From the beginning of the week, when major financial regulatory agencies gathered and announced major stimulus policies, to the rare analysis of the economic situation during the September Political Bureau meeting on Thursday, signaling significant fiscal and monetary support, this series of actions has completely ignited optimistic sentiments at home and abroad, marking a historic turnaround for Chinese assets.

It is worth noting that, with positive factors both internally and externally resonating, Hong Kong stocks have shown greater resilience. As of the close,$Hang Seng TECH Index (800700.HK)$rose nearly 6% today,$Hang Seng Index (800000.HK)$up more than 3% above the 20,000-point mark. Today's trading volume exceeded 440 billion Hong Kong dollars, setting a historical record.

What's exciting is that the Hang Seng Tech Index surged more than 20% in just one week, while the Hang Seng Index rose by 13%. As of the close on Friday, the Hang Seng Index has accumulated a 21% increase year-to-date, surpassing$S&P 500 Index (.SPX.US)$The year-to-date cumulative increase of 20.45%, only slightly lower than the 21.18% increase in the Nasdaq.

The most popular components of the technology index led the gains, with a cumulative increase of over 34% in the past 5 days. $JD-SW (09618.HK)$Please use your Futubull account to access the feature.$BILIBILI-W (09626.HK)$ $JD HEALTH (06618.HK)$Please use your Futubull account to access the feature.$TRIP.COM-S (09961.HK)$Please use your Futubull account to access the feature.$XPENG-W (09868.HK)$Please use your Futubull account to access the feature.$KUAISHOU-W (01024.HK)$Please use your Futubull account to access the feature.$MEITUAN-W (03690.HK)$ All of them surged by over 20%. $BABA-W (09988.HK)$ Last week, the stock price surged nearly 18%, breaking through the 100 Hong Kong dollar mark.

In addition to the highly sought-after technology stocks in the market, all sectors of Hong Kong stocks rose significantly, with real estate, consumer, and brokerage-related stocks leading the gains. $LONGFOR GROUP (00960.HK)$ This week surged more than 56%,$CHINA VANKE (02202.HK)$up nearly 50% in brokerage stocks $CICC (03908.HK)$ Increased by more than 50%, $CITIC SEC (06030.HK)$Please use your Futubull account to access the feature.$CGS (06881.HK)$ All rose by more than 40%, $CSC (06066.HK)$ Increased by nearly 40% in the consumer sector $CTG DUTY-FREE (01880.HK)$Please use your Futubull account to access the feature.$CHINA RES BEER (00291.HK)$Please use your Futubull account to access the feature.$MENGNIU DAIRY (02319.HK)$ Surged more than 35%.

Fully ignited! Major banks are bullish, Wall Street tycoons: heavily betting on Chinese stocks, buying everything.

With a series of policies in place, from domestic brokerages to overseas institutions, they have all clearly expressed a bullish view on Chinese assets.

According to Rubner, Managing Director of Global Markets Division at Goldman Sachs, Goldman Sachs is beginning to see a fear of missing out on the rise in China, with market sentiment shifting and this may not be a contrarian trade this time.

Citic Sec stated that the rate cut by the Federal Reserve and a notable combination of domestic policies have significantly boosted market confidence, with the potential to attract foreign funds and local funds back to hkex; since August, the bottom features of the hkex market have become more prominent. After nearly two weeks of valuation repair, the current Hang Seng Composite Index (HSCI), Hang Seng Index (HSI), and Hang Seng Tech Index (HSTECH) valuations are still at historical lows.

Billionaire hedge fund founder David Tepper stated on Thursday that after the rate cut by the Federal Reserve, his next big bet is to buy all China-related stocks, suggesting a potential doubling of investment limits for China-related stocks.

Xing Cheng, manager of the Hang Seng-Qianhai Stock Connect Selected Mixed Fund, believes that the resilience of the Hong Kong stock market mainly stems from three reasons:

First, the Hong Kong stock market is more sensitive to improvements in overseas liquidity. The Federal Reserve unexpectedly cut rates, officially starting a rate cut cycle, with a 50 basis point reduction slightly exceeding market expectations. Since the Hong Kong dollar is pegged to the US dollar, the transmission of the US dollar entering a rate cut cycle to Hong Kong dollar assets is more direct. Hong Kong stocks are more sensitive to external liquidity, and the shift in US monetary policy may provide some support to the denominator end of Hong Kong stock market valuations.

Second, the Hong Kong stock market is the "first stop" for overseas funds to allocate Chinese assets. The change in policy expectations has increased foreign investors' risk appetite and investment willingness. Firstly, the various supportive policies recently introduced by the authorities have provided market support for liquidity in the capital markets, ensuring incremental funding safeguards and boosting confidence, which is the first step in breaking away from low transaction volume dilemmas. Secondly, the content of the Politburo meetings shows a change in the leadership's economic policy attitude. Two heavyweight meetings were held intensively at the end of September, with policies taking a more proactive stance towards the economy, providing direct support to market confidence and investor sentiment, among other direct support for valuations.

Third, long-term undervaluation boosts the rebound significantly. The bottom features of the Hong Kong stock market are evident, with the Hang Seng Index's valuation being persistently lower than its historical average over the past 10 years before the rebound. Compared to other major overseas stock indices, developed or emerging market stock index valuations have historically been mostly above 70%, while Hong Kong stock market valuations are at a low point. The relatively low valuation of Hong Kong stocks has been suppressed by rapid interest rate hikes overseas over the past three years and also reflects expectations for Hong Kong stock earnings. Currently, there are clear and significant marginal improvements in both liquidity and fundamentals, providing strong support for the valuation repair of Hong Kong stocks.

What other investment directions are worth paying attention to?

According to a report by a Chinese brokerage, multiple fund companies and several fund managers suggest that investors can focus on two major directions within the Hong Kong stock market:

On the one hand, focus on the opportunities in interest rate-sensitive industries in the growth track, such as internet, electric vehicles, technology hardware, and biomedical with longer durations.

On the other hand, pay attention to high-dividend targets with more predictable shareholder returns.

Kevin Fung, the manager of the Hong Kong Internet ETF, pointed out that although the domestic macro environment has been relatively weak this year, the performance of key companies in the Hong Kong Internet sector in the first two quarters has been particularly outstanding, with both the growth rate of net profit and the amount of buybacks surpassing most A-share/H-share industries. Looking ahead, several advantages may continue to bring better returns to the Hong Kong Internet sector:

1. Favorable regulatory environment: Policy risks and overcapacity have relatively limited impact on internet companies;

2. Industry competition is stabilizing, post-burn money internet companies have strong cash flow and sustainable shareholder returns;

3. Low individual stock valuations, improving ROE, and steady profit prospects;

4. Overseas investors are underweight, with the Hong Kong market at a global market valuation bottom.

Liao Yuzhou, manager of the Shenwan Lingxin Fund, also believes that the digital economy sector (technology, internet) in the Hong Kong stock market is particularly worth paying attention to. This sector has performed well in recent times, and in the future, with the acceleration of global digital transformation and continuous technological innovation, its future performance is promising. In particular, the internet sector, due to its central position in the digital economy and high sensitivity to new technologies, may become a key driving force for further development of the Hong Kong stock market.

Huaxia Fund stated that the rate cut by the Federal Reserve is positive for the fund availability of Hong Kong stocks, especially with the domestic low interest rate environment and the US rate cut benefiting the dividend strategy of Hong Kong stocks. The reform of state-owned enterprises in China is driving strong potential and willingness of central state-owned enterprises for dividends. With the current phase of correction, the dividend yield of Hong Kong H shares of state-owned enterprises will further increase, highlighting the increasing value of allocation.

Multiple sectors collectively lifted, which sectors performed the best in terms of gains?Click to view the Futubull heat map >>

Editor/Somer