The Hang Seng Index and the Hang Seng Tech Index both saw their declines narrow to within 1.5%, according to a September 25 report.

The Hang Seng Index fell nearly 2% in morning trading, dropping close to 500 points, while the Tech Index was once down 2.64%.

Among the Tech Index constituent stocks, Lenovo Group Ltd (HKEX: 0992) bucked the trend and rose more than 2%.

Where to go from here

Huatai Securities believes that Hong Kong stocks may stabilize and rebound in the short term, but the timing and extent remain to be seen. The pattern of tightening overseas liquidity and lackluster domestic fundamentals has not been reversed. In terms of allocation, the brokerage suggests keeping dividend stocks as a bottom position and adding exposure to sectors such as petrochemicals and gas.

Zhongtai International expects Hong Kong stocks to remain range-bound in the short term, with the Hang Seng Index repeatedly consolidating between 24,500 and 25,000 points.