Hong Kong’s stock market extended the April rebound on the first trading day of May, outperforming major Asian markets as the US Federal Reserve’s decision to keep interest rates unchanged boosted market sentiment.

Extending a consecutive eight-day rally, the city’s benchmark Hang Seng Index (HSI) gained 2.5 percent to close at 18,207 on Thursday, with a market turnover of HK$115.9 billion ($14.85 billion). Hang Seng China Enterprise Index soared 2.6 percent while the Hang Seng TECH Index jumped 4.5 percent.

Driven by the US Federal Reserve’s expected decision to keep interest rates unchanged, major Chinese mainland and international financial shares extended their gains, with Hong Kong Exchanges and Clearing and Ping An Insurance (Group) Company of China soaring over 5 percent. Standard Chartered Bank expanded by 6 percent as the bank’s first-quarter basic pre-tax profit was much better than expected.

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Technology shares also benefited from the US Federal Reserve’s interest rate decision. Meituan skyrocketed 8.8 percent, JD.Com and Kuaishou Technology rose between 4.9 percent and 5.8 percent, Tencent Holdings and Alibaba Group Holding hiked between 2.4 percent and 3.8 percent. SenseTime continued the rally with a 36.1 percent surge.

Market analysts attribute the recent rebound of Hong Kong’s stock market to an improved risk-reward perception of the mainland economy and market by overseas capital, positive policy expectations, accelerated inflows of southbound funds, and anticipation of potential innovative monetary easing measures

Due to market sentiment rally driven by the State Council’s goal of establishing a high-quality capital market, and China Securities Regulatory Commission’s five measures to enhance the connect schemes and support Hong Kong’s strengthening of its international financial center status, the HSI, HSCEI and Hang Seng TECH Index rebounded 7.4 percent, 8 percent and 6.4 percent in April, respectively.

Market analysts attribute the recent rebound of Hong Kong’s stock market to an improved risk-reward perception of the mainland economy and market by overseas capital, positive policy expectations, accelerated inflows of southbound funds, and anticipation of potential innovative monetary easing measures.

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CCB International expects that if the HSI stabilizes at the 18,000 level, it will be the threshold for a bear-to-bull market transition.

“Current valuations across sectors remain very low. The price-to-book ratio of the HSI was still below 1 while dividend yield was at a relatively historical high level of 4.1 percent. We suggest investors can consider a barbell strategy with a gradual shift to growth stocks,” CCBI analysts Cliff Zhao and Wilson Zou noted.

Ivan Cheung, the head of China CITIC Bank International’s personal and banking business, attributed the recent Hong Kong stock market outperformance to attractive valuations, the improvement in China’s macroeconomic conditions and policy support for the financial market

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Cheung said he expected that if the US Federal Reserve maintains high interest rates for a period of time, leading to a continued high-interest environment, domestic and overseas capital will be lured to chase high-yield stocks in Europe, America, and Asia.

“Given the solid fundamental and low market valuation, with Hang Seng Composite Index trading at a forward price-to-earnings ratio of 9.2, the turnaround of the Hong Kong market sentiment might be followed by the re-rating this year,” Hang Seng Indexes Company said in its Tuesday blog.