Hong Kong stocks extended a three-week rally to hit a 32-month high, after Wall Street banks joined a chorus on buying Chinese stocks.

The Hang Seng Index jumped 1.34 per cent to 23,042.22, the highest since February 2022. The Tech Index rallied 2.84 per cent. Mainland markets resume trading on Tuesday after the “golden week” holiday.

E-commerce operator Alibaba Group Holding rose 1.58 per cent to HK$115.70, while rival JD.com added 1 per cent to HK$184.60. Macau casino operator Sands China jumped 7.8 per cent to HK$22.10 and peer Galaxy Entertainment advanced 9.3 per cent to HK$43.30. China’s top chip maker SMIC surged 18 per cent to HK$32.05.

Traders stepped up bets on Chinese equities after Citigroup and Goldman Sachs raised their targets for key stock benchmarks ahead of the mainland markets’ reopening.

“Put all in China for policy combo, the US rate cut and attractive valuations,” Pierre Lau, China equity strategist at Citigroup, said in a note on Monday. Beijing is likely to launch more economic stimulus than market expectations this year, and a 3 trillion yuan (US$427.5 billion) consumption support package could come soon, he added.

The bank has raised its target for Hang Seng Index by 21 per cent to 26,000 by mid-2025, and boosted the MSCI China Index target higher by 27 per cent to 84 during the same time frame.

Goldman Sachs upgraded Chinese stocks to overweight on “coordinated and forceful” policy announcements from Beijing, noting the moves will curtail downside growth risks.

Strategists including Timothy Moe over the weekend raised the 12-month targets for MSCI China Index and the CSI 300 Index to 80 and 4,600, respectively, implying a 15 to 18 per cent return.

Hong Kong’s benchmark Hang Seng Index has rallied more than 24 per cent since China unleashed its policy package on September 24, which has restored more than US$1 trillion in market value to the city’s stock market, according to Bloomberg data.

Sun Hung Kai Properties added 1.3 per cent to HK$90.95, leading gains among local developers, after strong demand for new home sales over the weekend amid strengthening sentiment.

Major Asian markets were mostly higher on Monday. Japan’s Nikkei 225 Index rallied 2.2 per cent, Australia’s S&P/ASX 200 Index added 0.5 per cent and South Korea’s Kospi gained 0.6 per cent.