Hong Kong's Hang Seng Index (HSI) jumped past 26,000 during morning rally on Tuesday, hitting a nearly four-year intraday peak, before losing some points at the end of the day’s trading.

At closure of trading, the benchmark HSI climbed 1.19 percent to 25,938 points.

The Hang Seng China Enterprise Index, the barometer of mainland-based company performances, edged up 1.32 percent to close at 9242 points, while the Hang Seng Tech Index, the city’s technology stock gauge, increased 1.30 percent to 5829 points.

The HSI has maintained an uptrend since its lowest point of 19,828 on April 7, data shows.

Experts said the trend may continue in the near future.

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One of the main reasons believed to be behind the momentum is a possible rate cut by the US Federal Reserve due to the country’s weak employment data from August.

Francis Kwok Sze-chi, marketing director of Chief Securities, said as the Hong Kong Monetary Authority’s interest rate policy is linked to the Fed’s monetary policy, the upcoming US rate cut will probably result in a similar rate cut in Hong Kong.

This will benefit Hong Kong’s stock market, because the lower interest rate means less cost for companies’ financing activities, he said.

Coupled with the low valuations of HSI relative to other global stock indexes, Kwok said the city's stock market has potential for further growth.

In addition, the HKEX’s Severe Weather Trading arrangements have been in effect since 2024, allowing the securities and derivatives markets to continue operation according to the pre-determined trading calendar.

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Although the Hong Kong Observatory issued No. 8 typhoon signal on Monday, the impact of the typhoon on the trading market was minimal. Locals are quite familiar with those arrangements since they are in place for quite some time now, said Ivan Chu Siu-lun, chief adviser at the Hong Kong Sustainable Development Research Institute.

Some experts still advise investors to proceed with caution when investing.

Jeff Lam Chak-fai, a lecturer of the Treasury Markets Association and the School of Professional and Continuing Education at Hong Kong University, said, “Investors should be cautious before the US Federal Reserve’s meeting in September and avoid any hawkish tone despite a wild market predicted rate cut.”

Contact the writer at thor_wu@chinadailyhk.com