The Hang Seng Index and the Hang Seng Tech Index quickly narrowed their losses from a steep decline. The Hang Seng Tech Index fell by more than 7% in the morning session.

FTSE China A50 futures index rose more than 1%.

Regarding individual stocks, many stocks turned from sharp declines to gains, with China Vanke's stock price rising from over 10% decline to turn positive. Meituan also surged upwards.

Chinese brokerage firms in Hong Kong stocks collectively strengthened in the afternoon, with Holly Futures up more than 23%, HTSC up nearly 18%, and China Merchants up more than 9%.

Analysts: The adjustment confirms the reversal logic.

Regarding the adjustment in Hong Kong stocks this morning, Zhang Yidong, Chief Global Strategy Analyst at Guosen Securities, stated that the stock market has entered a period of volatility, precisely confirming the reversal logic rather than a short-lived rebound. In October, Hong Kong and A-shares are expected to transition from the recent short squeeze rebound to a more sustainable oscillating reversal. In the medium term, one should abandon bearish thinking and firmly hold a bullish view. October's fluctuations are more about accumulating strength, picking the cream of the crop. Volatility is about identifying more sustainable and more reversal-oriented opportunities. The medium-term market space and time have no limits for now, as fund inflows continue unabated, just as predicted in May, with the climax of both domestic and foreign capital inflows appearing in the third quarter.

Meanwhile, Morgan Stanley stated that if the Chinese government announces more spending measures in the coming weeks, the Chinese stock market may further rise by 10% to 15%.

"Expectations of further increasing fiscal expansion have returned to the table, which has led investors to view China from the perspective of inflation for the first time in a long time." Morgan Stanley's Chief China Stocks Analyst, Laura Wang, expressed during an interview. "The last time investors viewed China through this lens was actually after the beginning of last year, when global investors gave a valuation of around 12 times the expected P/E ratio of the MSCI Chinese Index."

Editor/Somer