The Hang Seng surged 754 points, or 3.3%, to close at a more than three-year high of 23,788 on Wednesday, rebounding sharply from the previous session's decline. The rally came as investors reacted positively to Hong Kong's 2024-25 budget, in which Financial Secretary Paul Chan unveiled plans to curb public spending and raise revenue to narrow the fiscal deficit.

Meanwhile, payroll taxes and corporate profits taxes will be completely waived, with certain restrictions. Sentiment was further boosted by reports that Chinese lawmakers are reviewing a draft law introducing new safeguards against arbitrary fees, fines and forced donations. Gains were broad, led by a more than 4% surge in the technology sector amid renewed AI optimism.

Financials also rose after Morgan Stanley raised its price targets for major Chinese banks. Alibaba jumped 3.8% after announcing plans to release an AI model for video and image generation. Other companies that made big gains included Meituan (10.2%), Li Auto (9.0%), and Semicon Manufacturing (7.5%)

Source: Trading Economics