Hong Kong stocks returned to gains on Thursday as investors remained hopeful of talks and policy measures to bolster the economy amid the potentially damaging effects of tariffs by the US.

The Hang Seng Index surged 1.43%, or 294.53 points, to close the day at 20,891.62. The Hang Seng China Enterprises Index added 1.64%, or 124.08 points, to 7,690.35.

Investors are placing their bets on meaningful negotiations between the US and China to alleviate trade tensions and mitigate the risk of a potential trade war, an SCMP report said citing Kenny Ng Lai-yin, an Everbright Securities International strategist.

China is also expected to introduce policy measures to boost stocks in China and Hong Kong as a safety net against current and future US tariffs, according to Kenny.

To further relieve the pressure on Chinese stocks, the US Postal Service, or USPS, has reversed a policy to halt inbound parcels from China and Hong Kong.

The postal service had put the suspension in place Wednesday after the removal of the duty-free status of lower-value Chinese goods by the US government, subjecting them to tariffs, according to the SCMP report.

Technology giants including Alibaba Group (HKG:9988) and Tencent (HKG:0700) led gains in the Hong Kong market amid a flurry in China's AI sector following the success of Deepseek.

Alibaba and Xiaomi (HKG:1810) climbed over 1% and 2%, respectively, while Semiconductor Manufacturing International or SMIC (HKG:0981, SHA:688981) surged 7% to its highest level ever, contributing to the upward momentum of the market.