The Hong Kong stock market continued its rebound on Tuesday, showing resilience despite a sharp decline in the US stock market. Analysts say that the impact of the US’ “reciprocal tariffs” is waning.

The benchmark Hang Seng Index climbed 0.78 percent to 21,562 points. Compared with the 3,021-point drop on April 7 following the US announcement of tariff hikes, the index has regained more than half of the deficit.

The Hang Seng China Enterprise Index, the barometer of mainland-based company performances, edged up 0.68 percent to close at 7,951 points, while the Hang Seng Tech Index, the city’s technology stock gauge, increased 0.24 percent to 4,899 points.

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“Investors’ panic can lead to a plunge in the stock market, but the shock of the US’ ‘reciprocal tariffs’ on the Hong Kong stock market has basically passed,” Francis Kwok Sze-chi, vice-chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators, said.

“Now, everyone can calm down and make rational judgments. Thus, sharp declines in the Hong Kong stock market in the near future are unlikely to occur, but it will see a continued recovery,” Kwok said.

Contrary to stability in the H-share and A-share markets, the US market has fallen on four consecutive trading days. Some analysts said that indicates capital outflows from the US market and predict that a further rise will probably appear in Hong Kong stocks as they seek new value opportunities.

“It’s a good time for global investors to get into the Hong Kong stock market. Given the breakthroughs in our AI innovation, Hong Kong stocks will continue to outperform US stocks,” said Jeff Lam Chak-fai, a lecturer of the Treasury Markets Association and the School of Professional and Continuing Education at Hong Kong University.

Sam Lee, head of equity research of China Merchants Securities International, said that the HSI currently is trading at a price-to-earnings ratio of 9.7 times, which is below the 8-year average of 10.9 times, making it more attractive than the US and MSCI Emerging Markets average.

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However, he is concerned that market volatility will remain elevated. “Looking ahead, the Hong Kong stock market will continue to be influenced by the US markets, expectations surrounding the Federal Reserve’s interest rate policies, and RMB fluctuations,” he said.

“The US’ ‘reciprocal tariffs’ will cause great uncertainties in the global economic and financial performance in the foreseeable future,” Tom Chan Pak-lam, permanent honorary president and director of the Institute of Securities Dealers, said.

Even though measures to stabilize the market in the short term have been effective, “the real impacts will reflect soon,” Chan said.

Contact the writer at thor_wu@chinadailyhk.com