The positive market sentiment unleashed by the Chinese mainland’s massive monetary policy stimulus and by the US interest-rate cut has pushed Hong Kong’s share market to a near-14-month high.

Amid the ongoing bullish market sentiment, the Hang Seng Index opened 173 points higher and rose to a high of 19,954. The index rallied 4.2 percent to close at 19,924 points on Thursday, with a market turnover of over HK$302.8 billion ($38.9 billion), the highest level since March 2022.

The Hang Seng TECH Index skyrocketed 7.3 percent to close at 4,209 points, while the Hang Seng China Enterprise Index climbed 4.7 percent to close at 7,086 points.

ALSO READ: HK exports record solid growth in August

Shares of mainland property developers generally soared as Thursday’s Politburo meeting made it clear that steps were being taken to stop the real estate market from falling and to stabilize it. Shares in domestic consumption and technology soared, while the mainland’s high-dividend stocks and Hong Kong-based utility shares tumbled.

On Tuesday, the People’s Bank of China announced a spate of measures to support the general economy, the property market, and the capital market by cutting the reserve requirement ratio, reducing the downpayment ratio for secondhand housing, slashing the existing mortgage rate, and trimming the interest rate for seven-day reverse repurchase operations, after the US Federal Reserve slashed the interest rate for the first time in more than four years by half a percentage point.

ALSO READ: China's listed firms sustain recovery momentum as policy support builds up

HSBC’s Global Private Banking and Wealth remained neutral on the Chinese mainland’s A shares and Hong Kong equities, but said that it sees opportunities to profit from the technical rebound of the equity market.

“The Hang Seng Index and MSCI China Index are trading at a multiple of 9.4 and a multiple of 9.5 at a 12-month forward earnings, respectively, representing steep valuation discounts to the MSCI World’s multiple of 20, and the S&P 500’s multiple of 21.7,” said Fan Cheuk-wan, the bank’s Asia chief investment officer.

“We like quality mainland State-owned enterprises paying high dividends, blue chip internet leaders with solid earnings and big valuation discounts to their global peers. In Hong Kong, we favor undervalued high dividend stocks in the insurance, telecom, and utilities sectors and select oversold property developers with strong balance sheets,” Fan added.

READ MORE: China's non-financial ODI up 12.4% in first eight months

The investment officer warned that the sustainability of the tactical rally will depend on improvements in the activity data and earnings momentum following the policy announcement.

In its latest report, DBS (Hong Kong) said the HSI target will be to reach 20,300 in the next 12 months as the benchmark index still enjoys relatively attractive valuations and will benefit from the favorable liquidity environment amid US interest rate cuts. The bank upgraded its view of automobiles and insurance shares to “positive”, while its view of mainland banks is “neutral”.

ALSO READ: Chinese shares close higher Thursday

The report pointed out that, whether this rebound is a strategic rebound or a sustained rebound mainly depends on whether the announced measures will be effectively implemented, and the ability of the authorities to provide sufficient financial support to solve the problems of weak demand and low consumer confidence.