Behind the surge in Hong Kong stocks, what is the market expecting?

After experiencing a continuous decline for three consecutive trading days, the Hong Kong stock market rebounded strongly on Wednesday, leading the way in the Asian markets.

As of the time of writing, the Hang Seng Index rose by 2.6%, the Hang Seng TECH Index rose by 2.9%, and the Mainland China Enterprises Index surged by over 3%. The technology sector saw a major outbreak, with Bilibili rising by over 18%, Lenovo Group up by 8%, Xiaomi, Meituan, and SenseTime Technology all rising by over 5%.

On the same day, the 14th Lujiazui Forum opened in Shanghai, raising market expectations for reforms in the Chinese capital market and injecting a shot of adrenaline into the Hong Kong stock market. Analysts predict that regulators will introduce more market-friendly policies during this forum, especially regarding reform measures for the Sci-Tech Innovation Board.

Billy Leung, an investment strategist at Global X ETFs, stated:

Influenced by the Shanghai Lujiazui Forum, the Hong Kong stock market is on the rise. The market expects more supportive policies to be introduced and anticipates banking reforms to enhance shareholder returns. I suspect these policies may be more important for Hong Kong-listed stocks.

On the same day, the China Securities Regulatory Commission released the "Eight Measures for the Sci-Tech Innovation Board," explicitly supporting high-quality tech companies with key core technologies, significant market potential, and prominent innovation attributes to list on the Sci-Tech Innovation Board; researching and optimizing market-making mechanisms, after-hours trading mechanisms; enriching the variety of Sci-Tech Innovation Board ETFs and ETF options products, and studying the timely introduction of Sci-Tech 50 Index futures and options.

Some analysts also believe that after the previous adjustments, the Hong Kong stock market may have bottomed out. Additionally, although the Federal Reserve has not clearly indicated an interest rate cut within the year, this expectation has not been completely eliminated, providing a foundation for the rebound of the Hong Kong stock market.

As of the Tuesday close, the Mainland China Enterprises Index has fallen by approximately 4% this month, while the MSCI Asia-Pacific Index has surged by 7% during the same period.

TF Securities believes that looking ahead, against the backdrop of significantly improved sentiments from both domestic and foreign investors, the Hong Kong stock market has triggered a relatively significant rebound. The sustainability and upward potential in the future will depend on more solid fundamental data and economic recovery verification, and they maintain a cautiously optimistic attitude during the economic repair validation period.

Zhou Nan, Founder and Chief Investment Officer of Shenzhen Longhui Fund Management Co., Ltd., commented:

Today's rise seems more like a technical rebound, but it is within the expected range after adjustments. There is a high possibility for the Hong Kong stock market to reach new highs this year.

In addition, on Tuesday, the Hong Kong Stock Exchange announced the cancellation of the practice of suspending trading on typhoon days that has been in place for decades, effective from September 23. Analysts believe that this move may help eliminate uncertainties in market access and liquidity.CICC International believes that stabilizing at 18,000 points is an important sign for the Hong Kong stock market to truly complete the bear-to-bull transition. The current rebound in the Hong Kong stock market has surpassed the oversold rebound in the bear market, and should be highly valued. Historically, after a technical bull market and short-term retracement at the bottom of a bear market cycle, there is a high probability of continued medium-term upward movement