Hong Kong’s stock market posted a strong rebound after the China Securities Regulatory Commission (CSRC) announced five measures to boost the city’s international finance center status.

The city’s benchmark Hang Seng Index (HSI) gained 1.8 percent to close at 16,511 on Monday, with a market turnover of HK$104.9 billion ($13.44 billion). Hang Seng China Enterprise Index soared 1.5 percent while the Hang Seng TECH Index, which tracks major technology players listed in the city, jumped 1.8 percent.

The CSRC — the Chinese mainland’s securities watchdog — announced five measures last Friday to cooperate with Hong Kong’s capital market, such as broadening the scope of eligible products for exchange-traded funds under the Shanghai-Shenzhen-Hong Kong Stock Connect, as well as real-estate investment trusts under the Shanghai-Shenzhen-Hong Kong Stock Connect.

The CSRC also pledged to support the renminbi-denominated stock trading counter to be included in stock connect trading programs, optimize the funds under the mutual recognition of funds arrangement, and back eligible mainland enterprises to list and raise funds in the special administrative region

The commission also pledged to support the renminbi-denominated stock trading counter to be included in stock connect trading programs, optimize the funds under the mutual recognition of funds arrangement, and back eligible mainland enterprises to list and raise funds in the special administrative region.

Meituan and Tencent Holdings both rose over 5 percent, making them the two best-performing stocks in the Hang Seng TECH Index.

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Financial services shares also recorded good performances, with Ping An Insurance (Group) Company of China and China Life Insurance (Overseas) Company hiked 3 to 4 percent, while HSBC Holdings and Hong Kong Exchanges and Clearing increased over 2 percent.

After CSRC recommended expanding real-estate investment trusts under the Shanghai-Shenzhen-Hong Kong Stock Connect, shares of Link Real Estate Investment Trust jumped over 2 percent, while Champion REIT soared more than 9 percent.

A report by China International Capital Corporation said that the new measures will help enrich the different types of trading products and provide more convenience and choice for foreign and mainland investors, promote further integration of the capital markets of the two places and renminbi internationalization, while also strengthening Hong Kong’s status as a financial center.

Louis So, co-chairman and co-chief investment officer at Value Partners, said the HSI’s valuation is still attractive. “The HSI is currently at the forward-looking price-to-earnings ratio of 8.1 compared to the past 10-year average of 11.2, which is a far lower ratio than the US market of 22 and the Japanese market of 16.”

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Hong Kong stock market tumbled last week as geopolitical tension flared up in the Middle East following Iran's airstrikes on Israel, while higher-than-expected inflation data in the United States may further delay interest rate cuts by the US Federal Reserve.