The Hong Kong equity market has cheered up, buoyed by the country’s pledge to introduce more proactive fiscal policies and the strengthening of the renminbi in the overseas foreign exchange market.

The city’s equity market index, the Hang Seng Index, soared 2.8 percent to close at 23,594 points in Wednesday’s trading, with a market turnover of HK$258.6 billion ($33.2 billion). The Hang Seng China Enterprises Index gained 3.1 percent to close at 8,630 points. The city’s technology stock gauge, Hang Seng TECH Index, soared 4 percent to close at 5,757 points.

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On Wednesday, Premier Li Qiang pledged that a more proactive fiscal policy will be implemented this year when he delivered the Government Work Report during the opening session of the National People’s Congress. The report mentioned the need to boost consumption, improve investment efficiency, and expand domestic demand in all directions, and said that the People's Bank of China will lower the reserve requirement ratio and interest rates in a timely manner to boost the economy.

Meanwhile, the renminbi strengthened against the US dollar when the Chinese mainland proposed countermeasures against the US' additional tariffs on mainland imports on Tuesday.  

Looking forward, market analysts remain bullish for mainland and Hong Kong stocks.

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“The emergence of DeepSeek has prompted the market to reassess the self-sufficiency capabilities of mainland technology companies, leading to a revaluation of Hong Kong and mainland stock markets,” said Michael Chan, managing director at GUM, a Hong Kong-based mandatory provident fund consulting firm.

A report from Dah Sing Bank’s economic research and investment strategy department said: “We maintain our positive view on the information and technology industry, expecting the industry to benefit from breakthrough developments in artificial intelligence models, boosting the prospects of cloud computing, data centers and other related industries.”

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The bank added that if the application of artificial intelligence further accelerates, the HSI is expected to rise to 25,000 points and the index is expected to have greater support at the 20,000 level.

Mutual fund manager Value Partners said: “Other sectors of the Hong Kong share market did not move much given the unexciting consumption spending during the Chinese New Year and the continued muted inflation. A further market rally requires upward earnings revision of the companies in addition to the re-rating of the technology shares.”