A pedestrian walks outside the Hong Kong Stock Exchange on Monday. Photo: VCG

The Hong Kong stock market remained unperturbed on Tuesday despite the US government's announcement that it would eliminate Hong Kong's special status, a phenomenon experts said is underpinned by the strong business performance of mainland stocks such as Tencent. 

Hong Kong's benchmark Hang Seng Index opened 0.69 percent higher and surged above one percent shortly afterward. By the end of the closing time, the index stood at 24,427.19 points, up 0.52 percent. 

The Hang Seng Index's rise came after the US Commerce Department announced on Monday that it was suspending Hong Kong's preferential treatment, halting defense exports and restricting Hong Kong's access to high tech products over China's proposed national security legislation for the city. 

The Commerce Department also said that the US is evaluating further actions to eliminate Hong Kong's privileged status.

Hong Kong Special Administrative Region Chief Executive Carrie Lam Cheng Yuet-ngor said Hong Kong will not flinch from any US sanctions and will actively cooperate with the central government on any counterattacks if necessary, adding that the impact of the sanctions, though still under evaluation, would be slight.

Ade Chen, general manager of Guangzhou-based Fund Investment, said the US' sanctions against Hong Kong wouldn't have too much impact on the Hong Kong stock market as US moves have already been anticipated by market investors, reflected by a wave of share price plunges following the initial announcement of the security law in May. 

"After a year of volatility in 2019 and fluctuations earlier this year, remaining investors on the Hong Kong bourse are those who are firmly optimistic about the Hong Kong market or the prospects of the Chinese economy," Chen told the Global Times, adding that the Hong Kong stock market has been propped up by mainland tech giants listed in HK like Tencent.

In particular, Tencent's share price recently began a steady rising trend with an outstanding business performance in the first quarter. "As the earnings season approached, the market's optimistic prediction about Tencent's second-quarter performance also boosted the Hong Kong market in general," Chen said. 

Tencent had seen its share price rise by 2.59 percent to HK$498.60 on Tuesday.

Chen added that the Hong Kong market has long been half influenced by US markets and half by A-share markets, but with the return of mainland tech giants like Alibaba, it will be more consistent with the stock performances of US-listed companies that return to Hong Kong. 

Li Daxiao, chief economist at Shenzhen-based Yingda Securities, also noted that the hardest time has already passed for the Hong Kong stock market, which fell after the Wuhan city lockdown. 

"The inflows of mainland capital and overseas capital into Hong Kong along with the return of overseas-listed Chinese tech giants have resulted in sufficient liquidity on the Hong Kong bourse, supporting the Hong Kong market," Li said.  

He also pointed out that the Hong Kong market is propped up by the mainland economy, as the mainland is expected to be the only major market in the world to see positive growth this year under the coronavirus impact.