10, 2025, Hong Kong’s Hang Seng Index leapt 407 points — a 1.6% gain — closing at 26,649, its highest level since October, as investors fled the chaos of a 40-day U.S. government shutdown. While American markets tumbled, with the Nasdaq 100 dropping 3.1% for the week, Asian equities surged on hopes that Beijing’s economic stimulus was finally gaining traction. The twist? The rally wasn’t about Washington’s drama — it was about what wasn’t happening in China: deflationary pressure easing, consumer spending reviving, and tech and tourism stocks roaring back.

Wall Street Stumbles as Shutdown Drags On

The U.S. government shutdown, now in its sixth week, isn’t just a political stalemate — it’s a market poison. The Nasdaq 100 slid to 23,004.54 on November 9, its lowest close in months, as investors braced for deeper damage. Consumer sentiment, according to the University of Michigan, cratered more than forecast, with households citing job insecurity and delayed federal payments as key concerns. Even the S&P 500 and Dow Jones Industrial Average lost ground for the week, despite a slight Friday rebound. Analysts at IG Group warned that the Nasdaq 100 could fall toward 24,635 if it breaks below 23,000 — a level that, if breached, could trigger a broader bear market. But here’s the thing: markets hate uncertainty more than bad news. And the shutdown? It’s pure uncertainty. Even a tentative offer from Senate Democrat Chuck Schumer to reopen government operations sent a ripple of relief through global markets — until Republicans rejected it. The market’s reaction was immediate: a 0.2% drop in the Nasdaq on Friday, then a 3.1% weekly plunge. Investors aren’t waiting for a resolution. They’re betting against it.

Asia’s Quiet Rebound: China’s Inflation Surprise

While Washington stalled, Beijing quietly turned a corner. On October 31, 2025, China’s National Bureau of Statistics released data that caught analysts off guard: consumer prices rose 0.2% year-over-year — the first positive reading since February. Producer prices, though still falling, shrank less sharply: -2.1% versus -2.3% in September. That’s not a boom. But it’s a stop. After months of deflation fears and corporate belt-tightening, this small rebound suggests China’s efforts to curb "involution" — the economic spiral of over-competition and shrinking margins — may be working. The rally wasn’t random. Consumer-facing stocks led the charge. Mixue Group, the Chinese bubble tea giant, jumped 9.1%. H World Group, which runs hotels like Hualuxe and Vienna, surged 5.5% as domestic travel rebounded. Laopu Gold and China Resources Beer added 5.4% and 4.7%, respectively. Even ENN Energy Holdings, a clean energy player, rose 3% — a sign investors are betting on long-term infrastructure spending. The market’s optimism was also buoyed by signals that Beijing would ease pressure on the global auto industry after the Dutch government seized control of Nexperia, a semiconductor firm with key ties to Chinese EV makers. The move had sparked fears of export bans, but Beijing’s recent softening suggests it’s avoiding a full-blown tech war — at least for now.

Technical Signs and Cautious Optimism

The Hang Seng Index had been consolidating near 25,500 for weeks, and the November 10 surge broke through with volume. Trading volume hit 3.1 billion shares — the highest in a month. The index’s 20-day moving average, which had previously acted as resistance, now flipped to support. That’s a classic bullish signal. But analysts at IG Group are still cautious. "Declaring the correction over is premature," their report noted. The index is up 1.3% for the week and 30% over the past year — but it’s still 15% below its May 2025 peak. The previous week’s failure of the Trump-Xi summit in Busan to produce any market-moving agreement had left investors wary. Now, the rebound feels less like a policy win and more like a relief rally — a pause in the panic. No one’s celebrating. But they’re buying.

What’s Next? Data, Not Diplomacy

The real test comes this week. China will release data on credit growth, industrial output, and retail sales — the holy trinity of economic health. If those numbers hold up, the Hang Seng could push toward 27,000. If they disappoint, the rally could evaporate as quickly as it began. Meanwhile, Washington’s shutdown remains unresolved. With no clear path to funding, the longer it lasts, the more it chips away at global investor confidence — even in markets far from D.C. The contrast couldn’t be starker. One economy is stumbling under political paralysis. The other is quietly healing, one small inflation number at a time. Markets don’t always make sense. But right now, they’re betting on Beijing — not Washington.