Hong Kong stocks rebounded from a two-month low after a report showed that profit declines for Chinese industrial companies slowed last month, allaying some concerns about the strength of the country’s economic recovery.

The Hang Seng Index rose 2.4 per cent to 19,621.1, while the Hang Seng Tech Index gained 3.8 per cent. On the mainland, the CSI 300 Index climbed 1.74 per cent and the Shanghai Composite Index added 1.5 per cent.

China Lit rose 12%, Chow Tai Fook jumped 6.7%, Meituan advanced 7.3%, Alibaba gained 2.4% and JD.com rose 5.4%.

Industrial profits at large Chinese companies dropped 10 per cent from a year earlier in October, compared with a 27 per cent decline for the previous month, the National Bureau of Statistics said on Wednesday. Profits fell 4.3 per cent in the first 10 months of the year, it said.

The report adds to evidence that the uneven recovery in China’s economy is persisting. October data showed a pickup in retail sales, though deflationary pressure persisted and the property market remains troubled. Investors are looking to an annual economic work conference next month that will lay out key economic policies for next year.

“We are relatively cautious about Hong Kong stocks in the near term,” said Zhang Sida, an analyst at Guoyuan Securities in Shenzhen. “Sentiment is weak because of China’s lower-than-expected fiscal stimulus and the tariff risk. We could see more volatility ahead. China’s fiscal policy and the strength of the economy are still the decisive factors in determining the market’s direction.”