The Hang Seng Index rallied by 615 points or 3.0% on Thursday, closing at 21,252 after two consecutive days of selloff. The rebound came amid rising optimism following new highs in Wall Street’s S&P 500 and Dow Jones on Wednesday, as focus turned toward the start of the US earnings season. Investors were also encouraged by the People's Bank of China (PBoC) launching a new swap program aimed at supporting the struggling Chinese stock market.

Sentiment was further buoyed by expectations of new fiscal stimulus measures from the Beijing government, with top officials reaffirming their commitment to boosting economic growth. Investors are closely watching for the finance ministry press briefing scheduled for Saturday, which is expected to offer more details on potential stimulus efforts.

All sectors on the Hang Seng index posted strong gains, with financials, consumer stocks, and technology leading the charge. Some of the standout performers included Geely Auto, which surged 9.3%, followed by Trip.com with an 8.7% increase, BYD Electronic rising 6.8%, and China Hongqiao Group gaining 5.9%. These strong advances reflect renewed confidence in China’s economic outlook and recovery prospects.

Despite Thursday's significant rally, the Hang Seng index recorded a 6.5% drop for the week—its first weekly decline in four weeks. Several factors weighed heavily on the market, including the escalating tensions in the Middle East, ongoing trade friction between China and Western economies, and another month of declining retail sales in Hong Kong, marking the sixth consecutive month of contraction in this key sector. Retail sales for August fell sharply, highlighting persistent weakness in consumer demand within the region.

Looking ahead, investors will be closely monitoring Saturday’s announcements for clarity on the scope and scale of fiscal stimulus from Beijing. The potential measures could provide further support to the market and signal renewed commitment from China to stabilize and revitalize its economy amid the challenges posed by geopolitical tensions and slowing domestic growth.

Moreover, markets in Hong Kong will be closed on Friday due to a public holiday, giving investors a day to digest the developments from both global markets and China’s economic policy announcements.

For those interested in keeping up with the latest in financial markets, it's important to follow key economic policy updates and stock market movements, especially in the evolving landscape of China’s fiscal policy and global market shifts.

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As we move forward, keeping a close eye on the US earnings season, China's fiscal stimulus plans, and global geopolitical tensions will be key to navigating the dynamic market environment. With all sectors showing gains, the Hang Seng remains an essential barometer of investor sentiment and economic policy shifts, providing valuable insights into future market movements.